Evaluation of Corporate Compliance Programs: Autonomy and Resources

Dear friends,



The following article is about new guidance from the Department of Justice
regarding the evaluation of compliance plans, specifically with regard to
autonomy and resources. Feel free to share this information. If you decide
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Elizabeth



Elizabeth E. Hogue, Esq.

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ElizabethHogue@ElizabethHogue.net





Evaluation of Corporate Compliance Programs: Autonomy and Resources



Fraud enforcers recently declared that their expectation is that every
provider has a Compliance Program. Consequently, enforcers will now focus
on implementation of quality Compliance Programs. As part of this new
focus, the U. S. Department of Justice (DOJ) issued new guidance on February
8, 2017, entitled "Evaluation of Corporate Compliance Programs." This new
guidance provides a "road map" for providers to use to evaluate their
Compliance Programs, including the factors that regulators are likely to
take into account.



Specifically, the U.S. DOJ provided sample topics and questions it is likely
to use to evaluate providers' Compliance Programs. These factors include
Autonomy and Resources. The specific factors used to evaluate Compliance
Programs with regard to autonomy and resources are as follows:



- Compliance Role - With regard to relevant misconduct, were
compliance issues addressed in training and decision-making? Did legal,
finance, audit, etc. raise concerns in the areas where the misconduct
occurred?



- Stature - How does the compliance function compare with other
strategic functions in the company in terms of stature, compensation levels,
rank/title, reporting line, resources and access to key decision-makers?
What is the turnover rate for personnel involved in compliance and relevant
control functions? What role does compliance play in the provider's
strategic and operational decisions?



- Experience and Qualifications - Do staff members responsible for
compliance and control have appropriate experience and qualifications for
their roles and responsibilities?



- Autonomy - Do the staff members responsible for compliance and
relevant control functions have direct reporting lines to the Board of
Directors? How often do staff members meet with the Board of Directors? Are
members of the senior management team present during these meetings? Who
reviewed the performance of staff members responsible for compliance and
what was the review process? Who determined compensation, bonuses, raises,
hiring and termination of compliance officers? Do the compliance personnel
in the field have reporting lines to headquarters? If not, how has the
provider ensured their independence?



- Empowerment - Have there been specific instances in which staff
responsible for compliance raised concerns or objections in the areas in
which the wrongdoing occurred? How has the provider responded to compliance
concerns? Have there been specific transactions or deals that were stopped,
modified or more closely reviewed as a result of compliance concerns?



- Funding and Resources - How have decisions been made about the
allocation of personnel and resources for compliance and control activities
in light of the provider's risk profile? Have there been times when
requests for resources for compliance and control functions been denied? If
so, how were these decisions made?



- Outsourced Compliance Functions - Has the provider outsourced all
or part of its compliance functions to external firms or consultants? What
was the rationale for doing so? Who was involved in decisions to outsource?
How has the process been managed, including who oversaw and/or coordinated
with external firms and consultants? What access did external firms and
consultants have to company information? How has the effectiveness of the
outsourced activities been assessed?



The DOJ has provided a very useful "road map" to providers to assist them to
evaluate the implementation and effective of their Compliance Programs. Use
it!





C2017 Elizabeth E. Hogue, Esq. All rights reserved.

No portion of this material may be reproduced in any form without the
advance written permission of the author.
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