Fraud and waste found in small business grants awarded by NASA

Introduction

Over a four year period, NASA awarded grants worth $112 million in an attempt to engage small businesses doing innovative research. A review by the agency’s inspector general has identified several cases of fraud and questionable costs.

The IG questioned an estimated $2.7 million in 2008 grants, about 25 percent of the amount awarded that year. Questionable costs included unauthorized travel and equipment expenses.

NASA officials lacked adequate control and procedures to ensure applicants’ past performance had been considered, or to prevent fraud and abuse in contract awards.

The review found instances where firms received duplicate awards from different agencies for the same research. There were also contractors who falsified their eligibility for the program—falsely claiming they were American-owned companies or giving nonexistent addresses for their business.

The inspector general blamed the wastefulness on the lack of due diligence by the NASA employees awarding contracts and estimated that the agency could put $13.3 million to better use in the upcoming years if proper controls are implemented.

“Unless NASA adopts additional internal controls, the NASA Small Business Innovative Research Program will remain vulnerable to fraud and abuse,” the report said.

FAST FACT: A sample audit found 31 firms received a total of 98 contracts worth about $26.8 million for what appeared to be same or similar research on lithium batteries.

Following are other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities.

NATIONAL SECURITY

• As the cost of DNA mapping falls significantly, possibly reaching $100 to sequence an individual’s genome by 2013, the Pentagon is showing interest in tracking gene types of individuals who have a tendency towards high performance on the battlefield and superb health. Genetic markers could help build a stronger military force, but the process opens itself to ethical and privacy concerns. (JASON Defense Science Advisory Panel)

ENVIRONMENT

• Implementing “smart grid” technologies, the high-tech utility networks that use digital technology to improve efficiency and save energy, could open the electricity grid to cyber-attacks and the loss of service if not implemented securely. Electric companies involved in the process are including additional cyber-security requirements in their development of the technology. (GAO)