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The U.S. Office of Special Counsel (OSC) today sent letters to the President and Congress alerting them that, over the last decade, the U.S. Department of Health and Human Services (HHS) misappropriated millions of dollars Congress intended to fund vaccine research and emergency preparedness for public health threats like Ebola, Zika, and COVID-19. A whistleblower alerted OSC to the misuse of funds appropriated to the Biomedical Advanced Research and Development Authority (BARDA) within HHS. OSC referred the allegations for investigation by the agency, which was conducted by HHS's Office of Inspector General (OIG). The investigation substantiated many of the allegations, finding that since at least fiscal year (FY) 2010, the Office of Assistant Secretary for Preparedness and Response (ASPR) misused funds appropriated for BARDA and failed to accurately report this mismanagement to Congress.
The report contains evidence that ASPR used BARDA's research funds to pay for myriad unrelated expenses, including the removal of office furniture, administrative expenses, news subscriptions, legal services, and the salaries of personnel who did not work for BARDA. The report reveals that the practice of using BARDA funds for non-BARDA purposes was so common, there was even a name for it within the agency: “Bank of BARDA." HHS OIG determined that ASPR had “violated the Purpose Statute" and “potentially violated the Antideficiency Act."
While the report does not contain a specific estimate for total funds misappropriated, it contains evidence that as recently as FY 2019, approximately $25 million was taken from BARDA's Advanced Research and Development (ARD) programs and improperly provided to ASPR. Moreover, from FY 2007 to 2016, ASPR's reporting to Congress failed to account for $517.8 million in administrative expenditures. The report found that “ASPR is unable to demonstrate that the[se] BARDA funds were used for their appropriated purposes."
In response to the findings, HHS's Assistant Secretary for Financial Resources and Office of General Counsel have initiated an internal review of the agency's use of ARD funding for FY 2015 through 2019 to identify potential Antideficiency Act violations. The agency has also hired an outside accounting firm to audit the agency's use of ARD funding, both of which are estimated to be completed by the summer of 2021.
“I am deeply concerned about ASPR's apparent misuse of millions of dollars in funding meant for public health emergencies like the one our country is currently facing with the COVID-19 pandemic," said Special Counsel Henry J. Kerner. “Equally concerning is how widespread and well-known this practice appeared to be for nearly a decade, even garnering the nickname 'Bank of BARDA.' I urge Congress and HHS to take immediate actions to ensure funding for public health emergencies can no longer be used as a slush-fund for unrelated expenses."