Compliance Perspectives

1. Compliance Perspectives SRA 2002 Annual Meeting Orlando, Florida October 29, 2002

2. Faculty • Diane Dean, Director Division of Grants Compliance and Oversight Office of Policy for Extramural Research Administration, OER, NIH • Susan Sherman, Senior Attorney Office of the General Counsel, DHHS

3. Division of Grants Compliance and Oversight Wendy Baldwin Deputy Director for Extramural Research, OER Regina White Director OPERA Gail Gibbons Director, Division of Grants Policy Diane Dean Director, Division of Grants Compliance and Oversight James Cain, Director Division of Extramural Information Systems Cheryl Chick Assistant Grants Compliance Officer Susan Kauble Assistant Grants Compliance Officer

4. Compliance is… • The effective management of public funds to maximize research outcomes • The avoidance of fraud, institutional mismanagement and poor management of Federal funds • An institutional commitment • more likely to be present and effective if it is established as an institutional expectation

5. Compliance Begins at Home • You must be in compliance with institutional as well as Federal requirements • When you have a policy or procedural question, start at your institution - institutional requirements may be more restrictive • Read the Notice of Grant Award

6. A Few Ground Rules • Grant awards are made to institutions • Recipients of NIH grant funds must comply with all applicable Federal statutes, regulations, and policies • By drawing funds from the HHS Payment Management System, grantees agree to the terms and conditions of the grant award

7. What Does the Data Show? • Steady increase in grant related allegations since FY99 • approximately 80% of caseload • Most allegations are institutional vs. individual • Most allegations involve large universities • Problem areas include improper cost allocation/cost transfers, time and effort reporting issues, unallowable grant charges, accelerated expenditures and large unobligated balances

8. Common Contributors to Compliance Problems • Inadequate resources • Roles and responsibilities of institutional/Federal staff not clearly defined or understood • Outdated or nonexistent policies and procedures

9. Common Contributors to Compliance Problems • Inadequate staff training and education • Inadequate management systems (e.g., effort reporting, financial management) • Perception that internal control systems are not necessary

10. Compliance Basics • Don’t wait for a catastrophe to start thinking about compliance! • Establish compliance as an institutional expectation and responsibility • formalize compliance function • renew institutional commitment to compliance • Establish an expectation of “zero tolerance” • mechanism for concerns to be heard • Define roles and responsibilities and communicate them • the PI is part of the solution

11. Compliance Basics • Develop policies and procedures • Write them down and make them accessible • revisit source documents and stay current • keep forms simple • give attention to the detail of implementation • define roles and responsibilities • Assign oversight responsibility • responsibility = authority • include in policies and process

12. Compliance Basics • Develop a continuing training program for new and existing staff • Yes, you can train a PI • evaluate content and effectiveness • Management systems should be driven by policy • oversight mechanism • they should provide reliable and current information

13. Compliance Basics • Perform risk assessments and implement appropriate internal controls • focus on high-risk events • periodically test for effectiveness and reevaluate • Utilize internal audit • keep your finger on the pulse • problems are an educational opportunity • input on policies and procedures • Communicate • discussion groups, brown bags, staff sessions, emails, newsletters, one-on-one meetings (auditors are our friends)

14. NIH Proactive Compliance Site Visits Objective • Move from reactive noncompliance to proactive compliance Purpose • To assess the level of understanding of certain Federal/NIH requirements • To assist in ensuring compliance with NIH requirements • To minimize/eliminate incidents of noncompliance

15. Proactive Compliance Site Visit Summary: FY2000-FY2002 26 institutions: 20 universities/medical schools 4 non-profits (3 AIRI institutions) 2 hospital Geographic diversity Expanded education-outreach seminar

16. NIH Proactive Compliance Site Visits: Outcome Proactive Compliance Site Visits: A Compendium Subject matter focus Regulations/policies/guidelines Summary observations Examples of compliance in action Available on Grants Compliance and Oversight page http://grants.nih.gov/grants/compliance/compliance.htm Newly updated

17. Important Information • OMB Circulars (A-110/A-21/A-122/A-133) • HHS regulations (45 CFR Part 74 or 92 and 42 CFR Part 52) • NIH Grants Policy Statement • Notice of Grant Award/special terms and conditions • Institutional policies

18. NIH Actions: Objective • To ensure continued progress on current and future NIH-supported research activities while minimizing risks to Federal funds

19. NIH Actions • Technical assistance • Conduct collaborative education and training • High-risk designation • Engage institution in cooperative and interactive relationship in implementing corrective actions (Corrective Action Plan) • address problem areas • increase oversight

20. NIH Actions • Special terms and conditions of awards • Loss of carryover authority • Cost disallowances • Suspension/termination of award • Improved Systems and Policies

21. Some Useful Websites • Grants Page/OER homepage: http://grants.nih.gov/grants/oer.htm • Grants Policy: http://grants.nih.gov/grants/policy/policy.htm • NIH Grants Policy Statement (3/01) http://grants1.nih.gov/grants/policy/nihgps_2001/ • NIH Guide for Grants and Contracts: http://grants.nih.gov/grants/guide/index.html • OMB Circulars: www.whitehouse.gov/omb/circulars/

22. Parting Thoughts • Mutual need to assure compliance • Mutual need to implement proactive compliance measures • Collaborative relationship -- NIH and grantees are partners and stewards • You can make a difference no matter where you are in the organization • Compliance is everyone’s responsibility

23. Questions? Diane Dean deand@od.nih.gov 301-435-0949

24. Enforcement: Correcting Problems Retroactively

25. Common Complaints • Human subjects protection • Animal welfare • Research misconduct • Financial mismanagement • Grants administration

26. Human Subjects Protection • Informed consent procedures may be inadequate/ patients may not be properly informed of the risks and benefits of participating in a clinical trial • Researchers may be putting patients into clinical trials when the patients should not participate in that particular research project

27. Human Subjects Protection • The Institutional Review Board (IRB) may fail to properly review a research proposal, may be keeping inadequate records of its review, or holding meetings without proper attendance and/or preparation • Researchers are not reporting adverse affects of investigational drugs used on clinical trials to the Food and Drug Administration (FDA) or failing to obtain permission from the FDA to commercialize a product

28. Animal Welfare • Animal care practices or protections may not be adequate • Institutional Animal Care and Use Committee (IACUC) may not be following proper procedures for approval of animal research protocols, or may be keeping inadequate records, or holding meetings without proper attendance • Significant problems with animal care and use not being appropriately reported

29. Research Misconduct • Researchers falsifying or fabricating research data in laboratory notebooks, grant applications, progress reports to NIH, publications, patent applications • Plagiarism by researchers

30. Financial Mismanagement • Researchers and/or administrative staff incorrectly reporting time and effort that researchers spend on grants • Failing to report program income earned from projects supported with grant funds • Researchers being paid with grant funds when they are not working on the project

31. Financial Mismanagement • Research grant funds used for activities that are not part of the project • Improper accounting of overhead costs • Improper transfers of funds across research projects • Failure to report financial conflicts of interest, or other research support

32. Grants Administration • Lack of institutional oversight of principal investigators • Unclear designation, understanding of roles and responsibilities of researchers and administrators • Lack of training in and understanding of compliance issues • Widespread financial problems • Failure to properly monitor and keep track of expenditures, time and effort, and other compliance requirements

33. Who You Will Hear From and What They Will Do

34. HHS Office for Human Research Protections (OHRP) • Formerly the Office for Prevention from Research Risks (OPRR) • Conduct investigations • Contact you for additional information • Conduct site visits and interview staff

35. HHS Office for Human Research Protections (OHRP)Possible Actions • Restrict your “assurance” which will require increased oversight, monitoring, and reporting for particular projects • Suspend an assurance for all or part of an institution, preventing some or all research on patients from continuing until corrective actions have been taken as specified by the OHRP

36. HHS Office for Human Research Protections (OHRP)Possible Corrective Actions • Changing the structure of the IRB and the way it does business • Re-reviewing research protocols that the IRB has previously approved • Seeking additional informed consent from patients who participate in research

37. Food and Drug Administration (FDA)Possible Actions • Suspending a research project or all research at an institution • Withdrawing a researcher’s authorization to use an investigational drug, preventing the researcher from conducting any research regulated by the FDA

38. NIH Office of Laboratory Animal Welfare (OLAW) • Conduct investigations • Contact you for additional information • Conduct site visits and interview staff

39. NIH Office of Laboratory Animal Welfare (OLAW)Possible Actions • Restrict your “assurance” which will require increased oversight, monitoring, and reporting for particular projects involving laboratory animals • Suspend an assurance for all or part of an institution, preventing some or all research on animals from continuing until corrective actions have been taken as specified by OLAW

40. NIH Office of Laboratory Animal Welfare (OLAW)Possible Corrective Actions • Changing the structure of the IACUC and the way it does business • Re-reviewing research protocols that the IACUC has previously approved • Requiring changes in laboratory animal care and research practices

41. HHS Office of Research Integrity (ORI) • Reviews investigations of research misconduct conducted by the institution • May ask for further information or further investigation • Recommends a finding to the Office of the Assistant Secretary for Health, HHS

42. HHS Office of Research Integrity (ORI)Possible Actions • Increased supervision • Ineligibility to serve in any advisory role to the Department • Debarment from eligibility for federal funding, (i.e., the researcher cannot receive any Federal funding for a specified period)

43. Possible NIH Actions Based on ORI Findings • Recover grant funds that have been awarded to a researcher who has been found to have committed research misconduct • Require a new principal investigator or new key personnel work on the project

44. NIH Office of Management Assessment (OMA) and HHS Office of the Inspector General (OIG) • Conduct investigations • Ask for, or subpoena, information • Conduct audits/reviews • Interview staff

45. OMA and OIG Possible Actions • Recommend action against institutions or individuals • Recommend that current research grant funds be restricted, suspended, or terminated • Recommend that funds previously awarded be recovered by the NIH • Recommend that individual researchers (or even institutions) be debarred

46. NIH Office of Policy for Extramural Research Administration (OPERA) • Will ask for information • Make site visits to interview staff and determine if policies are being implemented and understood

47. OPERAPossible Actions • Recommend that NIH impose special conditions on all or some grants • Designate all or part of an institution as “high risk” • Require a corrective action plan to remedy identified problems in grant administration

48. OPERAPossible Corrective Actions • Establishing policies for roles and responsibilities • Additional training and education • Code of conduct for staff • Increased reporting requirements

49. And What About Litigation? • Any of the human subjects, animal welfare, financial, or research problems discussed, and others, can be referred to the Department of Justice (DOJ) for legal action by the agency or by an individual at your institution (qui tam actions) • The DOJ works with the Office of the General Counsel (OGC) at DHHS, and with the OIG to investigate and litigate cases

50. Department of Justice • Determine if civil or criminal action is justified based on the False Claims Act or other applicable statutes, and/or common law theories • Seek to recover money, up to three times the amount misspent, and corrective actions • Litigate, and, when appropriate, negotiate settlement