If you’re a government grantee or contractor, you need to be familiar with the False Claims Act, an important weapon in the government’s arsenal when it comes to battling fraud, waste and abuse in federal awards.
Basically, the FCA states that it’s illegal to knowingly make, use or cause false claim in order to get payment from the government.
The FCA was enacted in 1863 under President Lincoln to combat fraud by Civil War contractors.
Over the years, Congress has amended the FCA on three occasions, broadening its reach each time, with the most significant changes happening in 1986 and 2009.
In December 2018, the Civil Division of the US Department of Justice (DOJ) announced its fiscal 2018 False Claims Act (FCA) statistics. Here are the highlights:
Private citizens can bring qui tam, or whistleblower, actions based on FCA violations. This essentially turns individuals into “private attorney generals.” These actions are not a mere report or alert to the government, it’s a bona fide lawsuit filed with an attorney.
Any persons or entities with evidence of fraud against federal programs or contracts may file a qui tam lawsuit. The following actions are considered violations under the FCAs:
Whistleblowers are provided with a financial reward if the suit is successful. The reward to the whistleblower is normally between 15% and 25%, but sometimes 30% of the amount recovered.
Defense Contractor Fraud
The federal government spends hundreds of billions of dollars each year in defense of the United States. Here are some examples of ways defense contractors may commit FCA violations:
Research Grant Fraud
Every year, the federal government funds millions of dollars in research in a broad range of fields, from clinical medicine to education to healthcare to nutrition and fitness. Research fraud includes using funds for inappropriate purposes such as:
Cases under the FCAs can result in prolonged, complex and expensive litigation. They almost always come with press coverage, which can be highly-damaging to a contractor’s or grantee’s reputation and future funding abilities.
We’ve been working in government award accounting for over 30 years; it’s our expertise, our focus, and all we do.
Too frequently we see contractors and grantees unintentionally commit fraud due to financial stress caused from:
This is why it’s so imperative that you stay compliant. That means knowing and following the rules and regulations, including having a FAR-compliant accounting system and implementing and enforce internal processes.
As a grantee or contractor, you must understand that the government takes this very seriously and that huge monetary audit findings can be very appealing to disgruntled employees.
If you want to talk to one of our experts about your award, practices like your time sheets, or any other concern, please contact Ryan at email@example.com or 781.862.5170 ext. 2106
To read the full DOJ Fraud Statistics for 2018 report, go here:
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