One unintended side effect of Congress’s intense efforts to jump-start the U.S. economy is the threat of fraud. Earl Devaney, chair of a newly appointed federal watchdog agency, the Recovery Accountability and Transparency Board, has warned that without precautionary measures, as much as 7 percent of the stimulus package will end up in the hands of bad actors. Apply Devaney’s math to the $31 billion being spent on science—by the National Institutes of Health, NASA, the Departments of Commerce and Energy, and the National Science Foundation (NSF) combined—and stimulus funds represent an unprecedented boost not only for science, but also, potentially, for science fraud.

Under the stimulus bill, formally known as the American Recovery and Reinvestment Act, various science-funding agencies will enjoy a substantial uptick in their budgets. But they are under pressure to dole out the new funds quickly on “beaker ready” projects. The risk of scientific misconduct has generally been considered to be less than 1 percent, but the size of the disbursements and the added reporting requirements (namely, quarterly status reports and updates on job creation) could tempt researchers to cut corners or even fake aspects of applications. Meanwhile at the agencies, the urgency to spend could take precedence over monitoring. “We’re not going to know until it happens. It probably is occurring,” concedes Patricia Dalton of the Government Accountability Office.

Several agencies have already set advanced oversight procedures in place. The NIH and the NSF say they should have enough staff to handle the flood of new grant requests, and both have introduced formal policies on research misconduct. They also employ personnel with extensive experience in handling science fraud.

Other departments, however, may not be as ready. Having been cited previously for cost overruns, NASA has drawn some congressional scrutiny, as has the Department of Energy, the largest stimulus recipient for science (it will spend $15.9 billion of its $38-billion stimulus package on science and technology). Indeed, DOE inspector general Gregory Friedman told a March hearing of the House Science and Technology Committee that he is concerned about poor monitoring of past contracts by DOE staff. He pointed to the agency’s program on technology loan guarantees, which has in the past proved too short-staffed to monitor the loans it makes. Friedman told the committee that the inspector general’s office is preparing for an estimated 500 hotline complaints, 200 investigations, and 30 to 35 complaints of retaliation against whistle-blowers arising from stimulus spending every year. The DOE did not respond to requests for comment.

At most agencies, the first line of defense is the program officers who make the funding decision in the first place. Many are undergoing training to minimize the risk of fraud—for example, they are told to make sure expectations under grants and contracts are clearly stated in advance. “We are moving with all speed” to recruit more program officers, says Ellen Herbst, senior official for recovery implementation at the Department of Commerce, which runs the National Institute of Standards and Technology and the National Oceanic and Atmospheric Administration.

Experts inside and outside government have flagged other ways in which agencies could be doing more. A report on preventing grant fraud, issued in 2006 by the National Procurement Fraud Task Force, recommended that federal agencies share information on people known to be at risk of committing this type of abuse. NASA’s chief financial officer Ronald Spoehel says that although there is no federal database on research grants, officials do check a “past performance” database for information about potential contractors. Agencies such as the NIH and the NSF publish the names of those who have been found guilty of research misconduct. Hence, a list of all known cases could be compiled and checked against new grant awardees. “That would be a useful check and balance,” remarks C. K. Gunsalus, an attorney at the University of Illinois who has handled research misconduct cases.

Some agency officials, however, express some doubt that a shared database of misconduct cases would be desirable to have. “If someone is reprimanded, would we want to say that person would never be funded again?” asks Peggy Fi­scher, associate inspector general for investigations at the NSF. “You act with intention to protect integrity but with compassion” toward those who committed minor infractions, she adds. At the same time that the stimulus funding is a boon for science, it will require delicate balancing on the part of government agencies, too.

Turning Crowds into Watchdogs
Government officials do not have to be the only ones exercising oversight. Through “crowdsourcing,” members of the public could comment on projects online, in such a way that inspectors general would be alerted to problems quickly. “Even for technical projects, if a database is put out there others can police it,” says Eileen Norcross of George Mason University, who testified at the science and technology committee’s March hearings about, which monitors the stimulus expenditure. Testimony at a follow-up May hearing suggested that a Web site called could be fully functional by October and enable the public to track expenditures by zip code. But to reap the full benefits of crowdsourcing, the federal agencies need to be more open: Norcross notes that under the recovery act, agencies need provide only some information publicly.

Note: This article was originally printed with the title, "The Specter of Fraud."