Fraud, Waste and Abuse

The HHS Grants Policy Statement identifies fraud, waste and abuse of grants funds that includes embezzlement, misuse or misappropriation of property, and false statements by organizations or individuals. Grantees will find this information helpful in preventing financial abuses in their programs.

 

The following is an excerpt from HHS Grants Policy Statement.


Anyone who becomes aware of the existence (or apparent existence) of fraud, waste, or abuse related to HHS grants or use of grant funds should report this information to HHS. The HHS OIG provides several means, including toll-free numbers, for this purpose. The OIG hotline may be reached by telephone at 1-800-HHS-TIPS (1-800-447-8477) or TTY at 1-800-377-4950; by fax at 1-800-223-8164; by e-mail at HHSTips@oig.hhs.gov; or by mail at Office of the Inspector General, Department of Health and Human Services, Attn: HOTLINE, 330 Independence Avenue, SW, Washington, DC 20201.

Fraud, waste, and abuse includes, but is not limited to, embezzlement, misuse, or misappropriation of grant funds or property, and false statements, whether by organizations or individuals. Examples are theft of grant funds for personal use; using funds for non-grant-related purposes; theft of federally owned property or property acquired or leased under a grant; charging inflated building rental fees for a building owned by the recipient; submitting false financial reports; and submitting false financial data in bids submitted to the recipient (for eventual payment under the grant).

Callers are not required to give their names and, if they do, their identities are kept confidential. Contact information for the OIG and the OIG hotline also is included in Part III of this policy statement. In addition, some OPDIVs have a designated point of contact within the OPDIV for receiving information from third parties about administrative or programmatic concerns relating to an application or award. These contacts may be found in Part IV or on the OPDIV's Web site.

The Federal government may pursue administrative, civil, or criminal action under a variety of statutes that relate to fraud and false statements or claims. Even if a grant is not awarded, the applicant may be subject to penalties if the information contained in or submitted as part of an application, including its certifications and assurances, is found to be false, fictitious, or fraudulent.

The Program Fraud and Civil Remedies Act of 1986, 31 U.S.C. 3801, provides for the imposition by HHS of civil penalties and assessments against people who knowingly make false, fictitious, or misleading claims to the Federal government for money, including money representing grants, loans, or benefits. A civil penalty of not more than $5,000 may be assessed for each such claim. If a grant is awarded and payment is made on a false or fraudulent claim, an assessment of not more than twice the amount of the claim, up to $150,000, may be made in lieu of damages. Regulations at 45 CFR part 79 specify the process for imposing civil penalties and assessments, including hearing and appeal rights.

The Criminal False Claims Act, 18 U.S.C. 287 and 1001, provides for criminal prosecution of a person who knowingly makes or presents any false, fictitious, or fraudulent statements, representations, or claims against the United States. Violations carry a maximum sentence of 5 years imprisonment (or 8 years for offenses involving international or domestic terrorism) and/or a fine.

The Civil False Claims Act, 31 U.S.C. 3729(a), provides for imposition of penalties and damages by the United States, through civil litigation, against any person who knowingly makes a false or fraudulent claim for payment, makes or uses a false record or false statement to get a false claim paid or approved, or conspires to defraud the Federal government to get a false claim paid. A "false claim" is any request or demand for money or property made to the United States or to a contractor, grantee, or other recipient, if the Federal government provides or will reimburse any portion of the funds claimed. Civil penalties of $5,500 to $11,000 may be imposed for each false claim, plus damages of up to three times the amount of the false claim.

Part II of this policy statement addresses the administrative remedies included in 45 CFR parts 74 and 92 that the Federal government may use after award if a recipient deliberately withholds information, submits fraudulent information, or does not comply with applicable requirements. These remedies include recovery of misspent grant funds.

Fraud, Waste and Abuse. HHS Grants Policy Statement. HHS/ACF/OHS. 2007. English.

Last Reviewed: September 2008

Last Updated: November 13, 2014