FOI File No.

13-186

Summary of Internal Audit Report

Special Investigation Final Report (July 2013)

A Faculty and Internal Audit jointly reviewed allegations related to a researchers handling of research
funding. As a result of the findings of this review, a Scholarly Integrity Investigation under UBC Policy 85
Scholarly Integrity began, but was unable to come to a conclusion on the allegations in question. An
interim Internal Audit report was issued in May 2013. This report summarized the results of our work to
date and concluded that strong evidence had been found to support the fact that the researcher had
perpetrated financial impropriety. The researchers employment has been terminated. The purpose of
this audit is to further investigate payments from the University to a third party as well as to review the
research accounts of the researcher.
Internal Audit contacted the RCMP initially. However, this case also involves VCH and PHSA who fall
under the Vancouver Police Departments (VPD) jurisdiction. Consequently, both police authorities
agreed to have VPD handle the criminal investigation. We are working with the VPD to coordinate the
evidence. Because the financial impropriety mostly involved research money, the Office of VP research
is coordinating communications with the appropriate research funding agencies, in conjunction with
VCH and PHSA.
Internal Audits investigation included the following:
A review of the payments received from and paid to a third party
A review of the financial activity in the researchers accounts. This review focused on
reimbursements to the researcher, unusual vendor payments, and journal vouchers transferring
funds.
A review of the researchers purchase card transactions.
Use of audit software to determine if there were any payments to University vendors with the same
address as the researcher.
Discussion with the Department Head.
Sharing of information with VCH and PHSA from fiscal 2007 to 2013, to determine the extent of
duplicate reimbursements to the researcher from the University and the Health Authorities.
A search was conducted by VCH internal auditors of the researchers office at VCH. All files
pertaining to UBC were retrieved and reviewed by IA.
Based on the review, Internal Audit has found evidence of financial impropriety by the researcher using
the following means:
1. Reimbursements claimed twice and sometimes three times through his research accounts at the
University, VCH, and PHSA: In total, the losses due to duplicated reimbursements, spread amongst the
3 institutions is $425K for the period April 1, 2006 to March 31, 2013. In calculating this loss, Internal
Audit has made the assumption that the original expense claims were valid.
2. Improper transfers to the researchers Unrestricted Accounts, and from these accounts to other
institutions: The PI processed a number of improper transfers from his research accounts to his
unrestricted accounts as well as some unsupported payments to VCH and PHSA. It believes these
transfers and payments were done in part to finance the double and triple expense claiming scheme
described in point 1. Internal Audit can confirm that the researcher made $240K of transfers from his
funding agency research accounts to his unrestricted research accounts administered by UBC. In or
around the same time frame, the researcher transferred $220K from his UBC unrestricted research
account and his funding agency research account to the VCH and PHSA accounts from which he was
double (and triple) claiming expenses (as described in point 1 above). $140K of this amount went to the

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FOI File No. 13-186

Summary of Internal Audit Report

PIs VCH account and $80K went to his PHSA account. The balance in his PHSA account (~$50K) was
transferred back to UBC in March 2012. According to the limited support that the PI attached to the
payment requisitions, these payments were made to pay for lab supplies incurred at VCH and PHSA.
However, based on information obtained from VCH and PHSA, it does not appear there were enough lab
purchases at these organizations to justify these payments. A large portion of costs paid from these
organizations were for reimbursed travel and non-travel expenses that were also claimed at UBC.
3. Improper paybacks to a third party: There is evidence to conclude that the payments to a third
party, $58K in total, were not for valid expenses incurred by the third party, but rather, were paybacks
of the exact amounts the third party was contractually obliged to pay to the University.
Internal Audit also reviewed and summarized the researchers travel expenses and has concerns about
the frequency and number of his overseas trips as well as questions regarding the researchers
payments made to a company. However, due to the fact that Internal Audit not able to interview the
researcher, it cannot form any conclusion as to the validity of these expenses. The VPD has been
apprised of our concerns involving these transactions.
In summary, Internal Audit estimates that UBCs total losses as a result of the financial impropriety to be
$228K attributable as follows:
$170K relating to the invalid payments to VCH ($140K) and PHSA ($80K less $50K returned) that
appear to have been used to fund the duplicate and triplicate reimbursement scheme at the other
organizations. Potential recovery of this amount is being negotiated by the Office of the University
Counsel.
$58K related to the payback scheme involving the third party. Due to the potential criminal nature
of these transactions, the VPD has advised us not to pursue this matter with the third party. It is not
known if this amount will be recovered from the third party.
Internal Audit made several recommendations to address the issues identified during this investigation
and to improve controls over research administration.

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