The Inspectors General are The Inspectors General are Coming !Coming !
Doonesbury, 3 December 2005
Ethics and the Public Sector: Achieving Ethical Conduct in the Research Environment
William J. KilgallinWilliam J. KilgallinHead, Investigative Legal and OutreachHead, Investigative Legal and OutreachOffice of the Inspector GeneralOffice of the Inspector GeneralNational Science FoundationNational Science Foundation
Clemson Presidential ColloquiumClemson Presidential Colloquium4 March 20084 March 2008
William J. KilgallinWilliam J. Kilgallin
Head, Investigative Legal and OutreachHead, Investigative Legal and Outreach
Office of the Inspector GeneralOffice of the Inspector General
National Science FoundationNational Science Foundation
Ethics and the Public Sector:Achieving Ethical Conduct
in the Research Environment
Presentation OutlinePresentation Outline
• Partners in Oversight of the Research Partners in Oversight of the Research EnvironmentEnvironment
• Missions, Responsibilities, and ExpectationsMissions, Responsibilities, and Expectations• Providing ProtectionProviding Protection• Examples of Misused FundsExamples of Misused Funds• The “Magic Bullet” ??The “Magic Bullet” ??• QuestionsQuestions
National Science National Science FoundationFoundation
•Created in 1950 by Harry TrumanCreated in 1950 by Harry Truman•Budget: about $6.0 Billion Budget: about $6.0 Billion •Funds scientific research/education, primarily Funds scientific research/education, primarily
grantsgrants•We “buy” science (pennies saved = another We “buy” science (pennies saved = another
grant)grant)•NSF provides 23% of the funding for basic NSF provides 23% of the funding for basic
research in America’s universities and colleges research in America’s universities and colleges •Over 1800 organizations (colleges, universities, Over 1800 organizations (colleges, universities,
school systems, nonprofit institutions, and small school systems, nonprofit institutions, and small businesses) receive NSF funding each yearbusinesses) receive NSF funding each year
•No labs or research facilitiesNo labs or research facilities
National Science FoundationNational Science Foundation
• 40,000 proposals competitively reviewed 40,000 proposals competitively reviewed each yeareach year
• Total awards funded each year: 20,000Total awards funded each year: 20,000• New awards funded each year: 11,000New awards funded each year: 11,000• Number of merit reviewers yearly: 50,000Number of merit reviewers yearly: 50,000• Number of reviews done each year: Number of reviews done each year:
250,000250,000
Partners in CompliancePartners in Compliance
• The Agency (National Science Foundation)The Agency (National Science Foundation)•Program Officers (science decisions)Program Officers (science decisions)•Grants Officers (business managers)Grants Officers (business managers)•Office of Inspector General (Oversight)Office of Inspector General (Oversight)
• Institution/University OfficialsInstitution/University Officials•Administrative officialsAdministrative officials•Financial (business managers)Financial (business managers)
• Research CommunityResearch Community•Professors (Principal Investigators), studentsProfessors (Principal Investigators), students•Post-doctorate researchersPost-doctorate researchers•Support staffSupport staff
NSF ResponsibilitiesNSF Responsibilities
• Provide funding opportunitiesProvide funding opportunities• Establish clear rules and expectationsEstablish clear rules and expectations• Make timely decisionsMake timely decisions• Monitor progress (both research and Monitor progress (both research and
funds)funds)• Coordinate with other government Coordinate with other government
agenciesagencies• Balance competing interestsBalance competing interests
• GovernmentGovernment• InstitutionInstitution• Researcher Researcher
NSF ResponsibilitiesNSF Responsibilities• Program OfficersProgram Officers
•Review proposalsReview proposals•Recommend awardsRecommend awards•Monitor research portfolioMonitor research portfolio•Conduct site visitsConduct site visits•Review Cost Share CertificationsReview Cost Share Certifications
• Grants OfficersGrants Officers•Provide award fundingProvide award funding•Review awardee systemsReview awardee systems•Monitor award financial activities / commitmentsMonitor award financial activities / commitments•Conduct site visits to assess internal controlsConduct site visits to assess internal controls•Designate “high risk” awards, awardeesDesignate “high risk” awards, awardees•Advance or special payment decisionsAdvance or special payment decisions
NSF ExpectationsNSF Expectations
• True statements to the Government in True statements to the Government in proposals and in reports (research and proposals and in reports (research and financial)financial)
• Performance of the funded work Performance of the funded work • Charge reasonable, allowable, verifiable costs Charge reasonable, allowable, verifiable costs • Monitor expenditures for appropriate useMonitor expenditures for appropriate use• Comply with all requirementsComply with all requirements• Hire qualified individualsHire qualified individuals• Ensure rules apply toEnsure rules apply to
•employees & affiliated researchersemployees & affiliated researchers•sub-contractors & suppliers sub-contractors & suppliers • international collaboratorsinternational collaborators
NSF OIG MissionNSF OIG Mission
• Prevent and detect fraud, waste, and abusePrevent and detect fraud, waste, and abuse• Promote economy, efficiency, and Promote economy, efficiency, and
effectiveness effectiveness
• Features: Features: • Independent of agency managementIndependent of agency management• Dual reporting requirementsDual reporting requirements
•CongressCongress•National Science BoardNational Science Board
• Specific jurisdiction (NSF programs and Specific jurisdiction (NSF programs and operations)operations)
• Cannot manage programs or make policyCannot manage programs or make policy
Source: The Inspector General Act of 1978, as amended, 5 U.S.C. AppendixSource: The Inspector General Act of 1978, as amended, 5 U.S.C. Appendix
What does NSF OIG What does NSF OIG investigate?investigate?
The simple answerThe simple answer
Allegations of:Allegations of:
LyingLying
CheatingCheating
StealingStealing
NSF OIG : Investigative NSF OIG : Investigative EffortsEfforts
• Respond to allegationsRespond to allegations• False statementsFalse statements• FraudFraud• Research misconductResearch misconduct
• Proactively review trends for potential fraudProactively review trends for potential fraud• Intensive outreach effort Intensive outreach effort • Results: Results:
• Recovered fundsRecovered funds• Settlement and compliance agreementsSettlement and compliance agreements• Suspension / debarmentSuspension / debarment• Assurances / certificationsAssurances / certifications• High-risk award / awardee designationHigh-risk award / awardee designation• PrisonPrison
NSF OIG: ToolsNSF OIG: Tools
• AuditsAudits• NSF financial statement NSF financial statement • Internal NSF performance auditsInternal NSF performance audits• External grant auditsExternal grant audits• Referrals to InvestigationsReferrals to Investigations
• InvestigationsInvestigations• Staff of scientists, investigators, auditors, and Staff of scientists, investigators, auditors, and
attorneysattorneys• Criminal, civil, and administrative casesCriminal, civil, and administrative cases• Proactive reviewsProactive reviews• Management implication reportsManagement implication reports• Referrals to AuditReferrals to Audit
• Inspections and evaluationsInspections and evaluations• Educational activitiesEducational activities
Office of InvestigationsOffice of Investigations
• OIG’s responsibilities include the detection OIG’s responsibilities include the detection and prevention of waste, fraud, and abuse and prevention of waste, fraud, and abuse involving NSF programs and operationsinvolving NSF programs and operations
• OIG investigations conducts civil, criminal, OIG investigations conducts civil, criminal, and administrative investigationsand administrative investigations
Sources of AllegationsSources of Allegations****
• Principal InvestigatorsPrincipal Investigators• NSF Program OfficersNSF Program Officers• Other NSF EmployeesOther NSF Employees• Review PanelistsReview Panelists• Government AgenciesGovernment Agencies
• Graduate StudentsGraduate Students• University University
AdministratorsAdministrators• ContractorsContractors• Anonymous Hotline Anonymous Hotline
Callers or InformantsCallers or Informants
** Anyone may confidentially contact OIG to report potential wrongdoing
Investigative ProcessInvestigative Process
• Conduct preliminary research; determine Conduct preliminary research; determine jurisdiction; identify issues; gather evidencejurisdiction; identify issues; gather evidence
• Objective investigation of substantive Objective investigation of substantive allegationsallegations
• As appropriate, refer to audit or other agency As appropriate, refer to audit or other agency OIGOIG
• Prepare written Report of InvestigationPrepare written Report of Investigation• Work with DoJ, NSF, and awardees to develop Work with DoJ, NSF, and awardees to develop
appropriate resolutions that protect the appropriate resolutions that protect the interests of the Federal government and the interests of the Federal government and the U.S. taxpayerU.S. taxpayer
ExpectationsExpectations• Of NSFOf NSF
• Clear articulation of rules / expectationsClear articulation of rules / expectations• Balance compliance, institution responsibility and latitude, Balance compliance, institution responsibility and latitude,
reduction of bureaucracyreduction of bureaucracy• Numerous funding opportunitiesNumerous funding opportunities
• Of Institution/UniversityOf Institution/University• An environment in which employees can operate with An environment in which employees can operate with
integrityintegrity• Responsible administrative, financial, and research Responsible administrative, financial, and research
management and oversight (e.g. Article 1, GC-1)management and oversight (e.g. Article 1, GC-1)
• Of InvestigatorsOf Investigators• Overall -- Uphold ethics and standards of communityOverall -- Uphold ethics and standards of community • Submit quality proposals and conduct the funded activity Submit quality proposals and conduct the funded activity • Know and adhere to rules, regulations, and ethicsKnow and adhere to rules, regulations, and ethics• Ensure compliance and education of staff, studentsEnsure compliance and education of staff, students
Institution/University Institution/University ResponsibilitiesResponsibilities
• Certify / ensure compliance with terms and Certify / ensure compliance with terms and conditionsconditions
• Maintain environment of integrityMaintain environment of integrity
• Effective financial and administrative systems Effective financial and administrative systems
• Ensure monitoring and oversight of programsEnsure monitoring and oversight of programs
• Charge reasonable, allowable, verifiable costsCharge reasonable, allowable, verifiable costs
• Act as conduit between researchers and funding Act as conduit between researchers and funding agencyagency
• Ensure education of future generations of Ensure education of future generations of researchersresearchers
Institution/Institution/University RoleUniversity Role
• Notify OIG Notify OIG • of allegations of wrongdoingof allegations of wrongdoing• of significant financial or administrative of significant financial or administrative
problemsproblems• of research misconduct issuesof research misconduct issues
• Take appropriate remedial actionsTake appropriate remedial actions
Institutional/University Role, Institutional/University Role, cont’dcont’d
• Report wrongdoing, financial or administrative Report wrongdoing, financial or administrative problemsproblems• Respond to request or subpoena for documentationRespond to request or subpoena for documentation• Provide financial recordsProvide financial records• Provide research recordsProvide research records• Provide internal auditsProvide internal audits• Permit interviews of employeesPermit interviews of employees
• Report research misconductReport research misconduct• Expect referral of the matter for investigationExpect referral of the matter for investigation• Permit interviews of employees Permit interviews of employees • Conduct any required institutional investigationConduct any required institutional investigation
Research Misconduct (RM)Research Misconduct (RM) Federal-wide definition and procedural framework. Federal-wide definition and procedural framework.
RM means RM means fabricationfabrication, , falsificationfalsification, or , or plagiarismplagiarism in in proposing or performing research, reviewing research proposing or performing research, reviewing research proposals or in reporting research funded by the proposals or in reporting research funded by the agency. 45 C.F.R. 689.1.aagency. 45 C.F.R. 689.1.a
Fabrication: making up data or results and recording or reporting them
Falsification: manipulating materials, equipment, or processes, or changing or omitting data or results
Plagiarism: appropriation of another person’s ideas, processes, results or words without giving appropriate credit.
Common Admin Allegations
16%
7%
2%
5%
3%
5%2%
2%2%
42%
6% 8%
Animal /Permit / Biohazard / Humans (2%)
Conflict of Interests (2%)
Data sharing (2%)
Fabrication (5%)
Falsification (16%)
Fraud (7%)
Impeding Research Progress (2%)
Abuse of Collegues/Students (5%)
Mishandled Investigations /Retaliation (4%)
NSF Procedures (8%)
Merit Review (6%)
Plagiarism (verbatim, Intellectual theft) (40%)
TrendsTrends (x=year, y= relative increase, base (x=year, y= relative increase, base year 1995)year 1995)
Total
0
1
2
3
4
95 96 97 98 99 00 01 02 03 04 05
Total FFP Allegations
00.5
11.5
22.5
33.5
95 96 97 98 99 00 01 02 03 04 05
Trends Trends (x=year, y= relative increase, (x=year, y= relative increase,
base year 1995)base year 1995)Plagiarism
0123456789
95 96 97 98 99 00 01 02 03 04 05
Plagiarism
Admin ConsequencesAdmin Consequences • ReprimandReprimand• Training or teaching Training or teaching • Additional oversightAdditional oversight• Certifications/Certifications/
AssurancesAssurances• DismissalDismissal
•Withdrawal of proposal(s)•Award Suspension/Termination •Suspension/Debarment•Exceptional Status •Disallowed costs
RM Case Examples from the NSF OIG RM Case Examples from the NSF OIG Semi-Annual Report to the CongressSemi-Annual Report to the Congress
Falsification, Fabrication, and Plagiarism Found in a Single Proposal Falsification, Fabrication, and Plagiarism Found in a Single Proposal (March 2005)(March 2005)
PI Ignores Warning to Remove Plagiarized Text From His Proposal PI Ignores Warning to Remove Plagiarized Text From His Proposal (March 2006)(March 2006)
PI’s Pattern of Plagiarism Continues PI’s Pattern of Plagiarism Continues During OIG Investigation of His During OIG Investigation of His Proposals (March 2006)Proposals (March 2006)
PI Provides False Evidence to RefutePI Provides False Evidence to RefuteAllegation of Plagiarism (March 2006)Allegation of Plagiarism (March 2006)
Plagiarism Found in University Plagiarism Found in University Professor’s Dissertation (March 2006)Professor’s Dissertation (March 2006)
More RM Case Examples . . .More RM Case Examples . . .
NSF Funded Postdoctoral Fellow Falsifies Research Data NSF Funded Postdoctoral Fellow Falsifies Research Data (September 2006)(September 2006)
Professor Reviews Proposal for NSF, Then Plagiarizes It Into His Professor Reviews Proposal for NSF, Then Plagiarizes It Into His Own Proposal (Sept 2007)Own Proposal (Sept 2007)
Professor Plagiarizes in Four Professor Plagiarizes in Four NSF Proposals (Sept 2007)NSF Proposals (Sept 2007)
Student Claims “Laziness” Caused Him Student Claims “Laziness” Caused Him to Fabricate/Falsify Data in Four Manuscripts to Fabricate/Falsify Data in Four Manuscripts (Sept 2007)(Sept 2007)
When Administrative cases turn Civil/Criminal . . .When Administrative cases turn Civil/Criminal . . .
Case 1: Plagiarizing the ThesisCase 1: Plagiarizing the Thesis
PI submitted his student’s thesis chapter as an PI submitted his student’s thesis chapter as an SBIR-1 proposal ($100K, 6 months) SBIR-1 proposal ($100K, 6 months) from a non-existent companyfrom a non-existent company
When awarded, PI used the money to When awarded, PI used the money to pay his child’s tuition at an ivy leaguepay his child’s tuition at an ivy leagueinstitution and other personal expensesinstitution and other personal expenses
PI copied the thesis into his final reportPI copied the thesis into his final reportand proposal for the SBIR-2 award ($500K)and proposal for the SBIR-2 award ($500K)
University notifies OIG of plagiarism allegationUniversity notifies OIG of plagiarism allegation PI denied everything PI denied everything
NSF suspended the award NSF suspended the award OIG issued subpoenas; reviewed records; OIG issued subpoenas; reviewed records;
presented the case to DoJpresented the case to DoJ DoJ accepted the case for prosecutionDoJ accepted the case for prosecution Professor pleaded guilty to a criminal count Professor pleaded guilty to a criminal count
(1001)(1001) Repaid NSF $240,000Repaid NSF $240,000 NSF OIG recommended RM finding and NSF OIG recommended RM finding and
debarment. debarment. 3 year debarment3 year debarment
When Administrative cases turn Civil/CriminalWhen Administrative cases turn Civil/Criminal . . . . . .Case 1: Plagiarizing the Thesis (cont.)Case 1: Plagiarizing the Thesis (cont.)
When Administrative cases turn Civil/Criminal . . .When Administrative cases turn Civil/Criminal . . .
Case 2: “No” Means “No”Case 2: “No” Means “No” PI asked for a second No Cost Extension on the AwardPI asked for a second No Cost Extension on the Award NSF program officer declined the request in FastLane, in NSF program officer declined the request in FastLane, in
writing, and by telephonewriting, and by telephone PI directed the finance officer to draw-down the award PI directed the finance officer to draw-down the award
balance of $32K although the costs had not been incurred balance of $32K although the costs had not been incurred OIG presented case to DoJ for prosecution.OIG presented case to DoJ for prosecution. DoJ settled case. DoJ settled case. $52K returned to NSF as restitution and investigative costs.$52K returned to NSF as restitution and investigative costs. Five-year Compliance Plan imposed.Five-year Compliance Plan imposed. PI debarred for five years. PI debarred for five years.
““NSF Proposes to Debar PI for Five Years” NSF Proposes to Debar PI for Five Years” (NSF OIG SA Sept 2007)(NSF OIG SA Sept 2007)
Other Civil and Criminal MisconductOther Civil and Criminal Misconduct
Over-Charging Grants results in $1.55M to NSF Over-Charging Grants results in $1.55M to NSF and imposed 4-year compliance agreementand imposed 4-year compliance agreement
False Certifications result in $1.4M to NSF and False Certifications result in $1.4M to NSF and imposed 5-year compliance agreementimposed 5-year compliance agreement
False Certifications result in $3M to NSF and False Certifications result in $3M to NSF and imposed 5-year compliance agreementimposed 5-year compliance agreement
31%
24%
20%
13%
9%3%
Theft/Embezzlement (31%)
False or Fraudulent Statements (24%)
Miscellaneous* (20%)
False or Fraudulent Claims (13%)
Conflicts of Interest (9%)
Computer Fraud (3%)
*Includes mail fraud, false identification insurance fraud, impersonating a government officer, and copyright infringement.
Data gathered from NSF OIG closed Investigative files (1990 – Present).
Common Types of Civil/Criminal Allegations
Investigation Outcomes
32%
21%
11%8%
8%
6%
6%
4%
4%
Unsubstantiated Allegations* (32%)
Restitution (21%)
Referral (11%)
Termination of Grant (8%)
Miscellaneous** (8%)
Incarceration/Probation (6%)
Termination of Employment (6%)
Civil Action (4%)
Debarment (4%)
* 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 Statutory Common Statutory ViolationsViolations
• Embezzlement/TheftEmbezzlement/Theft• FraudFraud• False Statements or False Statements or
ClaimsClaims• Conflict of InterestsConflict of Interests• Obstruction of Obstruction of
JusticeJustice• Civil False ClaimsCivil False Claims
• 18 USC 18 USC §§§§ 641, 666 641, 666• 18 USC 18 USC §§§§ 1030, 1341-3 1030, 1341-3• 18 USC 18 USC §§§§ 287, 1001 287, 1001
• 18 USC 18 USC §§§§ 207-9 207-9• 18 USC 18 USC §§ 1505 1505• 32 USC 32 USC §§ 3729 3729
Possible OutcomesPossible Outcomes
Institutional Sanctions Institutional Sanctions Letter of ReprimandLetter of Reprimand Ban from Service as ReviewerBan from Service as Reviewer Ethics TrainingEthics Training CertificationsCertifications AssurancesAssurances Federal-wide DebarmentFederal-wide Debarment Fines / RestitutionFines / Restitution PrisonPrison
DANGER, DANGER, Will Robinson, Will Robinson,
DANGERDANGER
Our numbers are going up.Our numbers are going up.
WHY?WHY?
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com
The Bad NewsThe Bad News
Ethical misconduct in business is back to Ethical misconduct in business is back to pre-Enron levels; aboutpre-Enron levels; about half of employees half of employees witnessed misconductwitnessed misconduct
Employees don’t report misconduct when Employees don’t report misconduct when they see it due to fear of retributionthey see it due to fear of retribution
The number of companies with effective The number of companies with effective enterprise-wide ethics programs has enterprise-wide ethics programs has declined since 2005declined since 2005
*National Business Ethics Survey, Ethics Resource Center, 2007 Report*National Business Ethics Survey, Ethics Resource Center, 2007 Report
More Bad NewsMore Bad News
Misconduct across government as a whole is very high; about 60% of employees witnessed misconduct
One in four government employees works in an environment deemed conducive to misconduct
The strength of ethical culture in government workplaces is declining, while pressure to commit misconduct is growing
Absent effective interventions, misconduct is likely to rise more in the future
*National Government Ethics Survey, Ethics Resource Center, 2007 *National Government Ethics Survey, Ethics Resource Center, 2007 ReportReport
AN Answer:
Effective Compliance Programs
Will you have a program? Will it be voluntary?
or Will it be imposed?
One Way To Get There: One Way To Get There: ImposedImposed Compliance Plans Compliance Plans
• $15 M; overcharging IDC$15 M; overcharging IDC
• $30 M, exceptional status; oversight program; misuse of federal grants $30 M, exceptional status; oversight program; misuse of federal grants
• $12 M; overbilling$12 M; overbilling
• $650,000; research fraud and abuse$650,000; research fraud and abuse
• $1.5 M, 5-year compliance program; cost-sharing$1.5 M, 5-year compliance program; cost-sharing
• $1.2 M; inflated research grant costs$1.2 M; inflated research grant costs
• $150,000, 5-year compliance program; misuse of federal funds$150,000, 5-year compliance program; misuse of federal funds
• $2.5 M, 5-year compliance program; cost-sharing, salaries, double $2.5 M, 5-year compliance program; cost-sharing, salaries, double chargingcharging
• $6.5 M, oversight program; mischarging awards$6.5 M, oversight program; mischarging awards
• $3.4 M, 5-year compliance program; misuse of federal grants$3.4 M, 5-year compliance program; misuse of federal grants
NSF’s RequirementsNSF’s Requirements The The awardee awardee has full responsibilityhas full responsibility for the conduct of the for the conduct of the
project or activity supported under this award and for project or activity supported under this award and for adherence to the award conditions. Although the awardee is adherence to the award conditions. Although the awardee is encouraged to seek the advice and opinion of NSF on special encouraged to seek the advice and opinion of NSF on special problems that may arise, such advice does not diminish the problems that may arise, such advice does not diminish the awardee’s responsibility awardee’s responsibility for makingfor making sound scientific and sound scientific and administrative judgementsadministrative judgements and should not imply that the and should not imply that the responsibility for operating decisions has shifted to NSF.responsibility for operating decisions has shifted to NSF.
By accepting this award, the awardee agrees to By accepting this award, the awardee agrees to comply comply with the applicable Federal requirementswith the applicable Federal requirements for grants and for grants and cooperative agreements and to the cooperative agreements and to the prudent managementprudent management of all expenditure and actions affecting the award.of all expenditure and actions affecting the award.
Reference: NSF’s Grant General Conditions, Article 1.Reference: NSF’s Grant General Conditions, Article 1.
You already have the responsibility
Compliance Programs Offer An Compliance Programs Offer An Integrated Approach to Integrated Approach to
Oversight in the Research Oversight in the Research EnvironmentEnvironment
GovernmentGovernment
Institution/UniversityInstitution/University
ResearcherResearcher
What What ISIS a Compliance a Compliance Program?Program?
Use of internal controls to effectively Use of internal controls to effectively monitor adherence to applicable statutes, monitor adherence to applicable statutes, regulations, and program requirements.regulations, and program requirements.
Finding risks and minimizing the danger Finding risks and minimizing the danger of abuseof abuse HHS Integrity Agreements in MedicareHHS Integrity Agreements in Medicare HHS GuidanceHHS Guidance Council on Government Relations GuidanceCouncil on Government Relations Guidance University ProgramsUniversity Programs Sarbanes OxleySarbanes Oxley
WWhat hat ISIS a Compliance a Compliance Program?Program?
• Implemented voluntarily or mandatedImplemented voluntarily or mandated• Mandated programs are based on US Sentencing Mandated programs are based on US Sentencing
GuidelinesGuidelines
• Address laws, regulations, rules, or agreementsAddress laws, regulations, rules, or agreements• Holds organization responsible for employees actionsHolds organization responsible for employees actions• Requires Leadership - commitment to do the right Requires Leadership - commitment to do the right
thingthing• Requires Management - ethical environmentRequires Management - ethical environment
• Focus on high risk areasFocus on high risk areas• Provide systematic monitoring, auditing, oversight Provide systematic monitoring, auditing, oversight
• Requires Training - Communicate facts and Requires Training - Communicate facts and expectationsexpectations
• Requires Action - Early detection /correction Requires Action - Early detection /correction
Why Have a Compliance Why Have a Compliance Program?Program?
• To foster an environment where employees can operate with To foster an environment where employees can operate with integrity and where ethical conduct is the normintegrity and where ethical conduct is the norm
• Serves as mitigating factor with DoJServes as mitigating factor with DoJ• The Antithesis of the Rationale: The Antithesis of the Rationale:
•Too expensiveToo expensive•Not enough staffNot enough staff•Hard to organizeHard to organize•No authorityNo authority•No needNo need•Too much trouble Too much trouble
Compliance Program ElementsCompliance Program Elements
• Reasonable standards and proceduresReasonable standards and procedures
• High-level personnel responsibleHigh-level personnel responsible
• Careful delegation of authorityCareful delegation of authority
• Effective trainingEffective training
• Monitoring and auditing systems; Monitoring and auditing systems; whistleblowing systemwhistleblowing system
• Consistent enforcementConsistent enforcement
• Respond appropriately to wrongdoingRespond appropriately to wrongdoing
• Report wrongdoingReport wrongdoingSource: Federal Sentencing Guidelines, U.S.S.G. §§ 8B2.1, 8C2.5(f), & 8D1.4(c)(1) Source: Federal Sentencing Guidelines, U.S.S.G. §§ 8B2.1, 8C2.5(f), & 8D1.4(c)(1)
(11/1/04)(11/1/04)
Risk, Risk, and How to Find and How to Find
ItItAuditors Auditors
Squeaky WheelsSqueaky WheelsWhistleblowersWhistleblowersInvestigatorsInvestigators
AREARE your friends your friends
Ethical Issues Your Ethical Issues Your Researchers Researchers
WILL ConfrontWILL Confront Data Selection Data Selection Sharing and Using IdeasSharing and Using Ideas Balancing PrioritiesBalancing Priorities Making Financial DecisionsMaking Financial Decisions Authorship and AcknowledgementsAuthorship and Acknowledgements CollaborationsCollaborations Conflicts of InterestConflicts of Interest Paraphrasing and PlagiarismParaphrasing and Plagiarism Mentorship/Advisor ProblemsMentorship/Advisor Problems Merit ReviewMerit Review Obtaining Oversight ReviewsObtaining Oversight Reviews
Finding RiskFinding Risk
• What needs more review?What needs more review?
• Where’s your itch? Where’s your itch?
• What’s autonomous?What’s autonomous?
• Where’s the black hole?Where’s the black hole?
• Are your warning bells ringing madly when Are your warning bells ringing madly when you hear someone else’s problems?you hear someone else’s problems?
• What gives you that “Gosh, gotta check What gives you that “Gosh, gotta check thatthat!” feeling?!” feeling?
Risk AreasRisk Areas
• Lack of adequate documentation Lack of adequate documentation • travel documentation travel documentation • cost-sharingcost-sharing• records retentionrecords retention• credit card receipts do not constitute adequate documentation credit card receipts do not constitute adequate documentation
• Time and effort reporting and procedures Time and effort reporting and procedures • Separate financial administration for each award, no poolingSeparate financial administration for each award, no pooling• Abuse or violations of institutional conflict of interest disclosure Abuse or violations of institutional conflict of interest disclosure
policies and procedures.policies and procedures.• Updated/adequate RM policies and proceduresUpdated/adequate RM policies and procedures• Subawardee monitoring (and A-133s)Subawardee monitoring (and A-133s)• Residual funds Residual funds • Oversight activities (Conflict of Interest, Humans, Animals)Oversight activities (Conflict of Interest, Humans, Animals)
More Risk AreasMore Risk Areas
• Allowable activities supportedAllowable activities supported• Allowable costs and cost principlesAllowable costs and cost principles• Cash managementCash management• Eligibility for awardsEligibility for awards• Equipment and real property managementEquipment and real property management• Period of availability of fundsPeriod of availability of funds• Procurement suspension and debarmentProcurement suspension and debarment• Program incomeProgram income• Participant supportParticipant support• Timely required reportingTimely required reporting• Special tests and provisions Special tests and provisions • Holding accountsHolding accounts• Summer salariesSummer salaries
What do you look like?What do you look like? Funding CharacteristicsFunding Characteristics
Grants, contracts, and with what entitiesGrants, contracts, and with what entities
Organizational ProfileOrganizational Profile DecentralizedDecentralized
Control ProfileControl Profile Rainmakers, President, staffRainmakers, President, staff
Audit ProfileAudit Profile How easily can you get down into the weeds?How easily can you get down into the weeds?
Activities LocationActivities Location On-site, off-site, another country, LTER, SBIR, SGEROn-site, off-site, another country, LTER, SBIR, SGER
Activity DescriptionActivity Description Animals, humans, collection, collaboration, toxins, radiation, Animals, humans, collection, collaboration, toxins, radiation,
equipmentequipment
Staffing CharacteristicsStaffing Characteristics Junior, independent, or “senior and wise”Junior, independent, or “senior and wise”
Training ProfileTraining Profile Comprehensive administrative, financial, oversight, fit the issuesComprehensive administrative, financial, oversight, fit the issues
One University’s Risk AssessmentOne University’s Risk AssessmentHeat MapHeat Map
IMPACT
High
Moderate
Low
Moderate HighLow
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
PR
OB
AB
ILIT
Y
Acquisition
Environmental, Health & Safety
Immigration & Visa Processing
Executive Benefits
Security
Human Subjects
Student Affairs
Animal Subjects
Gifts & Restricted Funds
Risk-Based Compliance Risk-Based Compliance ProgramsPrograms
•Require Leadership - commitment to do the right Require Leadership - commitment to do the right thingthing
•Require Management - ethical environmentRequire Management - ethical environment
• Focus on high risk areasFocus on high risk areas
• Provide systematic monitoring, auditing, oversight Provide systematic monitoring, auditing, oversight
•Require Training - Communicate facts and Require Training - Communicate facts and expectationsexpectations
•Require Action - Early detection and correction Require Action - Early detection and correction
•Require MEASURABLE indicators of successRequire MEASURABLE indicators of success
Compliance Programs:Compliance Programs:Providing ProtectionProviding Protection
Government Institution/University Researcher
Successful Successful ProgramsPrograms
• Address enforceable aspects (Rules)Address enforceable aspects (Rules)• Address intangible aspects (Ethics)Address intangible aspects (Ethics)• Address all essential elementsAddress all essential elements• Are applicable across institutional efforts / Are applicable across institutional efforts /
communitiescommunities• Have effective vehicles for deliveryHave effective vehicles for delivery
• On lineOn line• Separate classes Separate classes • Embedded in other classes (micro-insertion)Embedded in other classes (micro-insertion)• Laboratory trainingLaboratory training
• Contain measurable benchmarksContain measurable benchmarks• Mandatory or Elective?Mandatory or Elective?
• A one-time, optional, on-line, canned program?A one-time, optional, on-line, canned program?• Perhaps not the ideal vehiclePerhaps not the ideal vehicle
The Bottom LineThe Bottom Line
““Good governance is a mixture of the Good governance is a mixture of the enforceableenforceable and the and the intangibleintangible. . Organizations with strong governance Organizations with strong governance provide discipline and structure; instill provide discipline and structure; instill ethical values in employees and train ethical values in employees and train them in the proper procedures; and them in the proper procedures; and exhibit behavior at the board and exhibit behavior at the board and executive levels that the rest of the executive levels that the rest of the organization will want to emulate.”organization will want to emulate.”
The Unexpected Benefits of Sarbanes-Oxley,
Stephen Wagner and Lee Dittmar,
Harvard Business Review, April 2006, Online Version
Contact InformationContact Information
• Internet:Internet: http://www.nsf.gov/oig/http://www.nsf.gov/oig/
• E-mail:E-mail: [email protected]@nsf.gov
• Telephone: Telephone: 703-292--4993 (Bill)703-292--4993 (Bill)
• Anonymous:Anonymous: 1-800-428-21891-800-428-2189
• Write:Write: 4201 Wilson Blvd. Suite II-7054201 Wilson Blvd. Suite II-705
Arlington, VA 22230Arlington, VA 22230
ReferencesReferences http://oig.hhs.gov/fraud/complianceguidance.htmlhttp://oig.hhs.gov/fraud/complianceguidance.html http://www.nacua.org/documents/FedSentencingGuidelines.pdfhttp://www.nacua.org/documents/FedSentencingGuidelines.pdf http://www.ussc.gov/corp/Murphy1.pdfhttp://www.ussc.gov/corp/Murphy1.pdf http://www.usdoj.gov/dag/cftf/corporate_guidelines.htmlhttp://www.usdoj.gov/dag/cftf/corporate_guidelines.html http://ethicspoint.sitestream.com/Webinar%20fulfillment/VickyNemersonMarch2005/http://ethicspoint.sitestream.com/Webinar%20fulfillment/VickyNemersonMarch2005/
EthicsPoint_FSG%20Whitepaper-Feb05.pdfEthicsPoint_FSG%20Whitepaper-Feb05.pdf Grant, G. Odell, G., and Forrester, R; Grant, G. Odell, G., and Forrester, R; Creating Effective Research Compliance Programs in Creating Effective Research Compliance Programs in
Academic InstitutionsAcademic Institutions; ; Academic MedicineAcademic Medicine, Vol 74, No. 9, September 1999, p. 951. , Vol 74, No. 9, September 1999, p. 951. Jordan, K.S.; and Murphy, J.E.; Jordan, K.S.; and Murphy, J.E.; Compliance Programs: What the Government Really Compliance Programs: What the Government Really
Wants.Wants. Page 121. Page 121. A variety of University web sitesA variety of University web sites Managing Externally funded Research Programs; A Guide to Effective Management Managing Externally funded Research Programs; A Guide to Effective Management
Practices; Council on Government Relations, June 2005Practices; Council on Government Relations, June 2005 DHHS Draft OIG Compliance Program Guidance for Recipients of PHS Research Awards; DHHS Draft OIG Compliance Program Guidance for Recipients of PHS Research Awards;
Fed. Reg. Monday Nov 28, 2005, vol. 70#227, p:71312Fed. Reg. Monday Nov 28, 2005, vol. 70#227, p:71312 http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?ml_action=get-http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?ml_action=get-
article&articleID=R0604J&ml_page=1&ml_subscriber=truearticle&articleID=R0604J&ml_page=1&ml_subscriber=true