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SMEs pull wool over NASA's eyes

Fraud by SMEs continues to rob NASA of funds 17 years after such scams were first uncovered, according to its Office of Inspector General (OIG) in Washington...

Fraud by SMEs continues to rob NASA of funds 17 years after such scams were first uncovered, according to its Office of Inspector General (OIG) in Washington DC.

In a letter to NASA on 13 August, acting assistant inspector general Debra Pettitt outlined the ways in which firms awarded grants by the space agency under the Small Business Innovation Research scheme had hoodwinked NASA.

About 2.5% of the budgets of 14 of the US's major government departments - such as defence and agriculture - are set aside to fund research under the SBIR scheme. Because many departments offer such funds, some fraudsters have been receiving awards from multiple agencies for essentially the same work, says Pettitt.

Fraudsters have been receiving awards from multiple agencies for the same work

Some wrote grant applications slightly differently - yet delivered the same technology to multiple departments. Other firms boasted of employing high-profile principal investigators who turned out not to work for them at all. Such abuses were first uncovered by the OIG in 1992.

Since 2001, it has found 8 cases of such fraud, and some companies have been fined millions of dollars. "We don't know the full extent of this right now so we are initiating a new audit," says Raymond Tolomeo, research director at the OIG. "Then we'll be able to see if NASA's internal processes are working."

This was first published in August 2009

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