# Presentation: 410956

- Peggy Fischer, Ph.D.
- Associate Inspector General, Investigations
- Office of Inspector General, National Science Foundation

**Effective Compliance Programs:**
**Creating Integrity in the Research Environment**

- SRA International
- SRA 2006 Annual Meeting
- Québec City, Canada
- Monday, October 16, 2006

##       The Partnership

**National Science Foundation**
- Program Officers
- Grants Officers
- OIG
**Institution Officials**
- Administrative
- Financial
- Education
**Researchers**
- Students
- Colleagues
- Postdocs
- Administration

## Expectations

**NSF**
- Clear articulation of rules/expectations
- Balance compliance, institution responsibility and latitude, reduction of bureaucracy
- Numerous funding opportunities
**Institution**
- An environment in which employees can operate with integrity
- Responsible administrative, financial, and research management and oversight (e.g. Article 1, GC-1)
**Investigators**
_**Overall -- Uphold ethics and standards of community**_
- Submit quality proposals and conduct the funded activity
- Know and adhere to rules, regulations and ethics
- Ensure compliance and education of staff, students

## NSF’s Requirements

- The **awardee has full responsibility** for the conduct of the project or activity supported under this award and for adherence to the award conditions.  Although the awardee is encouraged to seek the advice and opinion of NSF on special problems that may arise, such advice does not diminish the awardee’s responsibility **for making** **sound**** ****scientific and administrative judgements** and should not imply that the responsibility for operating decisions has shifted to NSF.
- By accepting this award, the awardee agrees to **comply with the applicable Federal requirements** for grants and cooperative agreements and to the **prudent management** of all expenditure and actions affecting the award.
- 		Reference:     NSF’s Grant General Conditions, Article 1.

## Why am I here?

**Offices of Inspector General**
-   Provide leadership and coordination to implement policies to:
-   Prevent and detect fraud, waste, abuse
-   Promote economy, efficiency, effectiveness
-   Conduct investigations, audits, inspections, reviews of agency
-     programs (funded activities), operations
**Features:**
-   Independent of agency management
-   Jurisdiction (NSF activities, programs, operations)
-   Staff of experts:  administrators, attorneys, auditors,
-     criminal investigators, and scientists
- Responsible for ensuring the integrity in NSF’s programs and operations

## What IS a Compliance Program?

- Federal Sentencing Guidelines for Institutions
- HHS Integrity Agreements in Medicare
- HHS Guidance
- Council on Government Relations Guidance
- University Programs
- Sarbanes Oxley

## Why Have a Compliance Program?

- The Antithesis of the Rationale:
- Too expensive
- Not enough staff
- Hard to organize
- No authority
- No need
- Too much trouble
- See slide 18 .... **Consequences**

## Effective Compliance Program Elements* a/k/a     7 HABITS OF EFFECTIVE ORGANIZATIONS 

- Reasonable Compliance Standards and Procedures
- Specific High-level Personnel Responsible
- Due Care in Assignments with Substantial Discretionary Authority
- Effective Communication of Standards and Procedures
- Establish Monitoring and Auditing Systems **and** Reporting System (whistleblowing without fear of retaliation)
- Consistent Enforcement of Standards through Appropriate Mechanisms (including failure to detect)
- Respond Appropriately to the Offense (reporting to law enforcement, modify program, prevention)
- *Federal Sentencing Guidelines
- U.S.S.G. §§ 8B2.1, 8C2.5(f), & 8D1.4(c)(1) (11/1/04)

## Risk and How to Find It

- Auditors
- Squeaky Wheels
- Whistleblowers
- Investigators
- _ARE_ your friends

## Finding Risk

- What needs more review?
- Where’s your itch?
- What’s autonomous?
- Where’s the black hole?
- Are your warning bells ringing madly when you hear someone else’s problems?
- What gives you that “Gosh, gotta check _that_!” feeling?

## What do you look like?

- Funding Characteristics
- Grants, contracts and with what entity
- Organizational Profile
- Decentralized
- Control Profile
- Rainmakers, President, staff
- Audit Profile
- How easily can you get down into the weeds?
- Activities Location
- On-site, off-site, another country, LTER, SBIR, SGER
- Activity Description
- Animals, humans, collection, collaboration, toxins, radiation, equipment
- Staffing Characteristics
- Junior, independent, “senior and wise”
- Training Profile
- Comprehensive administrative, financial, oversight, fit the issues

##    One University’s Risk AssessmentHeat Map

-    *One University’s Risk Assessment*Heat Map

**IMPACT**

- High

- Moderate

- Low

- Moderate

- High

- Low

_**Auxiliary Services**_

_**Deferred **_
_**Maintenance**_

_**Technology Licensing**_

_**Off-Campus Facilities**_

_**Privacy of **_
_**Information**_

_**Human **_
_**Resource **_
_**Management**_

_**Construction Management**_

_**Endowment**_

_**Contracts & Grants **_
_**Management**_

_**Property Management**_

_**Financial Reporting**_

**  ****PROBABILITY**

**Acquisition**

_**Environmental, Health & Safety**_

_**Immigration & Visa Processing**_

_**Executive Benefits**_

_**Security**_

_**Human Subjects**_

_**Student Affairs**_

_**Animal Subjects**_

_**Gifts & Restricted Funds**_

## Risk Areas

- Allowable activities supported
- Allowable costs and cost principles
- Cash management
- Eligibility for awards
- Equipment and real property management
- Period of availability of funds
- Procurement suspension and debarment
- Program income
- Participant support
- Timely required reporting
- Special tests and provisions
- Holding accounts
- Summer salaries

## Other Risk Areas

- Lack of adequate documentation
- travel documentation
- cost-sharing
- records retention
- credit card receipts do not constitute adequate documentation
- Time and effort reporting and procedures
- Separate financial administration for each award, no pooling
- Abuse or violations of institutional conflict of interest disclosure policies and procedures.
- Updated/adequate RM policies and procedures
- Subawardee monitoring (and A-133s)
- Residual funds
- Oversight activities (Conflict of Interest, Humans, Animals)

## Ethical Issues Your Researchers WILL confront

- Data Selection
- Sharing and Using Ideas
- Balancing Priorities
- Making Financial Decisions
- Authorship and Acknowledgements
- Collaborations
- Conflicts of Interest
- Paraphrasing and Plagiarism
- Mentorship/Advisor Problems
- Merit Review
- Obtaining Oversight Reviews

-     The Magic Bullet Does _NOT_ exist.

## Tailor your program: Where are your risks?

## Consequences of Significant Errors

-    Special Oversight/Review Status
-    Administrative Sanctions
-    Suspension or Termination of Awards
-    Civil/Criminal Violations
-    Suspension/Debarment/Exclusion
-    Corrective Action Plans
-    Compliance Plans
-    Fines, Penalties
-    Exceptional Status
- May apply to either individual or entire institution

## Slide 19

## Slide 20

## Slide 21

## *Includes mail fraud, false identification insurance fraud, impersonating a government officer, and      copyright infringement. 

- *Includes mail fraud, false identification insurance fraud, impersonating a government officer, and      copyright infringement.
- Data gathered from NSF OIG closed Investigative files (1990 – Present).

## * Allegation was preliminarily investigated but found to be insufficiently material to warrant further action.

- ** Includes monitoring, enacting new guidelines, letters of reprimand, etc.
- Data gathered from NSF OIG closed Investigative files (1990 – Present).

## Common Types of Administrative Allegations

## Trends (x=year, y= relative increase, base year 1995)

## Trends (x=year, y= relative increase, base year 1995)

- When you start looking, you can find interesting things!

## Government Imposed Compliance Plans

- $15 M; overcharging IDC
- $30 M, exceptional status and oversight program; misuse of federal grant funds
- $12 M; overbilling
- $650,000; research fraud and abuse
- $1.5 M, 5-year compliance program; cost-sharing
- $1.2 M; inflated research grant costs
- $150,000, 5-year compliance program; misuse of federal funds
- $2.5 M, 5-year compliance program; cost-sharing, salaries, double charging
- $6.5 M, increased oversight; mischarging awards
- $3.4 M, 5-year compliance program; misuse of federal funds

## Developing Effective Compliance Programs requires tough choices and firm decisions

- A well-structured compliance program can reduce your risk and guide your decisions

## References

- http://oig.hhs.gov/fraud/complianceguidance.html
- http://www.nacua.org/documents/FedSentencingGuidelines.pdf
- http://www.ussc.gov/corp/Murphy1.pdf
- http://www.usdoj.gov/dag/cftf/corporate_guidelines.html
- http://ethicspoint.sitestream.com/Webinar%20fulfillment/VickyNemersonMarch2005/EthicsPoint_FSG%20Whitepaper-Feb05.pdf
- Grant, G. Odell, G., and Forrester, R; _Creating Effective Research Compliance Programs in Academic Institutions_; **Academic Medicine**, Vol 74, No. 9, September 1999, p. 951.
- Jordan, K.S.; and Murphy, J.E.; _Compliance Programs:  What the Government Really Wants._  Page 121.
- A variety of University web sites
- Managing Externally funded Research Programs; A Guide to Effective Management Practices; Council on Government Relations, June 2005
- DHHS Draft OIG Compliance Program Guidance for Recipients of PHS Research Awards; Fed. Reg. Monday Nov 28, 2005, vol. 70#227, p:71312

## INTEGRITY STARTS WITH YOU!

- If you are aware of, or suspect
-  research misconduct
-  fraud
-  waste
-  abuse
- Issues of economy or efficiencyor if you just have questions,Please contact the**NSF Office of Inspector General**** **

## Contact Information

- Internet:		http://www.nsf.gov/oig/
- E-mail:		oig@nsf.gov
- Telephone:  	703-292-4889 (Peggy)
- Anonymous:	1-800-428-2189
- Write:		4201 Wilson Blvd. Suite II-705
- 				Arlington, VA  22230