Harsh Criticism for the Mayo Foundation's Accounting Practices | AccountingWEB

Harsh Criticism for the Mayo Foundation's Accounting Practices

Court documents pertaining to a suit brought against the Mayo Foundation by a former accounting employee under the False Claims Act and settled in May for $6.5 million, were released Monday to the Rochester, Minnesota, Post-Bulletin, according to the Associated Press. The documents had been under seal until the Post-Bulletin challenged the settlement order, according to the Associated Press.

These documents show that federal investigators alleged that the Mayo Clinic had serious problems accounting for research grants, according to the Associated Press. “The audit team from the Department of Health and Human Services and the National Institutes of Health, whose job it is to routinely audit grants, has never seen an accounting system with such basic failures. Nor have they ever previously confronted an institution incapable of being audited in this way,” the Associated Press quotes from one document, signed by Assistant U.S. Attorney Robyn Millenacker.

The court documents contain multiple allegations by federal investigators about Mayo’s accounting practices, its response to government inquiries, and the mishandling of government research grants. Mayo spokesman Chris Gade told the Associated Press the government failed to put together a case.

“I think we would disagree with most of what was in these documents”, he said.

The Mayo Clinic changed research accounting procedures as a result of the investigation, but Gade maintained that Mayo did nothing illegal or unethical, according to the Associated Press. The settlement was reached to avoid a potentially long legal battle.

In the documents, federal investigators questioned whether the Mayo Clinic applied money from one research project to another. The documents allege Mayo “defrauded the United States by misapplying certain grant funds from the National Institutes of Health and its parent agency, The United States Department of Health and Human Services.” Investigators said that Mayo could not explain how funds moved from one grant to another.

The Associated Press reports several government agencies have received money from the $6.5 million settlement. Whistle-blower Christine Long, a former Mayo accounting employee, received the federally mandated 20 percent: $1.3 million.

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