ICGFM Working in the Field in a Time of Increased Oversight Sean Temeemi, Chief Compliance Officer, FHI 360 November 7, 2012

Click to edit the outline text format  Second Outline Level Third Outline Level  Fourth Outline Level Fifth Outline Level Sixth Outline Level Seventh Outline Level Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level Fifth level Office of Compliance and Internal Audit (OCIA) MISSION STATEMENT 2 “In partnership with internal and external clients, the Office of Compliance and Internal Audit promotes a world-wide culture of compliance through a value- added, independent, training-based, disciplined approach to evaluation of internal controls and processes in a systematic, integrated, and transparent manner.” Every FHI 360 Employee is an advocate, partner, and voice for compliance world-wide

QUICK FACTS ABOUT OFFICE OF COMPLIANCE & INTERNAL AUDIT (OCIA) An independent, objective assurance & consulting function, managed by Chief Compliance Officer; Preventative, proactive, collaborative & training-based approach with a focus on personal responsibility at all levels; Field-based Compliance team - “First Responders” to reported issues; Conservative position on credible evidence: early disclosure and prompt refunds to the USG; Internal sourcing through leverage of FHI 360 field office and HQ staff, where independence is not compromised; Coordination with project-funded compliance officers in the field; Direct and unrestricted access to FHI 360 records, information and personnel and frequent and open communication with the Audit Committee.

OCIA ORGANIZATIONAL CHART 4 Compliance Director of Compliance (HQ)Regional Compliance Officers (Field 4) Internal Audit Director of Internal Audit (HQ) Internal Audit Team (HQ & Field 9) Enterprise Risk Management Risk Advisory Group Chief Compliance Officer Office of the General Counsel

Click to edit the outline text format  Second Outline Level Third Outline Level  Fourth Outline Level Fifth Outline Level Sixth Outline Level Seventh Outline Level Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level Fifth level OCIA’S ROLE IN ENTERPRISE RISK MANAGEMENT Foster “Tone at the Top ” Host “Risk Advisory Group”Define Institutional RisksManage Institutional Risk Framework Develop Best Practices Advise leadership on risk universeRecommend actions on identified risksIdentify risk through collaborative interviews with key FHI 360 teamsCompile and analyze data on risk & trendsMonitor risks such as business diversification Host industry round table discussionsDefine risk categoriesDefine risk tolerance

6 ROLES OF COMPLIANCE & INTERNAL AUDIT INVESTIGATIONS (Compliance & Internal Audit) Compliance Before Audit Education and training (online training, modules) Hotline management (phone & web-based) Internal Audit Compliance After Audit Follow up on observations in 6-12 months after the visit of IA Annual audit plan – risk-based approach Special Audits (time keeping, intercompany transfers)Management of Agreed Upon Procedures performed by outside audit firms Compliance Reviews (Country office and project assessments in preparation for the IA visit) ~ 3 months before IA visit Assistance to internal stakeholders on compliance initiatives (e.g., subaward management committee, etc.) Hands-on training to staff in the field at the time of the review Coordination of activities with other functions (Ops Finance, Program, Contracts, etc.)Guidance to programs on third party and funder-audits. Assistance to projects during funder audits

OCIA COMMUNICATION STRATEGY 7 TOOLS: OCIA BROCHURE PRESENTATIONS HOTLINE INFORMATION POSTERS ONLINE TRAINING MODULES (Conflict of Interest, Kickback, FCPA, etc.) DESIRED OUTCOME ALL STAFF communication: quarterly e-newsletters and all staff town halls EXECUTIVE/SENIOR MAGANGEMENT updates & discussions of organization-wide compliance trends AUDIT COMMITEE regular activity updates EXTERNAL AUDITORS – coordination of audit coverage, annual audit assistance COUNTRY OFFICE/FIELD STAFF Presentations, visits, training FUNDERS Visits to Missions & presentations 1. Increase awareness and understanding, both internally and externally, of OCIA’s existence, responsibilities, activities, and ways to report non-compliance 2. Uphold corporate standards & expectations of ethical behavior 3. Develop a trust-based relationship with all stakeholders 4. Build confidence in OCIA’s capabilities, approach, and work product. A strong communication strategy is critical to increasing awareness of OCIA’s organizational role and instilling compliance as part of the culture of the organization

Click to edit the outline text format  Second Outline Level Third Outline Level  Fourth Outline Level Fifth Outline Level Sixth Outline Level Seventh Outline Level Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level Fifth level COORDINATION WITH INTERNAL STAKEHOLDERS Global Portfolio Management (GPM) and Departments Operations Finance Procurement Program Finance Operations Support Human Resources Contract Management Services Quality Assurance Communications Information Management Project Management Standards Office Coordination expectations Advance notification of audit and compliance reviews Updates on new relevant evidence and recommended action items Communication on major notifications (i.e., IG notifications, etc.) 8 In executing its mission OCIA coordinates with a variety of internal stakeholders, including (but not limited to):

Click to edit the outline text format  Second Outline Level Third Outline Level  Fourth Outline Level Fifth Outline Level Sixth Outline Level Seventh Outline Level Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level Fifth level KEY TO A SUCCESSFUL COMPLIANCE PROGRAM QUICK ACCESS & GEOGRAPHIC COVERAGE CONTINUOUS IMPROVEMENT FOCUS ON DETECTION & PREVENTION (ASSISTANCE TO STAFF IN MAKING ETHICAL DECISIONS) EMPLOYEE UNDERSTANDING OF POLICIES SUPPORT FROM THE BOARD OF DIRECTORS COLLABORATIVE RELATIONSHIPS WITH SENIOR MANAGEMENT & OTHER ORGANIZATIONAL STAKEHOLDERS OUTCOMES: Projected Strength through Compliance Reputation (a long-term investment) Better Employee Moral Guiding Principle: Compliance & ethics program is not just a “check the box” function – rather it is incorporated into the very fabric of all decision-making and actions.

QUESTIONS? 10