In order to thoroughly implement the national policies on the management of research funds and to fully utilize the deterrent effect of warning education, this compilation of typical cases has been prepared. The aim is to guide faculty and staff to accurately grasp the policy documents regarding the management of research funds, deeply understand the seriousness of fund usage; consciously abide by research ethics and morals, promote the spirit of scientists; effectively enhance awareness of rules and red lines, learn from cases, know respect, maintain caution, and uphold the bottom line, ensuring that all research funds are used for research activities, thereby creating a clean and upright research environment.
1
Fabrication of Business and External Collaboration to Misappropriate Funds
1
Former Associate Professor of XX University, Yan, Fabricated Technical Contracts to Misappropriate Funds
From September to December 2019, to misappropriate 20% of the matching research funds from the school, Yan, as the project leader, signed 17 fictitious horizontal research and technology development contracts with 10 companies controlled or introduced by Ma. At the same time, Yan also signed 7 fictitious horizontal research and technology development contracts with another 6 companies, with a total contract amount exceeding 14.7 million RMB. Yan instructed Ma to issue false VAT invoices for purchasing research materials, reimbursing a total of over 2.46 million RMB from the 20% matching research funds that the school should allocate based on the contract amount. After deducting the school’s management fees and unreimbursed matching research funds, Yan and Ma jointly took over 2.2 million RMB of the matching research funds for personal use. Yan was sentenced to three years and six months in prison and fined 200,000 RMB, with illegal gains returned to the school.
2
Former Dean of XX College, Wu, Signed False Literature Retrieval Contracts to Misappropriate Research Funds
During his tenure as the dean of XX College, Wu took advantage of his position as the project leader and supervisor of project fund approval and usage to sign false literature retrieval contracts with Company A and Company B, transferring a total of over 380,000 RMB in literature retrieval fees paid by the institution to the aforementioned two companies in exchange for cash for personal use. Wu was sentenced to three years and six months in prison, fined 200,000 RMB, and ordered to return over 380,000 RMB to the college.
Core Issue
By fabricating completely non-existent research activities or cooperative relationships, signing false contracts, and transferring public funds to interested parties.
Prevention Suggestions
Strengthen the project initiation demonstration and contract acceptance review for horizontal projects; establish a supervision and acceptance mechanism for contract execution; set up risk warnings for unusually high and frequent contract signings.
2
Using Related Companies and External Collaboration to Misappropriate Funds
3
Former Professor of XX University, Chen, Used Related Companies for External Collaboration to Misappropriate Research Funds
During his tenure as the project leader, Chen, while applying for and winning a major special project, took advantage of his position to list B and C companies, which he controlled and exaggerated their research capabilities, as external collaboration units, and listed his doctoral students as key participants from B and C companies. Chen instructed his doctoral students to use false invoices, fabricate false contracts, and create false accounts to misappropriate over 9 million RMB of national funding from B and C companies. Chen was sentenced to ten years in prison and had 200,000 RMB of property confiscated.
4
Former Professor of XX University, Li, Embezzled, Issued False Invoices, and Fabricated Labor Expenditures to Misappropriate Research Funds
Li, in collusion with Zhang, took advantage of his position managing project funds to embezzle a total of over 37.56 million RMB in project research funds through means such as embezzlement, fraud, issuing false invoices, and fabricating labor expenditures, including embezzling 20.92 million RMB from project funds managed by other team members. The funds were transferred to companies actually controlled by Li and invested in other companies. Li was sentenced to twelve years in prison and fined 3 million RMB, while Zhang was sentenced to five years and eight months in prison and fined 200,000 RMB; the embezzled property was recovered and returned to the national treasury.
Core Issue
Using companies actually controlled by oneself as external collaboration units, misappropriating research funds by inflating quotes and fabricating costs.
Prevention Suggestions
Mandate the disclosure of the relationship between project leaders and external collaboration units, implement conflict of interest avoidance; strictly review the qualifications and quotes of external collaboration units; strengthen audits and performance evaluations of fund usage after transfers, tracking the final flow of funds.
3
Fictitious Expenditures and Accounting Fraud
5
Former Professor of XX University, Zhang, Fabricated Labor, Misappropriated Public Funds, Fabricated Contract Prices, and Illegally Used Funds
Zhang took advantage of his position responsible for the research experiments of the National Key Laboratory, under the pretext of paying temporary workers’ labor fees, misappropriating a total of 255,000 RMB in research funds over 17 instances, which were not actually disbursed and were all deposited into Zhang’s personal bank account for daily consumption. Zhang also took advantage of his position responsible for the unmanned aerial vehicle remote sensing platform project, colluding with the head of an aviation technology company to inflate contract prices, and after the payment was received, the excess amount was returned to Zhang, misappropriating 450,000 RMB of special research funds, part of which was used to purchase a Kia Borrego SUV registered in his name. Zhang was sentenced to eleven years in prison.
6
Former Associate Professor of XX University, Senior Engineer Yin, Fabricated Business, Forged Contracts, Falsified Signatures, and Stole Official Seals to Reimburse Public Funds
Yin, taking advantage of his position as a member of the project management office at XX Research Institute, fabricated twelve procurement transactions, using forged procurement contracts, falsified signatures of supervisors on reimbursement forms, and stole official seals, misappropriating a total of over 5.6 million RMB in project funds. The project funds were transferred to several accounts controlled by Fan, who then returned over 2.5 million RMB to Yin in cash or bank transfers. Yin used over 1.1 million RMB to purchase real estate, with the remainder used for investment and personal expenses. Yin was sentenced to eleven years in prison and fined 800,000 RMB, with illegal gains returned to the research institute.
Core Issue
Directly misappropriating funds through falsifying labor lists, issuing false invoices, and fabricating false accounting documents.
Prevention Suggestions
Comprehensively promote the issuance of labor fees through bank cards, establish verification mechanisms for personnel authenticity and workload reasonableness; strengthen financial audits, conducting substantive checks on large, consecutive, or suspicious invoices; implement checks and balances to avoid “one-person handling” of key business.
4
Irregular Reimbursements and Mixing Public and Private Funds
7
Former Director of XX University, Gao, Irregularly Reimbursed Expenses
Gao took advantage of his position as the project leader to irregularly reimburse a total of over 160,000 RMB for expenses such as airfare, communication fees, and shopping expenses from the research project funds he managed, and reimbursed family airfare, communication fees, and shopping expenses totaling over 60,000 RMB from the research start-up funds for talent introduced by the school. Additionally, Gao irregularly reimbursed travel expenses and personal property fees totaling over 200,000 RMB from the organizational implementation and reward funds allocated for research projects by the school. Gao received a two-year party probation and was dismissed from his position.
8
Committee Member of XX College, Li, Misappropriated Research Funds for Eating and Drinking
Li issued an extra subsidy of 500 RMB to each of the nine master’s students in the research group, requiring students to return the extra 500 RMB for a group dinner for over 40 people. When the school’s discipline inspection commission spoke with Li about the situation, he did not truthfully explain the situation to the organization. Li received a party disciplinary sanction and was ordered to return the misappropriated funds.
Core Issue
Directly treating research funds as a “personal wallet” for reimbursing personal consumption, family expenses, or activities unrelated to research.
Prevention Suggestions
Develop and improve a “negative list” for reimbursements, clearly stating prohibitive regulations; strengthen internal audits to randomly check the substantive content of reimbursement expenditures; reinforce the responsibility system for project leaders and the education of integrity and ethics.
5
Misappropriation of Public Funds and Use for Profit
9
Former Professor of XX University, Hu, Misappropriated Public Funds and Purchased Financial Products
During his tenure as the project leader at the Explosive Engineering and Equipment Research Institute of XX University, Hu misappropriated funds from the research institute’s account to his personal bank account through pre-borrowing project funds, then reimbursed to offset the accounts, forming a situation of misappropriating public funds, which posed potential risks to project funding. He also improperly profited by using project funds to purchase financial products during the time lag of paying project expenses. Hu received a one-year party probation and was demoted (from level four professor to level eight lecturer).
Core Issue
Violating financial discipline by depositing public funds into personal accounts and using the time lag of funds for investment and profit.
Prevention Suggestions
Strictly implement the “public service card” settlement system to minimize borrowing and cash payments; strengthen the cleaning and offsetting supervision of pre-borrowed funds; implement dynamic monitoring of bank accounts, strictly prohibiting the private storage of public funds.
6
Misappropriation and Establishment of “Slush Funds”
10
Teacher Zhou from a certain university Misappropriated Research Funds in the Name of Providing Allowances to Students
Zhou misappropriated a total of over 1 million RMB in research funds from his responsible research project under the guise of providing research assistant allowances to students, of which over 753,000 RMB was used to pay students’ research assistant allowances, while the remaining 256,000 RMB was mainly used for personal labor remuneration and to cover non-reimbursable expenses for the commissioning party, excessive review fees for experts, gift expenses, and sightseeing expenses. Zhou received a party probation and was demoted.
Core Issue
Misappropriating funds in the name of others or intercepting allowances that should be given to students, creating a circular flow of funds for irregular expenditures.
Prevention Suggestions
Establish a public announcement and confirmation mechanism for the issuance of labor allowances to ensure proper distribution; encourage and support students and team members to report violations; strictly investigate “slush funds” and cut off the funding sources for irregular expenditures.
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