Last year, I wrote a proposal for DFG, a German body funding, with my colleague and we got money to hire 3 PhD students in my side, and other 2 in my colleague's side in another University. In the proposal, I had used some not very well-known mathematical methods to derive some results related to chemistry which was the main goal of proposal. Now, one of my PhD students has reported me to the University authorities for plagiarism. My question is: How serious is the situation? Can they sack me for just not citing the methods that I have used? Can I call the granting body for correction and refining the proposal and updating the citations?

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I had learned about these methods in some posters presented in a conference several years ago. But I had no clue that these papers are published and are available on the internet. (These methods are vital to obtain the main results of my proposal.)

EDIT

Also, does any one know how these matters are handled in Germany? In my home country, in South America, it's much more relaxed.