Not-for-profit organization responds to fund misappropriation with forensic analysis

Our client’s need

A staff member at a not-for-profit organization was suspected of fraudulently spending Federal and private funding for personal gain.

Baker Tilly solution

Baker Tilly performed an in-depth review of grants held by staff member in question. We assessed the allowability, allocability, and reasonableness of expenditures per Federal and agency regulations and organization policy, and determined to what extent inappropriate purchases were made for personal use. Our review encompassed the areas of payroll, laboratory supplies, human subject payments, travel, and equipment. Additionally, we worked with the organization’s Institutional Review Board (IRB) to understand and assess the researcher’s compliance with IRB procedures, and with the approved IRB protocols for each grant. During this review we identified several grants without proper IRB approval, as well as projects that had continued despite having IRB approval suspended.

Results achieved

Organization management received an objective analysis of the amount of funding that had been misappropriated along with an understanding of key risks and necessary enhancements going forward, both for the individual staff member and the organization as a whole. Our team also worked with external counsel and management to calculate the institution’s exposure, determine the necessity of self-reporting to funding agencies, and assess the feasibility of civil and/or criminal litigation.