Big Brothers agrees to settle case for $1.6M

Posted by Press Release on January 21, 2016

Big Brothers Big Sisters of America Corporation has agreed to pay $1.6 million to resolve allegations of false claims for funds under Department of Justice grants awarded to help children at risk, U.S. Attorney Zane David Memeger announced in a press release.

Big Brothers is a nonprofit that provides mentoring services to boys and girls throughout the country through approximately 300 independent affiliate agencies. Originally based in Philadelphia, it is headquartered in Tampa, Fla.

Since 2004, Big Brothers has received millions of dollars in grants from the Justice Department to support initiatives for at-risk children. As a condition of those grants, Big Brothers was required to maintain sound accounting and financial management systems in accordance with federal regulations and guidelines designed to ensure that grant funds would be properly accounted for and used only for appropriate purposes, the release said.

Investigators allege that Big Brothers violated these regulations and guidelines with respect to three grants awarded by the Justice Department from 2009 to 2011. The agency is accused of commingling the grant funds with general operating funds, failing to segregate expenditures to ensure that the funds for each grant were used as intended, and failing to maintain internal financial controls to safeguard the proper use of grant funds.

According to the release, the allegations were documented in a 2013 audit of the three grants performed by the Department of Justice Office of the Inspector General. Since 2013, Big Brothers has replaced its management team and begun implementing policies aimed at correcting deficiencies in its management and accounting of federal grant funds.

“The U.S. Attorney’s office is committed to protecting federal grants and ensuring that the funds are appropriately spent,” Memeger said in the release. “Federal grant recipients must administer these grants with transparency and diligence, and the compliance measures implemented pursuant to this settlement agreement will help to achieve those goals.”

Principal Deputy Assistant Attorney General Benjamin C. Mizer, who heads the Justice Department’s civil division, shared Memeger’s sentiments. “The settlement announced today exemplifies the department’s commitment to hold those who mishandle such funds accountable,” Mizer said in the release.

In addition to paying the U.S. $1.6 million, Big Brothers has agreed to institute a strict compliance program that requires the organization to engage in regular audits, both internally and by independent auditors; establish a compliance team, an employee code of conduct, whistleblower policies, and a disciplinary policy for employees who engage in or fail to disclose abuses of federal grant funds; provide regular employee training on these policies; and employ risk assessment tools to detect abuses that might otherwise go undetected, the release said.