Managing a College or University is, in many ways, like managing a small city. An increasingly expanding range of federal, state, and local regulations govern Colleges and Universities and they are currently facing an all-time high of governmental enforcement actions, as well as significant media attention when issues of non-compliance arise.
While it is important to acknowledge the role that regulations serve to ensure institutional accountability, it is impossible to overlook the costs, burdens, and pressures that such regulations place on Colleges and Universities as they strive to implement, monitor, and improve institutional compliance programs. Now more than ever, Colleges and Universities must manage countless compliance obligations, without losing focus of the individual institution’s vision, mission, and values. Developing, implementing, and maintaining an effective and current compliance program has become a requirement rather than a best practice option for all Colleges and Universities.
It is incumbent upon a College or University’s key stakeholders to provide ethical leadership to the organization and to assure that adequate systems are in place to facilitate ethical and legal conduct. A compliance program sends an important message to the College and University community that while the institution recognizes that mistakes will occur, there is an affirmative, ethical duty to come forward and report erroneous or fraudulent conduct, so that it may be corrected. Superficial programs that simply purport to comply with the elements discussed below or programs that are hastily constructed and implemented without appropriate ongoing monitoring will likely be ineffective. A compliance program should become part of the fabric of routine operations and a culture of compliance should be recognizable internally and externally throughout the institution.
The Office of Inspector General (OIG) believes that a basic framework for any voluntary compliance program begins with a review of the seven basic elements of an effective compliance program. It is the responsibility of the institution to mold the concepts contained within the seven elements of a compliance program to its individual culture, and institute a program that monitors the individual elements so as to assure ongoing program effectiveness. A review of these elements below provides the basic components of a fully developed and implemented compliance program:
1. Written Policies and Procedures
2. Compliance Program Oversight
3. Compliance Education and Training
4. Effective, Confidential Communication
5. Enforcement Of Compliance Standards (Discipline)
6. Internal Auditing and Monitoring
7. Detection, Resolution, and Response
1. Written Policies and Procedures
The College or University should implement compliance standards through the development of written standards of
conduct and policies and procedures that promote the institution’s commitment to compliance.
Every compliance program should require the development and distribution of written compliance policies, standards, and practices that identify specific areas of risk to the College or University.
2. Compliance Program Oversight
The College or University should designate a compliance officer to oversee and assure that compliance efforts are carried out and standards are enforced. Typically, a high-ranking individual within the institution should be designated to serve as the focal person for compliance activities. This responsibility may be the individual’s sole duty or added to other management responsibilities, depending upon the size and complexity of the College or University.
3. Compliance Education and Training
Training and education on the compliance program, standards, and policies and procedures should be regular and ongoing within the College or University. As part of a compliance program, Colleges and Universities should require personnel to attend specific training on a periodic basis, including appropriate training in federal and state regulations, guidelines, and corporate ethics. Sessions should emphasize the commitment to compliance with these legal requirements and internal policy and procedure.
4. Effective, Confidential Communication
A College or University must have a means to report instances of non-compliance, suspected non-compliance and/or issues and concerns. There should be no fear of retribution for good faith reporting of issues and concerns.
5. Enforcement of Compliance Standards
A College or University may wish to incorporate measures that ensure that employees understand the consequences if they behave in a noncompliant fashion. An effective compliance program includes procedures for enforcing and disciplining individuals who violate compliance standards or fail to report non-compliance. Enforcement and disciplinary provisions are necessary to add credibility and integrity to the program.
6. Internal Auditing and Monitoring
Institutions must develop methods with which to assess risk. This is accomplished through conducting internal auditing and monitoring through the performance of periodic compliance audits.
7. Detection, Resolution, and Response
Upon identification of an issue of non-compliance or suspected non-compliance the College or University must respond appropriately to detected violations through the investigation of allegations as well as implementing systems to prevent continued non-compliance.
It is critical for every College or University to evaluate the effectiveness of its compliance program on a regular basis. During this evaluation process, the College or University should be sure to examine emerging compliance challenges as well as address national policy developments and activities relating to regulatory initiatives and government enforcement activities. The College or University should keep in mind that its compliance program related to the seven elements outlined above should also be scalable, affordable, feasible, and enforceable to the institution. Not all compliance programs can be, nor should they be, the same for each institution.
Paul Mayer is a principal based out of our Rochester, NY office.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
