1. University Compliance Office
Compliance Office Presentation Washington University in St. Louis September 5, Senior Compliance Auditors Becky Evans Byron Morgan Clayton Avenue Campus Box
University Compliance Office

2. University Compliance Office
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.
University Compliance Office

5. 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.
University Compliance Office

6. 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.
University Compliance Office

7. 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
University Compliance Office

9. 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 )
Draft report to department head and administrator (includes opinion on overall compliance and recommendations requiring action)
Department administrator responds to recommendations
Final report issued
University Compliance Office

10. 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
University Compliance Office

11. University Compliance Office
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
University Compliance Office

12. University Compliance Office
PARS-Administrative Issues Activities 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. University Compliance Office
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:( (by function Med School website)
University Compliance Office

14. University Compliance Office
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
office managers
REF:( (by function Med School website)
purchasing assistants
payroll assistants
secretaries
stockroom attendants
University Compliance Office

15. 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 ?)
University Compliance Office

16. 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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17. University Compliance Office
BACK TO BASICS!
University Compliance Office

18. “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.)
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19. Significant & Common Compliance Issues Noted:
Missing or unclear PI or Designee Approval of Expense
Lack of PI Justification !
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20. University Compliance Office
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.”
University Compliance Office

21. Approvals Compliance Problems Noted:
Missing approvals
(Most common - cost transfers, consortium payments, modifications)
Clarity of approvals
(Whose initials/signature? Which initials/signature?)
Appropriateness of designee
University Compliance Office

22. University Compliance Office
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. University Compliance Office
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 Back-up Still Required
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)
University Compliance Office

28. Questionable Direct Costs
Uniforms (3424)
Laundry (3537)
Advertising (3540)
Recruitment (3541)
Relocation (3552)
Books (3575)
Subscriptions
(3576)
Publication of a Book (3517)
University Compliance Office

29. University Compliance Office
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”.
University Compliance Office

30. 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)
University Compliance Office

31. 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. University Compliance Office
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:
University Compliance Office

33. University Compliance Office
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. University Compliance Office
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. University Compliance Office
Resources
WU Policies for Direct-Charging Costs to Grants (“Blue Book” ) – SPA Website
ttp://spa.wustl.edu/direct.html
OMB A-21
NIH Grants Policy Statement
National Science Foundation Grant Policy Manual
University Compliance Office

38. University Compliance Office
Resources Cont’d
Washington University Research News
Washington University Policies (Systems & Procedures)
Code of Conduct-
Compliance Office-
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
University Compliance Office