GTRI employees fired/resign over fraud scandal

Photo by John Nakano

After an investigation of illicit and improper purchases made by the Advanced Concept Laboratory (ACL), Tech has taken corrective action including firing several employees and moving the ACL director to a non-management position. Three additional employees suspected of colluding with the fraud resigned during the investigation.

According to the investigation, between 2008 and 2013, approximately $475,000 in unallowable purchases and salary costs were made at ACL. This included personal purchases, mostly for electronic products, purchases that could benefit researchers’ outside activities, purchases from vendors with whom vendors had a non-professional relationship and purchases that were not related to the project that was charged.

“The rules for allowable and unallowable purchasing are complex, and misunderstandings can occur as a result,” Steve Cross, Executive Vice President for Research said in a press release. “In this case, we had individuals who are suspected of defrauding Georgia Tech and its sponsors. Our system of financial controls and accountability identified the irregularities, and we have engaged in an aggressive and proactive approach to improve processes related to how we manage sponsored work.”

An outside consultant was brought in to investigate the malfeasance. Among the findings were that a “tone” within ACL was partially responsible and that “employees charged with overseeing and enforcing these policies did not consistently feel “supported” when raising issues.”

According to the report, among the many violations committed by the ACL employees was claiming that a project was classified in order to order items against  th policy.

“Many of the ACL staff interviewed claimed that researchers and students were often told to make purchases or perform work without knowledge of the project to be charged because ‘they did not need to know because it is t]\classified,’” the report stated.

“Whenever these kinds of charges are alleged, it is something to be taken very seriously,” Cross said. “We have appointed new leadership for ACL, individuals known both for their research expertise and personal integrity. We have been in close communication with the affected sponsors regarding our investigation and course of action, and they have expressed appreciation for our transparency and thoroughness.”

Among the changes was a reduction in the spending limit on procurement cards, or PCards, that were at the center of the violations.

GTRI will also increase the use of the SciQuest, e-procurement system that allows purchases to be reviewed before being approved.

“In keeping with the goals of Georgia Tech’s strategic plan, our intent is to continuously streamline and improve business practices,” Cross said in the statement. “The lessons learned from the improvements under way at GTRI will serve as a template for the entire Institute.”

It is now up to law enforcement to determine if any criminal charges will be filled against the former GTRI employees.