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The National Institutes of Health systematically failed to track how foreign grant recipients spent their money, according to a new report from an internal government watchdog.
The review by the Health and Human Services Department inspector general found the overwhelming majority of required audit reports for foreign recipients it surveyed were never obtained during fiscal years 2019 and 2020.
Moreover, when the agency did get reports that needed follow-up monitoring, NIH officials failed to follow up 70% of the time.
The NIH’s failures meant it could not monitor or oversee how federal funds were used, according to the inspector general, raising the prospect that foreign researchers could misuse funds to benefit themselves and others without U.S. officials’ knowledge.
“NIH did not ensure that NIH foreign grant recipients completed and submitted required annual audit reports,” the inspector general said in a report this month. “NIH did not receive 81 of the 109 annual audit reports for foreign grant recipients that met the requirements for an audit and for which NIH provided the majority of HHS funding.”
The NIH’s funding protocols came under intense partisan scrutiny over a series of grants eventually totaling $8 million to a U.S.-based health organization between 2014 and 2021. Some of that grant money was passed to China’s Wuhan Institute of Virology, the lab whose controversial research has led some to speculate it may have played a role in the accidental release of the COVID-19 coronavirus. A previous NIH audit found the American nonprofit had misreported $90,000 in expenses, among the problems with the grant.
“NIH did not effectively monitor or take timely action to address” compliance problems involving EcoHealth Alliance, the New York City-based nonprofit that held the NIH grant, the HHS inspector general’s office said early this year after an 18-month investigation.
The agency subsequently suspended the EcoHealth Alliance grant and permanently blocked the Wuhan Institute from U.S. government grant money.
According to the most recent audit, foreign researchers have received millions of dollars in grants and other funding from NIH. For example, in 2022, the agency approved 224 foreign grant recipients totaling $257 million.
To determine if NIH officials knew how foreign researchers spend that cash, the inspector general said it gathered a list of 90 NIH grant recipients from 2019 and 2020 who spent more than $750,000.
Auditors found that those 90 foreign recipients should have submitted 109 audit reports, which are collected by the HHS Audit Resolution Division. The division took responsibility for gathering the reports in October 2018 but did not collect such reports until October 2020, according to the inspector general report.
Of those 109 required reports, 81 were not received. Ten reports the agency obtained required follow-up actions that NIH officials failed to complete in seven of those cases.
The foreign researchers’ delinquency may be attributable to NIH officials not asking the foreign researchers what they were doing with the funds, according to the inspector general. NIH also accepted some delays in grant recipients’ reports because of the COVID-19 pandemic.
“NIH grants management officials did not provide evidence that they actively reached out to foreign grant recipients to obtain required audit reports for our audit period,” the report said. “Instead, NIH relied on foreign grant recipients to submit audit reports directly to ARD.”
As a result, the inspector general said the NIH needs to ensure the completion of the outstanding 81 audit reports and must push its audit resolution division to identify who needs to submit reports.
The report said teams of researchers receiving taxpayers cash with delinquent reports hail from Australia, Botswana, Canada, Ethiopia, Finland, France, Ghana, Mali, Netherlands, Nigeria, South Africa, Sweden, Tanzania, Thailand, Uganda, U.K. and Zimbabwe.
NIH told the inspector general it agreed with its recommendations and said it had increased the number of auditors working to learn whether the 81 delinquent reports were completed. The NIH, which did not immediately respond to The Washington Times’ request for comment, told the inspector general it would accomplish the recommended actions by September 2024.
The inspector general’s new December report on the NIH’s auditing failures is not the first warning that government officials are unaware of how researchers use federal funds.
For example, the inspector general found in 2022 that most grant recipients it surveyed failed to comply with federal requirements for disclosures of foreign financial support. The lack of disclosure presented risks that federally funded researchers’ work was vulnerable to theft by China and other adversaries.
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