The Center for Severe Weather Research (CSWR), Boulder, Colo., has reached a settlement agreement with the U.S. Department of Justice (DoJ) in a federal grants dispute. The DoJ was acting on behalf of the National Aeronautics and Space Administration (NASA), the National Oceanic and Atmospheric Administration (NOAA) and the National Science Foundation (NSF).
The agreement stemmed from a dispute regarding what the government termed inappropriate requests for federal grant money and inadequate documentation, accounting and controls between Jan. 1, 2014 and June 30, 2020. The DoJ further claimed CSWR President Joshua Wurman and his wife, CSWR Contract Manager Ling Chan, received monthly rent from CSWR in excess of what is allowed by federal regulations.
The DoJ also contended the CSWR drew down funds it did not need, as evidenced by the CSWR investing in a $3 million certificate of deposit, and that, in addition to the excessive rent payments, the funds were used for at least one personal expense that was not reimbursed.
CSWR has agreed to repay more than $2.4 million, and has already repaid $706,905. The Wurmans themselves agreed to repay $203,766, according to the settlement agreement.
In signing the settlement agreement, CSWR and the Wurmans did not admit any liability, and the United States did not concede that its claims were not well founded. As part of the settlement, once all repayments have been made, the Wurmans will be released from civil or administrative monetary claims made by the United States.
“Each year the National Science Foundation awards millions of dollars in grants to promote promising scientific research,” NSF Inspector General Allison Lerner said via a statement. “However, the foundation expects grant recipients to follow federal cost principles. Expenses charged to grants must be allowable, allocable, and reasonable. I commend the U.S. Attorney’s Office and our investigative partners for their work on upholding federal grant rules in this case.”
Joshua Wurman maintains there was no malice or intentional deception in their actions. “CSWR, a very small research organization, with only a small accounting infrastructure, followed what it believed to be proper billing and accounting processes since its inception, processes that had been repeatedly reviewed and accepted by NSF, and independently audited annually,” Wurman wrote in an email to The NonProfit Times.
“After concerns were raised in 2019 by NSF concerning some aspects of CSWR’s accounting, CSWR identified unspent funds that should be returned to the government,” Wurman continued. “CSWR never spent these funds. Rather than accept repayment, NSF referred the case to DOJ for additional investigation. CSWR actively, fully and transparently cooperated with NSF and DOJ. CSWR very willingly paid back to the government what both CSWR and DOJ agreed was owed. Rent had openly been charged for years at fair-market rates and never questioned by NSF. DOJ requested calculation using a well below-market methodology, to which CSWR agreed.
“Critically, after a long and extensive investigation, no intentional wrongdoing was found, no fraud was found, and no fines were levied.”
A Form 990-EZ on file with GuideStar by Candid for the year ending Dec. 31, 2018 shows the organization (under the name Center for High Impact Weather Studies) receiving $34,312 in contributions, gifts and grants as part of total income of $34,334. Its end-year expenses were $18,791, and its net assets were $69,349.
Asked for a more recent financial statement, Wurman wrote “CSWR is basically dormant now, with no incoming NSF funds since early 2019. CSWR laid off all its employees long ago and I’ve just been here dealing with the government investigation. CSWR has basically been killed during this process and has no active accounting department. As a result, I have no ability to provide you with a more recent 990. The 2018 form reflects our last healthy, fully-active, year.”