Learning about challenges of building a global compliance program in a time of increased oversight. Case Study: FHI 360 s worldwide compliance program

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Anastasia Quinn
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DEMYSTIFYING COMPLIANCE IN A TIME OF OVERSIGHT

global compliance program in a time of increased

program Sharing examples demonstrating quick and

1 DEMYSTIFYING COMPLIANCE IN A TIME OF OVERSIGHT Session Goals Learning about challenges of building a global compliance program in a time of increased oversight Case Study: FHI 360 s worldwide compliance program Sharing examples demonstrating quick and effective mechanisms in responding to compliance and oversight needs 2 1

Questions for the audience 1. What does compliance mean to you? 2. Do you have any challenges or success stories from your compliance program that you can share? 3.

2 Questions for the audience 1. What does compliance mean to you? 2. Do you have any challenges or success stories from your compliance program that you can share? 3. Do you have any suggestions for other topics of interest that could be included in this presentation? 3 ABOUT FHI What does the 360 stand for anyway? In 2011, the teams of experts from Family Health International and Academy for Educational Development came together to create FHI

Timeline FHI grew from a contraceptive research project begun at the University of North Carolina at Chapel Hill, becoming an independent, nonprofit organization in 1975.

3 Timeline FHI grew from a contraceptive research project begun at the University of North Carolina at Chapel Hill, becoming an independent, nonprofit organization in Since then FHI s work expanded beyond family planning into other areas of reproductive health research, HIV/AIDS prevention, and other health and development challenges. In June of 2011 FHI signed an asset purchase agreement for FHI to acquire the programs, expertise and other assets of AED. The acquisition created FHI 360, enabling FHI to expand its evidence-based approach to a broader set of social challenges AED is founded 1971 Contraceptive research project begins in NC 1975 FHI becomes an independent, nonprofit organization 2010 AED suspended from USG funding 2011 FHI acquires assets of AED and FHI 360 is formed AED originally focused on providing technical assistance related to higher education management in the US, later expanding into other areas of international development, including education reform, civil society, and health. In December of 2010, USAID suspended AED from being awarded new federal service contracts following investigations of the agency s expenditures in Pakistan and Afghanistan. In March of 2011 AED announced its intent to pursue a single, qualified acquirer, and settled on FHI after an extensive review and exploration process 5 FHI 360 Today 6 3

FHI 360 Today Today FHI 360 is a nonprofit human development organization dedicated to improving lives in lasting ways by advancing integrated, locally driven solutions.

capabilities to address today's interrelated development challenges. FHI 360 serves more than 60 countries and all U.S.

4 FHI 360 Today Today FHI 360 is a nonprofit human development organization dedicated to improving lives in lasting ways by advancing integrated, locally driven solutions. Our staff of over 4,000 includes experts in health, education, nutrition, environment, economic development, civil society, gender equality, youth, research and technology creating a unique mix of capabilities to address today's interrelated development challenges. FHI 360 serves more than 60 countries and all U.S. states and territories Mission Employees 4,089 Total support and revenue Countries FHI 360 operates in FHI 360 Science of Improving Lives $650+ million (estimated) 60+ countries OCIA established 2011 (Office of Compliance and Internal Audit (OCIA) Staff in OCIA 19 Focus of OCIA Audit Compliance Enterprise Risk Management Risk assessment Investigations Advisory services 6 FHI 360 TODAY Financial Summary snapshot 7 4

Contractor Employee caught trying to ship back $150,000 in cash from kickbacks to U.S.

5 WHY COMPLY? The current state of compliance 8 In Compliance News 212 companies and individuals suspended or debarred from Federal work for fraud during Iraq reconstruction Former Contractor Employee caught trying to ship back $150,000 in cash from kickbacks to U.S. Ex-state Department Contract Specialist, Husband Charged in $60 million Contract Scam Subcontract for $1.7 Million in Kenya Terminated After Confirmation of Extortion Scheme Afghan National Debarred After Stealing More Than $200,000 From USAID Project Former USAID Contractor Reaches Settlement with Department of Justice Over False Claims charges Senate passes provision to provide a stronger force of inspectors general 9 5

In Compliance News A finance manager in India submitted falsified receipts for medical expenses. Six local staff in Botswana made unauthorized exit payment to themselves.

Sub-recipient provided falsified supporting documentation in Papua New Guinea.

6 In Compliance News A finance manager in India submitted falsified receipts for medical expenses. Six local staff in Botswana made unauthorized exit payment to themselves. A Nigerian employee created false quotations from non-existent vendors and consistently used one vendor from whom he allegedly received kickbacks. Sub-recipient provided falsified supporting documentation in Papua New Guinea. A project director selected an outside organization as a sub-recipient for a project in Liberia, without disclosing his relationship as the Board of Director at the outside organization. In Ghana, a consultant contract was entered without appropriate selection and justification. Effective compliance program rescues organizations from FCPA Prosecution Lesson learnt from the US Sentencing Guideline 10 What does compliance mean to FHI 360? 11 6

7 FHI 360 s Office of Compliance and Internal Audit (OCIA) An independent, objective function outside of the management structure; Managed by the Chief Compliance Officer; Reports to the Audit Committee of the FHI 360 Board of Directors with an administrative reporting line to the CEO; Preventative, proactive & training based focus on personal responsibility at all levels; Internal sourcing through leverage of FHI 360 finance, contracts, procurement, field offices, programmatic staff, where independence is not compromised; Direct access and open communication across authority lines to both executive leadership and the Audit Committee. 12 Organizational Structure & Reporting Lines Board of Directors Distinguished (Scientist), President Emeritus Ward Cates & Peter Lamptey CEO Albert Siemens Chief Compliance Officer Sean Temeemi Chief Operating Officer Patrick Fine Senior Advisor, Strategy and Communications Manisha Bharti EVP and General Counsel Robert Price Chief Finance Officer Robert Murphy Chief Human Resources Officer Pamela Myers Chief Administrative Officer David Mein OCIA constitutes approximately 4% of FHI 360 overhead 13 7

8 OCIA Organizational Chart Chief Compliance Officer Sean Temeemi Compliance Director of Compliance (HQ) Internal Audit Director of Internal Audit (HQ) Enterprise Risk Management Office of the General Counsel Risk Advisory Group Compliance Team Internal Audit Team 14 OCIA s Communication Strategy A strong communication strategy has been essential in raising the profile of compliance. FHI 360 s OCIA implemented the following: Regular updates with the board of directors Regular updates with the external auditors Regular staff communication or all staff town halls Regular updates with executive/senior management End Goal Regular communication with country and project offices Regular communication with funders 1. Increased awareness of the team s existence, roles, responsibilities and avenues to contact the team 2. The compliance team establishes a level of trust within the operational structure 3. Building confidence in the compliance program (internally and externally) 15 8

9 Risk Management OCIA Standards Quick Response or First Responders 0 USD threshold for investigations Zero Tolerance Maintaining Independence Separation between Compliance and Investigations 16 Key Activities Internal Audit Risks based internal audits Annual audit plan Special Audits (time keeping, intercompany transfers, unallowable costs) Coordination with Compliance, Program Finance, and Field Finance Staff Subcontract to audit firms, when appropriate, to supplement internal resources Compliance Risk Based Compliance Reviews Compliance education and training compliance matters Guidance and advice on compliance matters Assist country management with technical review/skills assessment of finance staff (both HQ and field based Follow up on observations Ad hoc technical assistance Direct project assistance Investigations Manage compliance hotline (web based and telephone) and compliance (compliance@fhi360.org) Conduct demand driven investigations related to topics of fraud, abuse or misuse 17 9

OCIA Scope in FY 2013 Operating Premise: Keep high risk countries visited each year AND rotate remaining countries for audit desk reviews and compliance reviews.

10 OCIA Scope in FY 2013 Operating Premise: Keep high risk countries visited each year AND rotate remaining countries for audit desk reviews and compliance reviews. Functional Area High Level Goal Details Audit Goal 65% of revenue 70% of our resources on international projects 30% of our resources on domestic projects and enterprise services functions Compliance Goal 60% of countries (34 countries will be covered) Investigation Goal Other 90% of our resources on international projects 10% of our resources on domestic projects Keep other activity level the same (while investigation activities will be based upon actual cases received) Increased involvement in 3 rd party audits, compliance related training, ERM, etc. 18 OCIA Activity Since 2011, OCIA has conducted or commissioned almost 200 reviews and visited 50 countries 19 10

11 Questions for the audience 1. What does compliance mean to you? 2. Do you have any challenges or success stories from your compliance program that you can share? 3. Do you have any suggestions for other topics of interest that could be included in this presentation? 20 Questions? 21 11

Request for Assistance (RFA)

Request for Assistance (RFA) RFA #: FY15-Consultant Canvas Development - 2 Issued on: July 13, 2017 For: Development services to support the implementation of an open-source instance of the Canvas LMS