Columbia University to pay $9.5 million in U.S. civil fraud case

By Nate Raymond

NEW YORK (Reuters) – Columbia University will pay $9.5 million to resolve claims by the U.S. government that it improperly sought excessive cost recovery in connection with federal research grants, authorities announced on Thursday.

The settlement, announced by U.S. Attorney for Manhattan Preet Bharara, came after the U.S. government intervened in a civil fraud lawsuit filed under seal in 2013 by a purported whistleblower against Columbia.

According to the government’s lawsuit, from 2003 to 2015, Columbia impermissibly sought recoveries for 423 National Institutes of Health research grants by applying an “on-campus” indirect cost rate, rather than a much lower “off-campus” rate.

Columbia did so even though the research was primarily performed at off-campus facilities owned and operated by New York state and New York City, which the university failed to disclose were not its own.

“All institutions that receive federal grant money must abide by applicable rules and regulations governing the use of the funds and the extent to which costs incurred by the institution are reimbursable,” Bharara said.

As part of the settlement, Columbia will pay $9.5 million and agreed to admit that it engaged in various conduct at issue in the case, Bharara’s office said.

Columbia in a statement said it believed in good faith that applying the “on-campus” rate had been appropriate, but that the government had disagreed with its approach.

“We are pleased to put this dispute behind us and resolve the matter,” the university said. “Columbia looks forward to continuing to work cooperatively with its valued research partners in government.”

The case is U.S. v. The Trustees of Columbia University in the City of New York, U.S. District Court, Southern District of New York, No. 13-5028.

(Reporting by Nate Raymond in New York, additional reporting by Jon Stempel; editing by G Crosse and Diane Craft)