USC Told to Repay Funds for Program

Times Staff Writer

Federal auditors are calling for USC to pay back more than $1 million in government funds because of the university’s lapses in managing a program to train HIV/AIDS counselors for minority communities.

USC’s program was shut down by federal officials in 2001 in response to concerns about conflict of interest, improper research procedures and misuse of federal funds.

The resulting audit, released this week, uncovered further evidence of those problems and said the program failed in its goal of training HIV/AIDS counselors, or “peer treatment educators.”


USC, which brought some of the problems to the government’s attention, acknowledged making mistakes and said it had followed recommendations from regulators to overhaul its practices.

The university, however, is challenging auditors’ recommendation to repay or forfeit $1.08 million of the $1.27 million in federal funds spent on the effort. While agreeing that some of the university’s expenses should be disallowed, USC said other costs have already been federally approved. In addition, USC said it sought to end the program after one year but agreed to keep running it at the request of its federal partners in the initiative.

One of the major flaws cited by auditors with the U.S. Department of Health and Human Services was the university’s failure to resolve a conflict of interest involving a official hired by USC to run the project.

That official, identified by the university as Phill Wilson, managed the effort for USC while he also headed an AIDS awareness organization that was a subcontractor to the program, the auditors found.

According to the audit, part of the allegedly unauthorized spending charged to the government involved money that was improperly diverted to unrelated activities of Wilson’s nonprofit organization, the African American AIDS Policy and Training Institute.

In other cases, the auditors found that padded or inadequately documented expense claims were submitted for such things as wages, travel, consulting services, public relations, and Internet and video services.


No referral has been made for a criminal investigation, according to Donald White, a spokesman for Health and Human Services’ Office of Inspector General, which conducted the audit.

Wilson, 48, was hired by USC to manage the program and left the university’s payroll when the effort was shut down. He is now director of a Los Angeles-based AIDS charity, the Black AIDS Institute, which he described as a successor to the African American AIDS Policy and Training Institute.

Although Wilson resigned as executive director of the African American AIDS Policy and Training Institute apparently in response to conflict-of-interest concerns, the audit found that, in fact, he continued to manage the organization.

The auditors contended that the apparent conflict of interest opened the door for money to be diverted to other activities of Wilson’s organization. Those included soliciting sponsors for an AIDS march and conducting town hall meetings in various states to spur political action related to HIV issues. Wilson’s organization claimed $501,000 in expenses, about 40% of the total.

When reached by The Times, Wilson said he could not comment on the audit because he had not read it. After being e-mailed a copy of the report, he failed to return follow-up phone calls seeking his response.

The audit indicates that another large part of the questionable $1.08 million in spending was deemed unauthorized because of the program operators’ failure to have participants sign the appropriate informed-consent forms meeting USC and federal requirements.


The forms, the audit said, were required because the 41 first-year participants being trained as HIV/AIDS counselors, many of whom were infected with the virus, were asked various research questions related to their health and sexual behavior. Informed-consent forms are intended to protect the privacy and well-being of people who serve as research subjects.

Auditors said the participants signed consent forms, but not the ones approved by USC’s institutional research board, which supervises research involving human subjects. As a result, the board never authorized the program’s research.

The audit also said the research continued because Wilson -- whose formal title on the project was co-principal investigator -- disagreed with the campus research board’s position that the participants were research subjects protected by the university policy. The report found that Wilson was “not an experienced researcher,” but that after being hired by USC, he proceeded to “contact, recruit, enroll, test and gather information from the peer treatment educators.”

White said the case was being referred for further review to the U.S. Health Resources and Services Administration, which was USC’s partner in the program, and the Office for Human Research Protections, another unit in the Health and Human Services Department.

USC, meanwhile, plans to appeal to the Health Resources and Services Administration to reduce the sum it will need to pay the federal government.

“We’ve acknowledged some culpability here; we’ve acknowledged that we made some mistakes. It’s just a question of the amount that’s due,” said Laura L. LaCorte, senior associate vice president in the office of compliance at USC.


“We really had tried to take some proactive steps in this case, and I think successfully did. The person responsible is no longer here,” she added, referring to Wilson.