WHATIS

FRAUD?

Fraud is deception seeking to unlawfully deprive NASA of something of value or secure from NASA a
benefit or consideration for which there Is no entitlement. Intent is not required for some fraud types. |

HOW CAN I IDENTIFY POTENTIAL FRAUD? Here are a few examples:

COST/LABOR MISCHARGING EXAMPLE:

The improper allocation of cost contracts, charging

direct costs to indirect accounts or vice versa. This

of unallowable costs directly or indirectly, charging of

usually results in Government being overcharged,

Transfers of costs from fixed price to cost contract

“Ghost employees” (employees that do not really exist)
Billing for unincurred costs or unreceived deliverables

Using material on commercial contract but charging to NASA
Materials charged in excess of contract requirements

Slow progress despite high billing and contract requirements
Double-counting material costs as both direct & indirect
Employees lack contract-specified education or experience

PAOAPORKOZS

Research Firm pays $2.4 Million to Settle False Claims Allegations
In October 2024, a research firm agreed to pay $2,409,647
tosettle allegations that itimproperly requested drawdowns
from NSF/NOAA grants & NASA contracts for expenses not
incurred & improperly retained interest accrued on federal
funds. It had inadequate internal controls, documentation &
accounting procedures in place, & was unable to link
drawdowns to specific award expenses.

PRODUCT SUBSTITUTION EXAMPLE:

Deliveries of goods and services that do not confor

m to minimum mandatory contract specifications.

¢ Non-conforming parts

© Missing or altered labels

¢ Counterfeit parts

Questionable testing claims or falsified test certificates
¢ Substitution of generic for brand name parts

¢ Substitution of foreign for domestic parts

¢ Unavailable supply chain part traceability documentation
¢ Limited access to facility

RAORPOROZ =

Contractor QA Employee Falsified Certs for Space Vehicle Parts
InJune 2020, a contractor Quality Assurance (QA) official was
convicted of Fraud Involving Space Vehicle Parts. He
prepared falsified source inspection reports & certifications
using forged names/stamps falsely certifying parts had met
Quality control standards & undergone NDT testing. He was
‘suspended based on a criminal complaint & debarred after
conviction by NASA Suspending & Debarring Official (SDO).

PROCUREMENT INTEG

RITY ISSUE EXAMPLES:

Improper activities by government or contractor personnel while engaging in the procurement process,

¢ Personal conflicts of interest: 18 U.S.C. § 208 prohibits
Government employees from engaging in official duties that
could affect personal financial interests (family & business)
Sudden and unexplained increase in wealth of an employee
Employee improperly acting beyond the scope of their duties
Inexplicable favorable treatment of a contractor or grantee
High value procurements not competitively bid or negotiated
Repeated "sole source" awards without documentation

RAOGPOROZ

Former Senior Center Official Convicted on Personal Conflict of Interest
In February 2049, a former NASA official was convicted for
Violating 18 USC 208 & was debarred by the NASA SDO.
The former official attempted to use an Intergovernmental
Personnel Act (IPA) agreement to secure post-NASA
employment for himself at a local college, He used the IPA
to entice the college to provide him with a permanent
position.

NASA ACQUISITION INTEGRITY PROGRAM (AIP)
Established by NASA Policy Directive 2086.1, AIP provides specialized guidance
and advice regarding suspected fraud and related irregularities in the acquisition
process, suspected criminal standards of conduct violations, and suspension and
debarment related actions, AIP ensures that significant allegations of fraud on
NASA programs and procurements/grants/cooperative agreements/funding
instruments and activities are identified, investigated & prosecuted. AIP responds
to Congressional inquiries and proposed Federal Acquisition Regulation rules
conceming fraud related issues. For more information, visit:

HOW TO REPORT FRAUD:
NASA Policy Directive 9800.18 requires NASA employees who observe crime, fraud,
waste, abuse, or mismanagement to report the observation or suspicion to the OIG,
NASA employees, contractors, grantees, programs, partners, and NASA funds
tecipients are expected to cooperate fully with the OIG and its designees, To report
Suspected Violations, contact your local OIG office or the Hotline,

Seem NASA OFFICE OF INSPECTOR GENERAL
(=) 1-800-424-9183 / TDD: 1-800-535-8134

httos:/www.nasa,govioffices/ogc/acquisition integrity

Seige” _littpsi//olg. nasa.gov

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( CYBERSECURITY FRAUD IS A GROWING PROBLEM! REPORT POTENTIAL CYBER- RELATED FRAUD, WA WASTE & ABUSE TO NASA OIG }