This part implements the Program Fraud Civil Remedies Act of 1986, 31 U.S.C. 3801-3812 (PFCRA). The PFCRA provides the National Endowment for the Humanities (NEH), and other Federal agencies, with an administrative remedy to impose civil penalties and assessments against persons who make, submit, or present, or cause to be made, submitted or presented, false, fictitious, or fraudulent claims or written statements to NEH. The PFCRA also provides due process protections to all persons who are subject to administrative proceedings under this part.

For the purposes of this part—

ALJ means an Administrative Law Judge in the authority appointed pursuant to 5 U.S.C. 3105 or detailed to the authority pursuant to 5 U.S.C. 3344.

Authority means the National Endowment for the Humanities (NEH).

Authority head means the NEH Chairperson or the Chairperson's designee.

Benefit means anything of value, including but not limited to any advantage, preference, privilege, license, permit, favorable decision, ruling, status or loan guarantee.

Claim means any request, demand or submission that a person makes—

(1) To the authority—

(i) For property, services, or money (including money representing grants, loans, insurance, or benefits); or

(ii) Which has the effect of decreasing an obligation to pay or account for property, services, or money; or

(2) To a recipient of property, services, or money from the authority or to a party to a contract with the authority—

(i) For property or services if the United States—

(A) Provided such property or services;

(B) Provided any portion of the funds for the purchase of such property or services; or

(C) Will reimburse such recipient or party for the purchase of such property or services; or

(ii) For the payment of money (including money representing grants, loans, insurance, or benefits) if the United States—

(A) Provided any portion of the money requested or demanded; or

(B) Will reimburse such recipient or party for any portion of the money paid on such request or demand.

Complaint means the administrative complaint that the reviewing official serves on the defendant under § 1174.8.

Defendant means any person alleged in a complaint to be liable for a civil penalty or assessment pursuant to the PFCRA.

Government means the United States Government.

Individual means a natural person.

Initial decision means the written decision of the ALJ under § 1174.33, and includes a revised initial decision issued following a remand or a motion for reconsideration.

Knows or has reason to know means that a person, with respect to a claim or statement—

(1) Has actual knowledge that the claim or statement is false, fictitious, or fraudulent;

(2) Acts in deliberate ignorance of the truth or falsity of the claim or statement; or

(3) Acts in reckless disregard of the truth or falsity of the claim or statement; and no proof of specific intent to defraud is required.

Makes shall include the terms presents, submits, and causes to be made, presented, or submitted. As the context requires, making or made shall likewise include the corresponding forms of such terms.

Person means any individual, partnership, corporation, association, or private organization, and includes the plural of that term.

Representative means an attorney who is in good standing of the bar of any State, Territory, or possession of the United States, or the District of Columbia, or the Commonwealth of Puerto Rico, or any other individual who the defendant designates in writing.

Reviewing official means the NEH General Counsel or the General Counsel's designee.

Statement means any representation, certification, affirmation, document, record, or accounting or bookkeeping entry that a person makes—

(1) With respect to a claim (or eligibility to make a claim) or to obtain the approval or payment of a claim; or

(2) With respect to (or with respect to eligibility for)—

(i) A contract with, or a bid or proposal for a contract with, or

(ii) A grant, loan, or benefit from, the authority, or any State, political subdivision of a State, or other party, if the United States Government provides any portion of the money or property under such contract or for such grant, loan, or benefit, or if the Government will reimburse such State, political subdivision, or party for any portion of the money or property under such contract or for such grant, loan, or benefit.

(a) Claims. (1) Any person shall be subject, in addition to any other remedy that may be prescribed by law, to a civil penalty of not more than $5,000 for each claim that person makes that the person knows or has reason to know—

(i) Is false, fictitious, or fraudulent;

(ii) Includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent;

(iii) Includes or is supported by any written statement that—

(A) Omits a material fact;

(B) Is false, fictitious, or fraudulent as a result of such omission; and

(C) Is a statement in which the person making such statement has a duty to include such material fact; or

(iv) Is for payment for the provision of property or services which the person has not provided as claimed.

(2) Each voucher, invoice, claim form, or other individual request or demand for property, services, or money constitutes a separate claim.

(3) A claim shall be considered made to the authority, recipient, or party when such a claim is actually made to an agent, fiscal intermediary, or other entity, including any State or political subdivision of a State, acting for or on behalf of the authority.

(4) Each claim for property, services, or money is subject to a civil penalty regardless of whether such property, services, or money is actually delivered or paid.

(5) If the Government has made any payment on a claim, a person subject to a civil penalty under paragraph (a)(1) of this section may also be subject to an assessment of not more than twice the amount of that claim or the portion thereof that violates paragraph (a)(1) of this section. Such assessment shall be in lieu of damages that the Government sustained because of such a claim.

(b) Statements. (1) Any person shall be subject, in addition to any other remedy prescribed by law, to a civil penalty of not more than $5,000 for each written statement that person makes that the person knows or has reason to know—

(i) Asserts a material fact which is false, fictitious or fraudulent; or

(ii) Is false, fictitious, or fraudulent because it omits a material fact that the person making the statement has a duty to include in such a statement; and

(iii) Contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the statement's contents.

(2) A person will only be subject to a civil penalty under paragraph (b)(1) of this section if the written statement made by the person contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the statement's contents.

(3) Each written representation, certification, or affirmation constitutes a separate statement.

(4) A statement shall be considered made to the authority when it is actually made to an agent, fiscal intermediary, or other entity, including any State or political subdivision of a State, acting for or on behalf of the authority.

(c) Proof of specific intent to defraud is not required to establish liability under this section.

(d) In any case in which more than one person is liable for making a false, fictitious, or fraudulent claim or statement under this section, each person may be held liable for a civil penalty and assessment.

(e) In any case in which more than one person is liable for making a claim under this section on which the Government has made payment, the authority may impose an assessment against any such person or jointly and severally against any combination of persons.

(f) Civil monetary penalty inflation adjustments. (1) The penalty amounts provided in table 1 to this paragraph (f) apply to violations of this section that occurred prior to December 31, 2023, with each row listing the penalty amounts for violations that occurred in a particular time frame.

(2) For claims or statements made on or after January 1, 2024, the maximum penalty which may be assessed under this section is the larger of:

(i) The amount for the previous calendar year; or

(ii) An amount adjusted for inflation, calculated by multiplying the amount for the previous calendar year by the percentage by which the Consumer Price Index for All Urban Consumers published by the Department of Labor (CPI-U) for the month of October preceding the current calendar year exceeds the CPI-U for the month of October of the calendar year two years prior to the current calendar year, adding that amount to the amount for the previous calendar year, and rounding the total to the nearest dollar.

(g) Notice of civil monetary penalty inflation adjustments on or after January 1, 2024. The authority will publish in the Federal Register notice of the maximum penalty amount which may be assessed under this section for calendar years after 2023 (calculated using the formula in paragraph (f)(2) of this section) on an annual basis on or before January 15 of each calendar year.