Research Compliance Structures: Assessing the Effectiveness of Your Institution s Program

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YOUR MISSION

|

OUR SOLUTIONS

Research Compliance Structures: Assessing the

Effectiveness of Your Institution’s Program

2014 Research Services Summer Webinar Series

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Agenda

• Current research compliance environment

• Effective structures and programs

• Sample models for compliance

• Compliance focus topics

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Today’s Speakers

Anne Sullivan

Senior Director

Huron Consulting Group

[email protected]

(312) 804-7620

Leah Guidry

Managing Director

Huron Consulting Group

[email protected]

(202) 250-4679

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Current Research Compliance Environment

PERSPECTIVE ON THE CURRENT INDUSTRY LANDSCAPE

• Research compliance impacts:

–

Academic Medical Centers

–

Cancer Centers

–

Healthcare Systems with Research

–

Research Institutes

–

Universities

• General themes in today’s landscape:

–

Relative youth of research compliance in university settings

–

Tendency to conflate operational structures with research compliance

(e.g., IRB, IACUC, Sponsored Programs)

–

Need for independent, objective

oversight

of all of the research

functions

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Current Research Compliance Environment

PERSPECTIVE ON THE CURRENT INDUSTRY LANDSCAPE

• The research administration environment grows increasingly complex

with changing regulations, inconsistencies among agencies, lack of

information (meaningful and timely reports), thus generating more risk

than institutions recognize.

• There remains a vast disconnect between:

• The award environment, during which the funding agency and the PI focus

primarily on the research itself

• The degree of flexibility that is perceived to exist while the research is being

conducted

• The audit environment when an award is closed and subsequent audits take

place

• Current environment will likely place increased emphasis on

accountability during a time when many institutions are faced with

significant financial pressures and pressures to reduce staff.

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Current Research Compliance Environment

COMPLEXITY AND DIVERSITY

Complexity is found in research and fiscal areas and in the diversity of constituents:

• Genomics

• Stem cell research

• Clinical trials

• Technology transfer

• Faculty owned start-ups

• University equity interests

• Conflict of interest

• International collaborations

• Interdisciplinary research

• Subcontracts

• Human subject protections

• Electronic payment

• Grants.gov

• Cost accounting standards

• Investigators, research assistants, staff,

technicians

• Students, grad students, parents of

students

• Board members, taxpayers

• Federal agencies, external auditors

• Suppliers, donors, corporate sponsors,

investors

• Human subjects, advocacy groups

(PETA, etc.)

• University administration, college and

departmental administration

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Current Research Compliance Environment

REGULATORY ENVIRONMENT

Regulatory Trends:

• Recoveries from federal investigations/audits are

significant and receivables resulting from penalties

increased in recent years.

• In FY 2013, OIG reported $5.8 billion in financial

penalties resulting from federal audits and

investigations consisting of:

• $850 million in audit receivables

• $5 billion in investigative receivables

• Additionally, in the first half of FY 2013, the number

of annual criminal actions against individuals or

entities totaled 960 and 472 civil actions.

• These civil actions include false claims, civil

monetary penalties, and administrative

recoveries.

$3.2

$4.0

$3.8

$4.6

$6.9

$5.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

2008

2009

2010

2011

2012

2013

Rece

iva

bles

in

Billio

ns

Fiscal Year

Investigative Receivables by Fiscal Year

Source: Department of Health and Human Services Office of the Inspector General Semiannual Report to Congress 2013 http://oig.hhs.gov/reports-and-publications/archives/semiannual/2013/SAR-F13-OS.pdf

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Current Research Compliance Environment

CONSEQUENCES OF NON-COMPLIANCE

• Exceptional status of awards

• Suspension/termination of award

• Special terms and conditions of award

• Greatly reduced flexibility in the management of federally provided

resources

• Negative publicity

• Large financial settlements

• Audit findings

• Disallowance of costs

• Significant difficulty negotiating F&A rates

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Current Research Compliance Environment

AREAS OF CURRENT COMPLIANCE EMPHASIS

Financial

Regulatory

Cost Transfers

Clinical Trial Billing

Cost Sharing

Direct Charging Practices

Effort Reporting

Equipment Claims

Extra Service Compensation

Financial Reporting

Other Support

Program Income Reporting

Recharge Centers

Unallowable Costs

Animal Subject Protections (IACUC)

Environmental Health & Safety

Human Subject Protections (IRB)

Export Controls

Conflicts of Interest

HIPAA Privacy Laws

Data Management

Invention Disclosures and Reporting

Responsible Conduct of Research

Scientific Misconduct

Scientific Overlap

This widespread, yet non-exhaustive, list of diverging fiscal and regulatory compliance issues

creates a complex charge for the research compliance program at an institution.

Sub-Recipient Monitoring

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Poll #1: Does your institution have a designated research

compliance program?

0

20

40

60

80

100

120 Yes, independent

program

Yes, part of

healthcare

compliance

No

No, but being

considered

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Effective Structures and Programs

BENEFITS OF AN EFFECTIVE COMPLIANCE PROGRAM

• A proactive approach to creating a compliance program will allow an

institution to

manage its compliance risk

without imposing

unnecessary constraints on the institution’s operations

• Strong compliance programs benefit research institutions by

reducing

the risk

of significant non-compliance

• Compliance programs

reduce the negative impact of having

non-compliance discovered

by regulators or funding agencies

• The

accountability, clarity, and information

requirements of a strong

compliance program are often beneficial in terms of institutional

management

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Effective Structures and Programs

KEY ELEMENTS OF EFFECTIVE COMPLIANCE PROGRAMS

In 2005, the DHHS Office of the Inspector General (OIG) issued a draft Compliance Guidance with

the following eight elements considered as necessary for a comprehensive compliance program*.

* for research awards from the National Institutes of Health (NIH) and other agencies of the US Public Health Service (PHS)

8 Elements

1. Compliance Leadership

2. Policies and Procedures

3. Training

4. Communication

5. Monitoring

6. Enforcement

7. Corrective Response

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Effective Structures and Programs

KEY ELEMENTS OF EFFECTIVE COMPLIANCE PROGRAMS

8 Elements

How Institutions Should Respond

• Compliance Leadership: Designating a compliance

officer and compliance oversight committees

• Policies and Procedures: Implementing written

policies and procedures that foster an institutional

commitment to stewardship and compliance

• Training: Conducting effective training and education

• Communication: Developing effective lines of

communication

• Monitoring: Conducting internal monitoring, quality

review, auditing, and assurance

• Enforcement: Enforcing standards through

well-publicized disciplinary guidelines

• Corrective Response: Responding promptly to

detected problems, undertaking corrective action, and

reporting to the appropriate agencies

• Roles and Responsibilities:

Defining roles and

responsibilities across the institution and assigning

oversight responsibility

• Adequate institutional and Board-level oversight of the

compliance function

• Designation of a compliance officer with appropriate

level of authority with direct access to the governing

body

• Explicit written policies, institutional codes of ethics and

conduct

• Training programs supported by leadership

• Adoption of adequate procedures, resources, and

systems to permit compliance

• Maintenance of a process to allow anonymous

reporting of alleged non-compliance

• Protection of employees who file reports

• Regular monitoring and quality review audits to test

compliance with mechanisms to enforce rules, take

corrective action and communicate results

• Clearly define roles for all personnel involved in

federally sponsored research

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Effective Structures and Programs

SIZE AND STRUCTURE

• Structure

– Define the scope of the research portfolio and the scope of the research

compliance program

o

Identify which compliance areas should have their own compliance infrastructure (financial and/or

regulatory)

o

Establish segregation or integration of health care compliance from research compliance

– Document roles and responsibilities delineating tasks and authority across

functional lines

o

For research programs with narrow scope or volume, define rules of engagement for referrals to

other related oversight areas

• Resources

– Develop tools to support the technical, financial and compliance operations

o

Trained and knowledgeable personnel regarding when to escalate issues

– Evaluate and make priority-based decisions on financial investment in research

and build an overall research strategy

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Effective Structures and Programs

ASSESSING YOUR COMPLIANCE ENVIRONMENT

What can institutions do to minimize their risk in each of these areas and

ensure they are doing everything they can to remain in compliance?

The right types of internal controls will help you and

your institution mitigate risk.

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

History and culture of the institution, barriers to change, mission and vision



Commitment of institution’s leadership to invest in improvement and “champion”

change initiatives



Effective mechanisms for internal controls across organizational units



Optimization of information flow within and between compliance, administration and

operating units



Staffing levels, roles, responsibilities & delegated authorities



Revamping policies & procedures



Training & education for compliance



Desired level of service and delivery of superior customer service while maintaining an

appropriate level of compliance



Coordinated and focused change by capitalizing on strengths and improving areas

needing attention

Effective Structures and Programs

ASSESSING YOUR COMPLIANCE ENVIRONMENT

Issues to Consider:

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Effective Structures and Programs

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Effective Structures and Programs

SCORECARD FOR COMPLIANCE (CONT.)

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Low

Centralization of Roles & Responsibilities

Oversight & Attention to Compliance Activities

Potential for COI

High

Dispersed

Concentrated

High

Low

Model 1: Decentralized

•Compliance functions may

exist but are embedded in the

local areas - defined by

organization – i.e., school,

department, etc.

•Roles & responsibilities

sometimes filled by

Administrators or assigned to

Deans or Directors in Schools

causing potential COI

•Tasks spread across

personnel

Model 2: Hybrid

• Compliance functions at

campus/school level who

have primary compliance

oversight and QA roles

• Oversight by an

institution-wide Compliance Officer

(Staffing in central office is

low)

• Local officers report to

central Compliance with

dotted line to executive

leadership at local level

Model 3: Centralized

• Central compliance

responsibility over activities of

campuses/schools

• Roles & responsibilities are

clear and focused

• Tasks concentrated in

personnel responsible for

broader terrain

Sample Models for Compliance

PROGRAM MODELS

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Decentralized

Centralized

Hybrid

S

T

R

E

N

G

T

H

S

• Traditional structure,

well-understood in higher

education

• Oversight by the areas that

are closely aligned with

primary functions/viewed as

“part of the team”

• Can ensure appropriate

controls and compliance as

its more closely connected w/

operations function

• Enables increased

communication

• Less possibility for duplication

of effort

• Strong leadership presence

that allows for consistency

across the University/system

• Clarity of role and tasks that

minimizes potential for COI

• Allows for customization for

the best ‘fit’

• Capitalizes on the ‘best of

both worlds’

W

E

A

K

N

E

S

E

S

• High possibility of COI and

role confusion

• Potential for gaps in

communication

• Potential for duplication in

efforts

• Potential for being viewed as

‘out of touch’ and/or playing

into the ‘us vs. them’

mentality

• Potential risk for compliance

issues not being escalated in

timely fashion – requires

heightened auditing and

monitoring

• Potential for less of a focus

on services and more of a

focus on compliance thus

being viewed as an outsider

• Potential risk for jurisdiction

and management conflicts

Sample Models for Compliance

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Sample Models for Compliance

SAMPLE KEY ELEMENT: COMPLIANCE LEADERSHIP

• No compliance officer or one that lacks a position of authority

• Compliance roles and responsibilities are separated among several individuals who

do not coordinate their activities

• Compliance officer is not supported by adequate number and diversification of staff

• Compliance Officer who has broad responsibility for compliance and reports directly

to leadership/governing authority

• Compliance Committee consisting of senior administration staff that support the

Compliance Officer

• Separation of responsibilities for different types of compliance – e.g. research

compliance versus health care compliance

Common oversights:

Best practices:

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A Comprehensive Research Compliance Office would:

• Raise campus awareness of research compliance and how/where to report issues or

suspected wrong-doing

• Elevate the crucial role of compliance monitoring/oversight

• Provide comprehensive, mandatory compliance training for PIs and staff while

monitoring the effectiveness of the training

• Increase operational efficiencies in research administration and lower institutional

research compliance risk

• Clarify roles and responsibilities for faculty and staff who undertake tasks and duties

that fall within the scope of research compliance

• Organize and consolidate the elements of effective compliance programs and bridge

compliance services more directly to participating faculty members

• Enable a higher degree of research compliance program evaluation, quality

assurance, training, and education for faculty and staff

Sample Models for Compliance

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Poll #2: If you have a research compliance program, where does

the office report?

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0

10

20

30

40

50

60

70 President

A VP

Provost or VP

for Academic

Affairs

Chief/Corporate

Compliance

Office

General Counsel Internal Audit

None of the

above

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Vice President for Research Responsible Conduct of Research Research Education and Training Financial Compliance Compliance Monitoring, QA/QR

Research Compliance Program

Development:

· Establish program and performance standards

· Clarify and communicate R&Rs

· Monitor national trends and regulations

· Establish University-wide policies outlined in compliance program

Facilitation & Faculty Support

· Amplify research subject advocacy

· Coordinate education and training opportunities

Quality Assurance & Review

· Conduct monitoring activities as defined in R&Rs

· Perform quality reviews

· Substantiate quality assurance

Associate Vice President for Research

Compliance Vice President for Health

Sciences

Senior Vice President for Finance

Conflict of Interest Compliance Oversight & Coordination

Research Subjects Protection

Provost and Vice President for Academic

Affairs

Sample Models for Compliance

This organizational structure consolidates oversight for research compliance

functions within a single office under the VPR:

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Sample Models for Compliance

DAY-TO-DAY OVERSIGHT

It is important to distinguish day-to-day

oversight

for research compliance versus day-to-day

operations. Depending on research volume and diversity, the responsible individuals for compliance