2019: Time for Evidencing Compliance Program Evaluation
The compliance officer, like any program manager, is responsible for the ongoing monitoring of their program. However, compliance officers should use independent companies to conduct evaluations to provide convincing evidence of their compliance program’s effectiveness. An organization can evidence a compliance program’s effectiveness using three general methods: (1) a complete compliance program evaluation; (2) a compliance program gap analysis; or (3) independently developed and administered employee surveys of compliance knowledge, attitude, and perceptions.
A Compliance Program Effectiveness Evaluation conducted by recognized experts is the best, but most expensive, method. The evaluation measures outcomes by conducting a 360-degree evaluation that includes: (a) full document examination and review; (b) on-site review and testing of operations in action; and (c) interviews of Board members, executives, selective key staff, and focus groups. Such in-depth reviews require significant time and effort. When following generally accepted consultant review standards and the General Accountability Office standards of independence, qualifications, and objectivity, most evaluations involve 120 to 200 hours of work. If completed properly, the resulting reports can be 60-100 pages and will include findings, observations, recommendations, and suggestions for program improvement.
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A Compliance Program Gap Analysis can be done at half the cost of a full Compliance Program Effectiveness Evaluation, but the results can also be less valuable and helpful. A Compliance Program Gap Analysis is primarily a document “checklist” review, focusing on output metrics, rather than outcome metrics related to program effectiveness. It is important not to mix a gap analysis with a full effectiveness evaluation. Many companies offer a comprehensive effectiveness review but provide a gap analysis review instead, and the results will likely prove disappointing. However, a gap analysis is helpful and best used for organizations that have new or incomplete programs and need assistance completing their compliance program development. The gap analysis can identify gaps for inexperienced compliance officers; however, it does not provide the recommendations and suggestions on how to fill those gaps, which are included in an effectiveness evaluation. Many larger, multi-faceted consulting/accounting firms use this approach as a way of gaining a foothold in the organization to pave the way for larger and more costly services. Organizations should note that the more limited the scope of work, the greater the need for an expert to provide precise, useful, and cost-effective results.
A compliance survey of employees is the least expensive means for evidencing and benchmarking compliance program effectiveness, at a fraction of the cost of the two other methods. Regulatory bodies have long advocated for the use of compliance surveys, citing them as useful tools in the Federal Sentencing Guidelines and Department of Health and Human Services Office of Inspector General Compliance Program Guidance for Hospitals and Supplemental Guidance for Hospitals. Both guidance materials advise using surveys of employees to gauge how well a program is functioning. Also, an organization can take advantage of benchmarking its survey results against other organizations when the surveys are included in a large database of survey results. Compliance Knowledge Surveys test employee knowledge of their organization’s compliance program structure and operations. They can provide very credible empirical evidence of the advancement of program knowledge, understanding, and effectiveness. Compliance Culture Surveys focus on employee beliefs, attitudes, and perceptions concerning compliance, and are useful in measuring the extent to which individuals, coworkers, supervisors, and leaders demonstrate commitment to compliance. Organizations should consider both types of surveys as they are useful in benchmarking and measuring change in the compliance environment over a period and provide different dimensions and perspectives on a compliance program.
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