ETS Pays Up to Settle Allegations of Improper Billing

(ETS), which is headquartered in Lawrence Township, has paid $1.4 million to resolve allegations that it improperly billed the U.S. Department of Education on government contracts, U.S. Attorney Paul J. Fishman announced Wednesday (May 25).

Fishman, in a press release, said the nonprofit company provides assessment and research-related services to the Department of Education under government contracts. Under those contracts, he said, the Department of Education reimburses ETS for costs of performance, including allowable medical benefits costs.

“In the 1990s, ETS established a retiree medical trust. During the years that ETS funded the trust, it was permitted to charge the Department of Education for retiree medical benefit costs. After ETS stopped funding the trust in 1999, the government asserts that government contracting rules prohibited ETS from including those costs in its invoices to the Department of Education,” the press release read.

The settlement announced Wednesday resolves allegations that “ETS violated those rules by continuing to bill the Department of Education for retiree medical benefit costs after ETS stopped funding the retiree medical trust.”

The press release continued: “ETS disclosed the improper charges to the Department of Education in 2007, reimbursed the Department of Education, with interest, in the amount of the alleged overcharges, and cooperated with the government’s investigation. The $1.4 million settlement agreed to by ETS is in addition to nearly $3.2 million in reimbursement and interest payments.”

Fishman credited special agents of the New York Office of the Department of Education’s Office of Inspector General (OIG), under the direction of Brian Hickey, special agent in charge of the Northeast Region, for their investigation of the matter.

 “It is our job to protect taxpayers from contractors who charge more than they should. Companies who cooperate with the government make it easier for everyone involved to ensure the American people get a fair deal,” Fishman said.

“This case demonstrates the importance of contract monitoring,” said Kathleen Tighe, inspector general of the U.S. Department of Education. “It also exemplifies the value of OIG in auditing and investigating government contracts and recovering money obtained pursuant to improper billing.”

A copy of the settlement agreement can be viewed from the PDF box above.