Big Brothers Big Sisters of America Corporation (Big Brothers) agreed to pay the United States $1.6 million to resolve allegations of false claims for funds it received under grants from the Department of Justice to help children at risk.
Big Brothers is a not-for-profit organization that provides mentoring services to boys and girls throughout the United States.
The organization, originally based in Philadelphia, Pennsylvania, is now headquartered in Tampa, Florida. It acts through about 300 independent affiliate agencies across the United States.
Since 2004, Big Brothers received millions of dollars in DOJ grants to support initiatives on behalf of children at risk, the DOJ said.
A condition of the grants and federal regulations required Big Brothers to maintain accounting and financial management systems to make sure the grant funds were spent as intended and properly accounted for.
Big Brothers violated the regulations for three DOJ grants awarded from 2009 to 2011. It allegedly commingled grant money with general operating funds, failed to segregate expenditures to ensure the grants were used as intended, and didn’t maintain effective internal financial controls.
The DOJ Office of the Inspector General documented the allegations in a 2013 audit. Since then, Big Brothers has replaced its management team and adopted remedial accounting and management policies for the handling of federal grant money.
In addition to paying the United States $1.6 million, the settlement requires Big Brothers to have a strict compliance program with regular audits, both internally and by independent auditors.
The organization agreed to establish a compliance team, adopt an employee code of conduct, and put in place whistleblower policies.
The compliance program specifies regular training of employees and the use of “risk assessment tools to detect abuses that might otherwise go undetected.”
The DOJ said the claims resolved by the settlement were allegations only and there was no determination of liability.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.