The Inspectors General are The Inspectors General are Coming !Coming !

Doonesbury, 3 December 2005

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

Doonesbury, 5 December 2005

The Inspectors General are Here !The Inspectors General are Here !

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?

ww

w.lo

stin

spac

etv.

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

So, what is the answer?So, what is the answer?

The Magic Bullet Does The Magic Bullet Does NOTNOT exist.exist.

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: oig@nsf.govoig@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

QUESTIONSQUESTIONS