Q DEPARTMENTHEALTH

OF & HUMAN
SERVICES Public
Health
Service

National Institutes
Bethesda,
of
Health
Maryland 20892

March 2018
12,

Adrian
Hernandez,
M.D., MHS
Vice
Dean
for
Clinical
Research
SchoolMedicine
of
Duke
University
Durham,27710
NC

Dear
Dr. Hernandez:

I am writing youto
the
ofactions
inform
thatNational
the of
Institutes
Health
(NIH)
is
taking with
respect
to grants
administration
at Duke
University
(Duke).
NIH
isextremely
concerned
about new
allegations
of
misconduct
at Duke,
and Duke's
response
to such
allegations,
per
correspondence
with
Dukesince
December
2017elaborated
below,
especially
when
thesenew
allegations
are
put in context
as continuing inadequate
indication
internal
controls
of and oversight
over
the
useofNIH
grant funds
and research
integrity,
and resultant
the noncompliance
withterms
the
and conditions
of
NIH
grant
awards.Regulations
at CFR
4575.303require
that a non-Federal
entity
"must
establish
and maintain
effective
internal
controlthe Federal
overaward thatreasonable
provides
assurance
thatnon-
the
Federal
entity
ismanaging Federal
the
award in compliance
with Federal
statutes,
regulations,
and the
termsand conditions
ofthe
Federalaward."

As further background
the
context
regarding
ourfor
concerns
about Duke's
management
ofNIHawards,
bolstering
our decision
to take
the
actions
discussed
here
following
Duke's
management
of
themost
recent
misconduct
allegations
impacting
awards,
NIH
wereference
the
following
examples
ofother
recent
research
integrity
concerns
at Duke
that impacted
have NIH-funded
research:

» Fifteen
papers
involving
contributions
from
Ms.Erin Potts-Kant,
serving
as
a while
Duke
employee
involved
in research
funded by
have
now
NIH,been
retracted,
with many notices
citing "unreliable"
data. Several
others
have
been
modified with
partial
either
retractions,
expressions
of
concern,
or corrections.
• In ongoing litigation of filed
Ms.Potts-Kant,
by a researcher,
former
the
her
former
colleague
supervisor,
and University
the are
accused
of
including fraudulentapplications
and
data in NIH
reports
involving
more
thangrants
60estimated
at $200
million.
• Dr. Potti
Anil
engaged
in research
misconduct
while
serving
as
a Duke
employee
involved
in
research
funded by NIH,
including
research
data
false inpapers,
several
manuscripts,
grant
applications
and research
records.
Falsified
results
werepublished
in atnine
least
scientific
journals,
reinforcing a significantscience.
impact on NIH-funded

EXHIBIT

a 7 ^ 9
CONFIDENTIAL Duke-Pulm-0202
Case 1:17-cv-00276-CCE-JLW Document 227-27 Filed 08/07/18 Page 2 of 5
 Page 2-Adrian
Hernandez,
M.D., MHS

• As
wenoted
in previous
correspondence
(September
18,
2017)
to Mr. Dickman,
Michael
Associate
Director
of
Research
Administration
at Duke
University,
NIHfound
that an
Investigator
inappropriately
uploaded
a blank placeholder
in of
lieu
a Biosketch
in a grant
application (2R01GM066014-17),
The application
e-validation
passed
checking
because
the
system
confirmed thathad a "document"
been
uploaded,
delaying
recognition
that the
application
in fact,
incomplete.
was, It appears
this
was
an attempt
to circumvent
application
requirements.
Whileappreciate
we the
efforts taken
youtohave
communicate
with the
involved
investigator,
thefact
thatevent
this
occurred
at all additional
raises about
concerns
the
adequacy
of
research
grant oversight
at your institution.

Mostrecently,
Dukesent
NIHa letter
dated
December15,2017,
notifying
NIHof(1)allegations
of
research
misconduct
against
several
investigators
in Duke
theDepartment
ofPsychiatry and (2)
potential
issues
concerning
clinicalirregularities
research
such
asnot adhering
to theresearch
plan,
inadequate
reporting
of
adverse
events
to the
IRB
and regulatory
agency,
and signing
data forms
without conducting Dueto
assessments.
lack
details
concerning
of patient
welfareand safety
and
with no further from communications
Duke,
in a dated
letter
January
31,
2018,NIHasked
Duketo
respond
to NIH's
overarching
concern
for
thewelfare
and safety
of
research
participants
aswell
as
several
pertinent
questions
concerning
thereported
research
irregularities,
NIH suspended
the
seven
NIHgrant awards
identified
asimpacted
by these
issues
untilis able
Duketo assure
the
welfare
and safety
ofresearch
participants.
Of particularduringrelevance,
a
call
phonebetween
NIHand Duke
on February
5,2018,
regarding
this
matter,
Dukeexpressed
confusion about how t
manage
NIHawards
under
these
circumstances
of
misconduct
allegations;
acknowledged
that Duke
did not NIH
follow
protocol, including
requirement
in terms
the
the and conditions
of NIH
awardsto
notify
NIHand seek
approval
for
changes
in senior/key
personnel;
and specifically
asked
forNIH's
further guidance
and assistance.
We received
additional correspondence
from Dukeon February
14
in response
to our questions,
Whilewillwesending
beour detailed
response
shortly,
Duke's
February
14letter
did not sufficiently
our concerns,
including
address but to:
failure
not limited
to
note
halts
to study
enrollment
in NIH
progress
reports,
enrollment
ofineligible
patients
into clinical
protocols,
and ambiguity
to whether
the
as
IRBhasbeen
(asopposed
to "will notified
be") of
protocol deviations,

In light
all of
circumstances
above,
in order
to provide
additionalofDuke's
oversight
management
of
NIHgrant awards,
NIHwill withdraw
expanded
certain
authorities
and require
certain
actions
by
Dukein accordance
withCFR
45
75.207,
SpecificConditions,
Award
and NIH
theGrants
Policy
Statement
(NIHGPS), and
a term
condition
all grant
NIHof awards,
Section
8,5,
Remedies
for
Noncompliance
and Special
AwardConditions.

Specifically,
all and
newfor
continuation
grant awards
that
NIH issued
areon or after
1,2018,
April
the
following
two expanded
authorities
willwithdrawn.
be This
that
will
request
Duke
require
and
receive
written
prior approval
from
the
N|H
awarding
before
IC(s)
taking of
either
these
actions
for
up tomonths
18 or otherwise
as required
at discretion
the ofNIH:

1. No automatic No-Cost-Extensions:
no automaticof
the
extensions
final
budget
period
forup to
months
12are
permitted
without prior
approval;
written
and

CONFIDENTIAL Duke-Pulm-0202
Case 1:17-cv-00276-CCE-JLW Document 227-27 Filed 08/07/18 Page 3 of 5
 Page 3-Adrian
Hernandez,
M.D., MHS

2, No automaticofunobligated
carryover
balances:
no automaticof
unobligated
carryover
balances
from
onebudget
period
to any subsequent
period
is
permitted
without prior
written
approval,
regardless
of
thegrant mechanism.

Additionally,
NIHalso
will reqliest
that submit
Duke
full
budgets
in support
of
modular application
which will
requested
be
by each
awarding
as
part
ICthe
of
Just-in-Time
process.
Further,
Duke
is
required
to develop
and implement
a corrective
action plan
and
tocorrect
assess
apparent
systemic
weaknesses,
as
follows:

1. Financial Management,
asrequired
by CFR
4575.302and NIHGPS including
8.3.1,
written
policies
and procedures
and effective
internal
controls
over:
o Determining
allowable
and unallowable
costs;
accurate
application costing;
monitoring expenditures;
of sourcedocumentation;
compliance
with special
termsand conditions
ofgrant award, including ofgrant activities;
suspension
theuseoffunds the
for
purpose
for
which were
they
awarded;
purchasing,
and
staff
responsibilities,
including, but to, not
Project
limited
Directors/Pr
Investigators,
2. Preparation and ofgrant
submissions
applications,
asrequired
by NIHGPS and2.3.6
2.3.9.5,
including policies
written
and procedures
and effective
internal
controls
over:
o complete
and accurate
applications,
conformity
with all application
requirements;
compliance
with all assurances
applicable
and certifications;
correct
F&Acost
rate;
correct
other
support;
subawards
and monitoring; and
staff
responsibilities,
including, but to, not
Project
limited
Directors/Pr
Investigators.
3. Research
misconduct,
asrequired
by CFR
4293and NIHGPSand 4.1,27,
protecting
the
integrity
ofresearch,
including policies
written
and procedures
and effective
internal
controls
over:
o Process
and procedures
foraddressing
allegations
of
research
misconduct,
fostering
research
integrity
to include
but notto limited
electronic
laboratory-
notebooks,
training
faculty,
oversight
of ofthescientific
process,
protection
of
human subjects
and vertebrate
live animals during misconduct
investigations,
and staff
responsibilities,
including, but to, not
Project
limited
Directors/Principal
Investigators.

Dukemust
develop
a corrective
action plan the
addressing
items
specified
above
to include
an
assessment
ofexisting
internal
controls
and policies
and procedures.
This corrective
action plan must
be submitted
to GrantsCompliance@OD.NlH.GOV
by April
30,
2018,
for
review
and approval
prior to
Implementation.
Dukemust
provide
quarterly
updates
to NIH
on progress
Its toward completion,
identifyingproblem
anyareas.
noted
Once
Dukehas
completed
this
assessment,
it must
provide
NIH
with a ofreport
its
activities
and discussion
of
subsequent
actions
taken
to institute
or strengthen
internal
controls,
asappropriate.
NIH
will observe
these
actions
for
the
remainder
ofthe
fiscal18 year
and will reconsider
the
needfor
these
or other
requirements.
NIHwill ensure
thatadditional
the
requirements
are
removed
uponassessment
its thatconditions
the that prompted
them,
as
detailed
above,
have
been
corrected.

CONFIDENTIAL Duke-Pulm-0202
Case 1:17-cv-00276-CCE-JLW Document 227-27 Filed 08/07/18 Page 4 of 5
 Page4-Adrian
Hernandez,
M.D., MHS

The NIH
Office
ofPolicy
for
Extramural
Research
Administration
will work you
withdevelop
you as
Duke's
corrective
action plan.
respond
to
Please
Michelle
Bulls
at Michelle.Bulls@nih.fiov
by March 16,
2018
acknowledging
your receipt
of
this
letter.
Please
feel
free
to contact
at Michelle
301.594.6739
or
Diane
Deanat:
Diane.Dean(S)nih.gov
or 301.435.0930
if
you have
additional any
or requests
questions
regarding
the
additional requirements.

Sincerely,

j Michelle
G, Bulls,
Director
!$)%/ Office
of
Policy
for
Extramural
Research
Administration,
f Office
of
Extramural
Research
National Institutes
of
Health

cc:
Michael
S. Lauer,
M.D., IMIH
OER,
Jodi
Black,OER,
Ph.D.,
NIH
Diane
W.Dean,
OPERA,
OER,
NIH
James
D. Luther,
Associate
VP,Research
Costing
Compliance
& Federal
Reimbursement,
Duke
University

CONFIDENTIAL Duke-Pulm-0202
Case 1:17-cv-00276-CCE-JLW Document 227-27 Filed 08/07/18 Page 5 of 5