The Ethics of Misappropriation

Here's an interesting ethical question that came up a few times in my past. Suppose you are working with an organization that is operating under government funding, and you discover that the work they are doing is not the work their grant application (and subsequent award) specified; they have, in effect, misappropriated the funding for an unauthorized purpose -- which includes paying you. Let us further suppose that the work you are doing is having a real benefit in the community you serve; the management team has made the substitution because they genuinely believe that the service they are providing is more important than the one they had originally proposed. You point out that they are still violating Federal and State laws, but they tell you to just get on with the job; they will worry about the consequences. What are you going to do?

On the one hand, it's not as if the management team is spending the funds on yachts and luxury cars (which has also happened in recent years); they're making a genuine attempt to provide what their constituents actually need. Government funding programs are often oriented more toward political expediency than toward actual community needs, and it is possible that this is the only way this particular need will ever be addressed. If the population receiving services under the misappropriated funds is traditionally underserved, this may indeed be the only way they will ever receive such assistance...

On the other hand, misappropriation of government funds is against the law; depending on the terms of the contract and the agencies involved, the senior management team may just have committed a criminal offense, and as a law-abiding citizen, you have a civic duty to report them for doing so, even though doing so might deprive a deserving community of services it desperately needs, divert those same funds to some pork-barrel project that will materially benefit political patrons of whoever extended the money in the first place, and eliminate a job that you need in order to buy food and pay your rent...

What are you going to do? The obvious thing to do here is for the agency that received the funds to make contact with their grant officer and request permission to change the primary activities authorized under the contract. If they can demonstrate that their revised purpose is a better use of the funds (and has the same levels of political advantage) the grantor will probably authorize the change, particularly because no one want to be displayed in the media yanking back funds that are being used to make a real difference in the lives of deserving people. But if you are not a member of the management team (or, even worse, if you're a contractor working for the agency) you can't take such an action, and you probably can't force the senior managers to do so either...

I don't have any concrete suggestions for this situation; if you've pointed out the potential legal issues to the management team and offered to help them with the appeal to change the purpose of the program, and they're still insisting on staying the course, you're just going to have to vote your conscience. In the long run it probably is more important that the right things get done, even for the wrong reasons, but this situation is a slippery slope, and it's just one step from using public funds for something you think benefits the community more to using those funds for something that benefits YOU more. One quite small step, in fact. But does that mean you should be the one to report someone who is doing what he thinks is the right thing to the authorities, or would it be better to just quitely resign and slink away?

It's worth thinking about...