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Possible Fraud Discovered At Taxpayer-Backed Climate Change Research Group

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Life’s a party living off taxpayer funds — until you get audited, of course.

The National Science Foundation and Defense Department are being investigated by senators for signing off on taxpayer funding that went toward partying and coffee drinking at a climate change research nonprofit.

The National Ecological Observatory Network (NEON) has reportedly received tens of millions in taxpayer dollars from NSF — $90 million this year alone — to collect global warming data across the country. But Republican Iowa Sen. Chuck Grassley says NEON has been using some of that money on lobbying and partying instead.

A draft audit given to Grassley earlier this year “showed a climate change group used federal funds to pay $112,000 for lobbying, $25,000 for an office Christmas party, and $11,000 for ‘premium coffee services’ and an unspecific amount on French hotels,” reports The Washington Post.

“Spending taxpayer dollars on alcoholic beverages is absolutely prohibited, and spending taxpayer dollars on meals, entertainment, and travel that is not part of official business, which is paid from or attributable to a federal grant, is also prohibited by governmental regulation,” Grassley wrote in a letter to NEON, earlier this month. The letter was also signed by Kentucky Republican Sen. Rand Paul.

For the last four years, NEON classified such expenses as a “management fee,” and internal documents show NSF was having trouble meeting NEON’s funding needs. The audit, however, concluded this was a “mechanism by which NEON evaded the prohibition against the payment of unallowable costs.”

NEON Chairman James Collins replied that the group “has spent all funding in strict compliance with our understanding of the guidelines provided.”

The NSF declined the Post’s request for comment as the audit was still pending. An NSF spokeswoman told the Post that being “a good steward of taxpayer funds is a priority for NSF, and we make awards to the most qualified entities in achieving our mission of supporting fundamental research.”

But top officials in the Defense Contract Audit Agency that employed the person who wrote the audit said it “plans to override his findings and approve the costs,” reports the Post.

“Government regulations put no restrictions on the company’s use of this fee,” DCAA said in a statement. “Because Government regulations put no restrictions on management fee expenditures, it is inappropriate for DCAA to disallow those costs.”

The reason the audit was leaked to Grassley’s staff was because the auditor feared he was going to be “whitewashed” by DCAA.

NSF gave NEON funds to collect data “on the impacts of climate change, land use change and invasive species on natural resources from 106 sites across the nation over a 30-year period,” reports the Post. “The sites where scientists will collect their data are still largely under construction, and NEON says it will not be in full operation until 2017.”

Grassley and Paul believe NSF willingly signed off on sketchy expense reports from NEON. Grassley noted the “2008 letter to NSF seems to have started the now-standard practice at NEON of using a taxpayer-funded ‘management fee’ to cover costs for which federal grant money should not be awarded. ”

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