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​Every "Where Was Internal Audit" Moment Presents an Opportunity

Articles ​Art Stewart Apr 09, 2019

Researchers may turn to fraudulent methods to win lucrative grants.

​Duke University has settled a whistleblower lawsuit alleging that university researchers falsified data to win U.S. government research grants, National Public Radio reports. The lawsuit brought by researcher Joseph Thomas accused a Duke University Health Services clinical director of faking data from a lung function study between 2006 and 2018.

That data enabled the university to win and retain grants from the Environmental Protection Agency and the National Institutes of Health (NIH). Further, the lawsuit alleged that university officials ignored signs of possible fraud. To settle the suit, Duke will pay the federal government $112.5 million, with Thomas receiving $33.75 million.

Lessons Learned

Whistleblower programs are among the most effective fraud-detection methods, but a $33 million payout to one individual is a steep price to discover research and data fraud. Here are some other measures that research organizations and grant providers could take to reduce fraud risk.

  • Increasing understanding of how statistics and methodologies can be misused.  Combining this understanding with random audits of research labs could be an affordable way to help deter data fraud and improve research quality. An October 2018 article, "The Fall of the Food Researcher," discussed how internal auditors can better equip themselves to detect the misuse of research data and methodology.

    Further insight into this risk comes from a 2018 study by the Queensland University of Technology School of Public Health and Social Work, in Brisbane, Australia. The study discusses how the "publish or perish" incentive drives many researchers to increase the quantity of their papers at the cost of quality. That, in turn, increases the number of false positive errors that make it challenging for other researchers to reproduce those findings. The study, using simulation techniques, found that auditing just 1.35% of papers avoided the competitive spiral of false positives in 71% of cases. While fraud was not the primary focus of the research, this type of audit could be a worthwhile investment in fraud deterrence.
  • Regulators, overseers, and professional organizations should continuously update their guidance, enforce laws, and promote awareness of the false research problem. In March 2018, the NIH began subjecting Duke's grants to stricter oversight, including requiring Duke researchers to obtain prior approval for any modifications to new and existing grants. Moreover, any application for a grant worth less than $250,000 per year must include detailed budgets justifying the costs.

    University organizations, themselves, could do more to highlight and take action against false research. For example, the Association of College & University Auditors' website currently does not have information about the research fraud issues of the Duke case.

  • The consolidation of research and knowledge-sharing capacity about academic fraud must be strengthened continually. One useful resource for internal auditors is the Audit Research Summary (ARS) Database, developed and maintained by the American Accounting Association. ARS contains executive summaries of approximately 700 academic audit research studies that have been published in peer-reviewed academic journals since 2005. The free database is intended to disseminate research findings to audit stakeholders timely and foster a productive dialogue about issues facing the academic and audit professions. Additionally, it can help identify new and persistent issues that need further investigation.

    ARS is organized topically and can be searched using keywords. The summaries are written to facilitate quick and easy consumption, and avoid academic jargon and statistical analyses. The database is available via Facebook, LinkedIn, and Twitter.

​Art Stewart

Art Stewart is an independent management consultant with more than 35 years of experience in internal audit, financial management, performance measurement, governance, and strategic policy planning.​​​