University Compliance Office1 Compliance Office Presentation Washington University in St. Louis...

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/


Agenda

Description and purpose of the University Compliance Office

Typical compliance review process

Significant compliance issues noted in

the 5 reviews completed


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.


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.


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.


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.


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.


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


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


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


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


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.)


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)


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


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 ?)


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.)


BACK TO BASICS!


“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.)


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 !


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.”


ApprovalsCompliance Problems Noted:

Missing approvals (Most common - cost transfers, consortium payments,

modifications)

Clarity of approvals (Whose initials/signature? Which initials/signature?)

Appropriateness of designee


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”


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”


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


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


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!


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)


Questionable Direct Costs

Uniforms (3424)

Laundry (3537)

Advertising (3540)

Recruitment (3541)

Relocation (3552)

Books (3575)

Subscriptions (3576)

Publication of a Book (3517)


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”.


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)


Unallowable Direct Costs Cont’d

Gifts (3569)

Alcohol (3574)

Other Dues/ Memberships (3587)

Other Services

(3588)

Misc. Expenses

(3599)

Other Travel-Dues (3657)


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


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


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


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


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


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/


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/


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

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