Friday, September 23, 2011

Avecia Mandated To Return $31 Million To U.S. Treasury

The contract was to develop a massive Anthrax vaccine. The contract was with a company out of the United Kingdom.

NIAID funded the Contract in compliance with the purpose requirements of appropriations statutes. However, NIAID did not comply with the time and amount requirements specified in the statutes. NIAID funded only $40.0 million of the $71.3 million initial Contract obligation with fiscal year 2003 appropriations. NIAID obligated a total of $31.3 million in violation of the bona fide needs rule: $26.0 million of fiscal year 2004 appropriated funds and $5.3 million of fiscal year 2005 appropriated funds. Because the Contract was for nonseverable services, NIAID was required to record the full amount of the Contract using fiscal year 2003 appropriated funds. By not doing so, NIAID potentially violated the Antideficiency Act.

To remedy the bona fide needs rule violation, NIAID will need to deobligate the fiscal years 2004 and 2005 appropriations. To remedy the potential Antideficiency Act violation, NIAID would have needed to record an obligation of $31.3 million ($71.3 million less $40.0 million) using fiscal year 2003 appropriations. However, because fiscal year 2003 funds are no longer available to record the obligation, NIAID may be able to fund the deficiency by using $31.3 million of current fiscal year appropriations provided the conditions of 31 U.S.C §§ 1553 and 1554 are met. If NIAID does not have $31.3 million of current fiscal year appropriations or the amount exceeds the lesser of 1 percent of the current appropriation or the unexpended balance of the closed appropriation, NIAID will violate the Antideficiency Act.

NIAID correctly funded the two modifications for additional work with $8.4 million of fiscal year 2006 appropriated funds and $38.0 million of fiscal year 2007 appropriated funds. In April 2009, NIAID transferred the remaining Contract balance totaling $32.5 million of fiscal year 2007 funds to BARDA, and BARDA correctly obligated those funds to the Contract.

RECOMMENDATIONS

We recommend that NIAID:

• deobligate $26.0 million of fiscal year 2004 appropriations and return the canceled funds to the Treasury;

• deobligate $5.3 million of fiscal year 2005 appropriations and return the canceled funds to the Treasury;

• record the remaining $31.3 million of the $71.3 million Contract obligation against current fiscal year appropriations;

• report an Antideficiency Act violation if sufficient current year appropriations are not available; and

• report, in accordance with 31 U.S.C. § 1554, the adjustment to the Contract using current fiscal year appropriations.

Appropriations Funding for National Institute of Allergy and Infectious Diseases Contract N01-AI-3-0052 Wit...

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Friday, September 23, 2011

Avecia Mandated To Return $31 Million To U.S. Treasury

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