The Mayo Clinic will pay $6.5 million to settle claims that it misspent millions of dollars in research grants, the clinic and the Minnesota U.S. attorney's office said Thursday.
The clinic reached the settlement to avoid a protracted investigation and did not admit any wrongdoing, Mayo spokesman Chris Gade said.
The investigation was prompted by whistleblower Christine Long, a former Mayo employee, who accused the clinic of violating federal law by charging the government for unrelated research grant expenses. Long will receive $1.3 million in the settlement.
Federal authorities accused the clinic of transferring some clinic expenses and some research expenses that went beyond grant amounts to other grants that hadn't exhausted their budget. They claimed it was a way for the clinic to cover extra research costs and avoid refunding unspent grant money. Authorities also said Mayo's accounting system could not monitor and manage grants "in the manner required by federal law."
The clinic said the probe reflected a "difference of opinion" over bookkeeping procedures -- not fraud -- and that it didn't submit false claims to the government. Mayo agreed to change its documentation procedures.
"All federal grant dollars have been accounted for," said Denis Cortese, M.D., the clinic's president and chief executive officer.
The Rochester-based Mayo Clinic receives about $100 million each year in federal research grants and contracts. The investigation, which began in November 2003, involved federal research grants dating back to 1992.
"This settlement makes clear that all medical researchers, regardless of size and experience, must comply with regulations designed to protect precious federal medical research funds," U.S. Attorney Thomas Heffelfinger said in a statement.