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University Compliance Office 1
Compliance Office Presentation
Washington University in St. Louis
September 5, 2002
Senior Compliance AuditorsBecky Evans 362-4907 Byron Morgan 362-4909
4480 Clayton AvenueCampus Box 8016
http://universitycompliance.wustl.edu/
University Compliance Office 2
Agenda
Description and purpose of the University Compliance Office
Typical compliance review process
Significant compliance issues noted in
the 5 reviews completed
University Compliance Office 3
What is the Washington University
Compliance Program ?
The Washington University Compliance Program is the expression of a commitment by Washington University to carry out its educational, research, and health care activities in compliance with all relevant laws and regulations and with the highest integrity.
University Compliance Office 4
What is the Washington University Compliance Program? Cont’d
Washington University’s Board of Trustees approved the establishment of the Washington University Compliance Program and a University Compliance Office in April 2000.
A Code of Conduct was then developed with input from
many members of the University community, and issued to University community members in April 2002.
Three full-time compliance auditors perform proactive and
investigational (as needed) compliance audits. The results of compliance audits are incorporated in formal compliance training programs that are being developed or refined.
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Specific Role of the University
Compliance Office Verify that effective compliance is occurring in all
activities governed by federal law and regulation, and by University policy.
Verification does not mean performing the work of compliance.
– It means making sure that all relevant activities have effective compliance organizations.
– It means making sure that these compliance organizations have effective policies and procedures, effective training programs, and effective techniques for monitoring compliance.
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Specific Role of the University Compliance Office Cont’d
Conduct compliance audits. Auditing is not the same as monitoring. Auditing and
monitoring are both means of checking to see if compliance has occurred. However, there are important differences:
a) Monitoring is typically done by the activity that is being
monitored. b) Monitoring typically occurs much more frequently than
auditing. c) Monitoring is less formal.
d) Monitoring and auditing should work together.
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Specific Role of the University Compliance Office Cont’d
Develop, revise, and maintain a University Code of Conduct.
Maintain a University compliance hotline for the reporting of suspected violations or concerns.
Maintain effective and ongoing communication with
the University’s senior management and with the Audit Committee of the Board of Trustees concerning the state of compliance in University activities that require compliance.
University Compliance Office 8
Typical Compliance Review
Based on annual plan & special requests
Usually 4 to 8 weeks in length
WU Guidelines for Direct-Charging Costs to Grants (“Blue Book”)
OMB Circular A-21 (cost principles)
NIH/NSF Guidelines
Focus on PARS and Supporting Documentation for charges to grants
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Typical Compliance Review Process
Opening Meeting Review samples of supporting documentation
Interview sample of PIs and other employees (sourced to federal funds)
Review of grant proposals and award documents as necessary
Questions back and forth between department administrator and compliance auditor (usually by email)
Draft report to department head and administrator (includes opinion on overall compliance and recommendations requiring action)
Department administrator responds to recommendations
Final report issued
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Significant Issues From Past Reviews
PARS and Effort Reporting
Direct Charges to Grants – Documentation– Justification– Unallowable & Questionable Costs
Proportional Benefit
Cost Transfers Animal & Human Subject Protocols
Training Grants
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PARS
Legal Document, Official University System for Reporting Salary Charges to Grants
Completed timely and signed properly Reflect actual effort
Administrative Issues– Administrative Job Codes– Effort on Grant Proposals and Committees– Other Administrative Activities
Key Personnel & Effort Reporting
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PARS-Administrative IssuesActivities generally not direct charged to grants, but recovered
indirectly through Facilities & Administration Rate (F&A)
“The expenses under this heading are those that
have been incurred for administrative and
supporting services that benefit common or joint
departmental activities or objectives in academic
deans' offices, academic departments and
divisions, and research centers." (OMB No. A-21
F.4.a.)
University Compliance Office 13
PARS-Administrative Issues Cont’d Activities generally not direct charged to grants, but recovered
indirectly via Facilities & Administration Rate (F&A)
Faculty and staff departmental administration duties may include, but are not limited to:
preparation and review of Personnel Activity Reports preparation of departmental budgets and/or payroll review of departmental accounts and financial statements preparation of grant applications planning for building projects and renovations selection and recruitment of faculty selection of graduate students selection and training of staff editing professional journals where the journal provides funds which are
administered by WU or where WU is a sponsor
REF:(http://aladdin.wustl.edu/finance.nsf/) (by function Med School website)
University Compliance Office 14
PARS-Administrative Issues Cont’d
Job titles generally not direct charged to grants, recovered through indirectly through the F&A Rate.
Administration and clerical titles that are typically coded as
departmental administration may include, but are not limited
to: administrators accountants
bookkeepers
accountants
office managers
REF:(http://aladdin.wustl.edu/finance.nsf/) (by function Med School website)
purchasing assistants
payroll assistants
secretaries
stockroom attendants
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Key Personnel & Effort Reporting
Does effort in the proposal match actual effort ? (salary charged to grant and cost sharing matched with University payroll system)
Who are the key personnel listed in the proposal ?
Per NIH guidelines effort decreases (key personnel) of 25% or more have to be reported to the agency. (Does the department have a system to monitor this ?)
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Review of Direct Charges Non-Personnel
1. Normally Allowable (A-21 F.6.b)
2. NOT Normally Allowable (A-21 F.6.b)
3. Questionable (“Okay, if…” A-21, BUOB Manual)
4. Unallowable (A-21 J.)
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BACK TO BASICS!
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“The Golden Rule”Direct Costs
“Direct costs are those costs that can be
identified specifically with a particular
sponsored agreement……or that can be
directly assigned to (such activity)
relatively easily and with a high degree of
accuracy.” (A-21 D.1.)
University Compliance Office 19
Significant & Common Compliance Issues Noted:
Missing or unclear PI or Designee Approval of Expense
Lack of PI Justification ! Lack of PI Justification ! Lack of PI Justification !
University Compliance Office 20
Approvals
A-21 (B4d) - “….(e.g., signature or initials of the principal investigator or designee or use of a password) will normally be considered sufficient.”
WU Policies for Direct-Charging Costs to Grants (Blue Book) - Designee “is in the position to know the linkage of the expense with the funded project is close and clear.”
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ApprovalsCompliance Problems Noted:
Missing approvals (Most common - cost transfers, consortium payments,
modifications)
Clarity of approvals (Whose initials/signature? Which initials/signature?)
Appropriateness of designee
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Documentation
“Careful and clear documentation of actions is proof of the investigator’s conscientious exercise of the fiduciary responsibility inherent in the expenditure of public funds…….
WU “Blue Book”
University Compliance Office 23
Documentation Cont’d
…...Proper documentation for charges
or cost transfers to a grant should pass
the “stand alone” test. An interested
party, without additional explanation,
must easily understand the paper audit
trail for a charge or transfer.” WU “Blue Book”
University Compliance Office 24
Normally Allowable Direct Costs
Lab Supplies & Services
Other Expenses Travel Equipment Consortium Costs Consulting Costs
(Reminder: Use Consulting Form)
Animal Expenses
Human Subject Expenses
PI Approval and PI Approval and
Back-up Still Back-up Still RequiredRequired
University Compliance Office 25
Normally Allowable Compliance Issues
Travel Traveler Not Paid From
Fund Charged
Absence of Receipts Inappropriate Receipts -
need details Misc. - Question phone
charges, use of meal per diems, Use TA for >$500
and not CR
University Compliance Office 26
Normally Allowable Compliance Issues
Equipment Lack of Justification for General Purpose
Items (especially small equipment)
Purchase of Equipment Within Final 60 Days of Project Period (project not renewed)
$25,000 or more - Screening Certificate, 3 bids - in good shape!
University Compliance Office 27
NOT Normally Allowable Direct Costs - A-21 F.6.b
Supplies (3403) (Can the item be justified as project specific?)
Office Supplies (3411) (Admin Core?)
Postage (3512)
Laser Printer Supplies (3455)
Phone - Monthly (3530) - Is it Off Campus ?
DP Line Costs - Monthly (3532) (Is there a special circumstance?) (3532)
Dues-Memberships (3557)
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Questionable Direct Costs
Uniforms (3424)
Laundry (3537)
Advertising (3540)
Recruitment (3541)
Relocation (3552)
Books (3575)
Subscriptions (3576)
Publication of a Book (3517)
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REMEMBER!
PI MUST JUSTIFY (Do the costs benefit the project(s) being
charged closely and clearly?)
PI MUST APPROVE
DOCUMENT! DOCUMENT! AND….. Don’t Assume the need for the expense is
understood!
Don’t expect SPA to “remember last month’s justification”.
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Unallowable Direct Costs
(A-21 J., SPA Policy Memo 1/31/02)
Legal Fees (3080)
Memorial
Contributions (3443)
Supplies (3487)
Supplies-Other
(3499)
Financial (3521)
Bank Fees (3524) Entertainment
(3550)
Social Expenses (3553)
Prizes/Awards (3554)
Bad Debt Expense (3560)
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Unallowable Direct Costs Cont’d
Gifts (3569)
Alcohol (3574)
Other Dues/ Memberships (3587)
Other Services
(3588)
Misc. Expenses
(3599)
Other Travel-Dues (3657)
University Compliance Office 32
Proportional Benefit From A-21: "If a cost benefits two or more (grants) in proportions that
can be determined without undue effort or (administrative expense), the cost should be allocated to the (grants) based on the proportional benefit." (C4d(3))
The cost in question should be specifically identifiable with the group of grants relatively easily, and with a high degree of accuracy.
Credible documentation of this identification must be maintained by the department.
The Principal Investigator must approve the use of proportional benefit and the method of its use.
Distribution of allowable direct costs by proportional benefit is an automated feature of FIS. Supporting documentation required.
REF: http://spa.wustl.edu/dircharge/interim.html
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Cost Transfers Cost transfers from one grant to another are permitted in order to link a
cost more appropriately with the benefit it is providing. Detailed explanation required. “To correct an error” is not an acceptable explanation.
Cost transfers from one grant to another are not permitted in order to solve funding problems or for other reasons of convenience. (C4b)
Cost transfers must be submitted within 120 days of the original charge or within 30 days following the ending date of the grant, whichever is sooner.
Approval by PI.
Payroll cost transfer tips from SPA (6/21/02)
REF: SPA Website (direct charges-interim guidelines), Research News Website (message library-other), General Accounting Manual Chapter 15
University Compliance Office 34
Human Subject Protocols IRB Protocol is approved under
PI of grant, has same title as grant, funding agency matches, & approval is effective during grant award period
Consent forms signed & dated by PI & subject, signed during period of active protocol, and title on consent form agrees to approved protocol title
University Compliance Office 35
Animal Studies
Protocol used for purchases is approved for use by the PI of the grant being charged, and the title and agency also match the grant
Date of animal purchases fall within IACUC approved protocol period
Species ordered matches species in approved protocol
PI/designee approved requisition
University Compliance Office 36
National Research Service Awards (NRSA)
Ref. NIH GPS Pg. 175
Key area of non-compliance for T32s • Stipends & other allowances paid out
prior to submitting Appointment Form to NIH (GPS Pg. 206 & NGA Restrictions)
• Other - wrong insurance charges, wrong stipend levels, missing amended Appointment Forms
University Compliance Office 37
Resources
WU Policies for Direct-Charging Costs to Grants (“Blue Book” ) – SPA Website– ttp://spa.wustl.edu/direct.html
OMB A-21– http://www.whitehouse.gov/omb/circulars/a021/a021.html
NIH Grants Policy Statement– http://grants.nih.gov/grants/policy/nihgps_2001/nihgps_2001.pdf
National Science Foundation Grant Policy Manual– http://www.nsf.gov/
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Resources Cont’d
Washington University Research News– http://researchnews.wustl.edu/medadmin/rnews.nsf/WSM?
OpenView&Count=1000
Washington University Policies (Systems & Procedures)– http://fishelp.wustl.edu/
Code of Conduct-http://codeofconduct.wustl.edu/
Compliance Office-http://universitycompliance.wustl.edu/
University Compliance Office 39
Compliance Definition
Com-pli-ance - “The act of agreeing passively to a request, rule, or demand.
The tendency to yield to others.”
WU Environment - - Agreeing passively = a required job
duty for each of us - paid to do it
- Others = mostly government entities