Question about ethics and possible misappropriation of research funds

Question

I am working for a professor who started out recently. Most new professors get start-up funding from the department which helps them pay for their first students. Right now I am working in the lab with another PhD candidate; both of us have been funded by departmental funds until now.

The PhD is working on a project which has no funding. I am working on a corporate-funded project for my thesis. Now I am the PI for this project internally. So I did the whole project as my thesis and I was listed as the PI on consent form (approved by my university IRB) when I carried out the final testing of my product with the corporate sponsor.

Here is where things turn shady. When I carried out my testing, we paid the participants through my research funds (the account number for the project is listed on some departmental documents that I had to sign to get cheques for test participants). In my GRA contract, it was specified that my funding was coming from the departmental account and when the PhD candidate showed me their contract, it was getting funded from my project account (the stipend account number was my project account number and I have confirmed this with a student departmental assistant). Their stipend was coming from my project funds.

I spoke with few other people in the department, and came to know that when the department gives seed funding to new professors, there is a limit in stipend they can give. So to give the PhD student more funding, my advisor is using my research funds (for which I am PI) to pay this stipend and thus is getting double my stipend. I am still getting funded by the department, so I get a lot less.

Screwed-up thing is this project is highly successful as I did a lot of hard work and I am not getting any financial incentive. In fact, it's all going to the other researcher who is nowhere involved in this project. The sponsor is giving my advisor funding for a second phase next month and also offered me a full-time job at their corporation. I should probably mention that I don't have a good relationship with my advisor and we fought multiple times in past due to some other issues but the PhD candidate gets along very well. They are like family friends and have very good social interactions.

I am graduating this December, so it probably won't matter anyway, but is this ethical? Can I speak with my department chair about this? I had asked my advisor multiple times to increase my stipend but they said they cannot. The questions is not about money — it's more about betrayal by your own advisor who you trust to be fair.

I still have the copy of the departmental documents used to order cheques for testing showing my account project number and a copy of the PhD candidate's contract.

Answer 1

I will disagree with Joe Hass, in that it's quite possible that your advisor is very likely doing something unethical by paying you and your colleague different amounts for the same position in the absence of merit-based arguments to do so, it is quite possible that nothing illegal is happening that requires reporting.

The important issue here is that you do not know the terms of the contract between the external sponsor and your advisor. In particular, you would need to know what restrictions have been placed on the funds provided: in some cases, it may simply be an unrestricted "block grant" that the advisor can spend in any manner of her choosing. If this is the case, then the only regulations that might have been broken are departmental regulations.

Now, on the other hand, if there are restrictions on the use of the funds, it is much more likely that something inappropriate has occurred, but without knowing the agreement, you could be setting yourself up for needless trouble, so proceed with caution.

Answer 2

I cannot really tell what you question is about, but let me try and clarify a few things.

First, being the PI on an institutional review board application does not make you the PI for the funded project. It is not clear what you mean by "your" project funds, but from your description it does not sound like it is your funding, but rather funding that your supervisor was awarded and is providing you access to for you to accomplish your thesis.

Second, applications for funding generally have around 3 aims. The linkage between these aims can be pretty loose. It is not uncommon for students working on different aims of the same grant to think their projects are completely independent. Often a grant might not provide funding for all the staff required to complete the aims. In fact a selling point to potential funders is the ability to leverage their funding with "outside" funds like a departmental studentship.

The real issue I think in your question is if it is ethical for your supervisor to use her funding to pay PhD students different amount. The answer to this is that it is most likely ethical. It is possible your supervisor has circumvented the policies of both the funder and the department, but this seems unlikely. It is quite likely that your department has a fixed, relatively low, stipend for internally funded PhD students, but allows for PhD students funded from outside grants to be paid more. In my mind there is nothing unethical about that.

So then the question is why is your lab mate being funded by the grant while you are being funded by the school. No one but your supervisor can answer this. Maybe she flipped a coin. Maybe she thought your the project of your lab mate was closer aligned to the aims of the grant. Maybe, as you say, she likes your lab mate better and cannot be trusted. Before going down that road, you need to remember that it is quite possible that the decision of who to fund from where may have been made prior to either of you applying to grad school.

Answer 3

Not knowing where you are in the world makes this a bit complicated so I will answer from the only perspective I have, which is working in the USA. What you are describing may...possibly...be illegal.

First, save every scrap of paper that has any bearing on the matter. Save every email and text message.

Second, do not go public...yet. Don't call a newspaper, write about it on Facebook, or text your best friend.

Third, figure out what the proper channels would be in this case and go through them first. If you are at a public university there may be an internal auditor who looks at these things. You should be able to talk to that person confidentially, and they should be able to quietly determine if any university policies or public funds were misused. Be very honest about what you know to be a fact with evidence to back it up, as opposed to what you suspect but cannot prove. Don't make allegations that you can't support with documentation. If you have suspicions you can present them but make it clear that you are not sure whether the situation is improper or not. Separate your personal feelings about your advisor from the objective truth of their behavior.

Fourth, if the funds in question come from an external public agency (such as NSF, NIH, or NASA in the USA) then those organizations will have offices that investigate possible cases of financial misconduct. In the USA they are called the "Inspector General".

Fifth,...I don't know what comes fifth. If you get to this point and you still think that misconduct has occured, but none of the normal channels are working or you feel that you have no support, then you face a difficult personal decision. If you are absolutely certain that you have proof of financial misconduct (by the terms of the applicable laws or policies) then you can put your career at risk and go public for the sake of your personal ethics and morals. You will probably pay a high price for being honest. Good luck.

Answer 4

While there are a lot of confounding elements to this question (e.g., misunderstandings about who is the PI, different pay levels), the only ethical/legal issue here is if the corporate funds are restricted to paying someone who is actually working on the project. This has three complications:

1. Corporate Awards Are Not Uniform: There is really no way to know without looking at the contract if they care how the money is spent.
2. Contracts Are for Audits/Disputes: From a legal standpoint for a civil contract, contracts are the recourse that you go to when things go bad and you need to sue (or threaten to sue). You often see all sorts of things in contracts that neither party honestly cares about, just to cover all their bases in case something goes bad.
3. Corporations Care About Results: In practical terms, most businesses could care less how you spend the money they give you, so long as they get the products/results they're paying for. Even if your advisor took their money, put it in a ditch, and burned it, but the work got done? (shrug) Why would they make a scene about it? Contrast against the NSF, which would probably audit the heck out of you if they found out $20 in a $2m grant went to pay for a stapler that wasn't itemized in the proposal.

In short, it's immoral only when the sponsor would care about it. It is only illegal if it violates the contract (and even then, it's more of a "breach of contract" issue). Those two issues are not necessarily connected. In either of those cases, most corporations don't care so long as the work got done. These issues are very different than for governmental sponsors, which are very picky about personnel on projects, work-in-kind, or any other issues where they're paying people to do different work. Federal contracts also get into real legal issues (e.g., federal laws) as opposed to more general corporate contracts.

Some notes on other issues:

• PI: Being the main person on an IRB has nothing to do with being PI. PI is a financial role and a legal role, primarily. I was involved with a larger project recently, which had 3 IRB's in place (one by myself, two by others). The PI on the project was not the lead of any of the 3 IRB's. It's not uncommon at all.
• Different Pay: The advisor might indeed just value the other person more than you. I've seen this a lot in multi-disciplinary projects (e.g., CS students paid 50% more than Psyc). Or, alternatively, they may be unable to provide supplemental funding to you when the department covers you (and likewise unable to shift that student to departmental funding).

Either way, I wouldn't worry all that much about different pay unless you think it will also be reflected in your advisor's letters of recommendation. After all, as a grad student, you're not making much money either way: the payoff is in the next stage. However, I'd still check on it.

You might want to talk to them and say, "I am feeling like that I'm doing my work well but somehow not meeting the bar at this lab. For example, I see that other students at the same level are being paid twice as much. What can I do to reach a higher level?" That puts them in the position of laying out a pathway where you get honest feedback about your skills to work on and that might also lead to higher stipends down the road.