On results of investigation and preventive measures concerning the inappropriate handling of procurement accounting at KEK as reported earlier

October 10, 2014

High Energy Accelerator Research Organization

We have reported on June 17, 2014 that some of the procurement accounting at High Energy Accelerator Research Organization (KEK) had been inappropriately handled in JFY2013, i.e. payments to contractors were done for some contracts in full, although not all the items to be procured were fully delivered on schedule within the fiscal year. Since then, the final report by the Investigation Committee was submitted to the Director General with the finding as follows: (1) No cases were found for fictitious orders or illegal deposit payments to the contractors; (2) However, 42 cases of contract items (the total payment sum is JPY 1,886,476,725) were found to be with "deliveries which missed the intended fiscal year", which means that the deliveries are done past the due fiscal year without following appropriate procedures. Details are available in the attached final report(Japanses only) by the investigation Comittee.

Also, in re-examining the record over the past seven fiscal years, we found one case (the payment was JPY 2,997,750 ) in JFY 2009 where the delivery partially missed the intended fiscal year.

We are taking this matter quite seriously, since our research activities are supported by public fund and we must comply the relevant laws, regulations and rules that are set forth by the funding agencies and the laboratory. Incidents like these would jeopardize the confidence and expectations extended by the society to KEK.

Thus we are reporting that on the basis of the report by the Investigation Committee, KEK has decided to give stern warning to staff members, and the Director General would voluntarily return 10% of his salaries for two months and the Executive Director on financial matter would voluntarily return 10% of his salaries for one month for their management responsibilities.

The KEK also set up an Expert Committee which consist of five external experts in July 2014 and asked consultation on possible preventive measures to take against recurrence of similar incidents. Their report is attached(japanese only). With their valued inputs KEK will be taking the following actions:

1. Reform of staff awareness on their responsibilities and legal compliance
　 Clarification of the oversight responsibilities of the directors and other managerial members of
institutes and laboratories, and other relevant actions.
2. Improvement of procurement procedures followed by staff members
　 Introduction of active involvement by laboratory management and the financial department of KEK,
and other relevant actions.
3. Improvement of delivery confirmation
　 Introduction of more specific and clarified procedures to follow.
4. Enhancement of laboratory asset management
　 Introduction of enhanced internal procedures to follow for off-site repair work of laboratory equipment.
5. Improvement of laboratory internal auditing
　 Execution of laboratory internal auditing of on-going contracts, in addition to reviews of activities in
the previous fiscal years.

In recognition of our mission to provide the researchers from both domestic and international scientific communities with various research facilities as a major base laboratory for accelerator-based sciences in Japan, we intend to expeditiously implement the preventive measures outlined above and strive to restore the trust and confidence by the society at large. It is our intention to continually follow-up on the effects of the actions above and to improve our compliance culture and practice.

Atsuto Suzuki, Director General