Create Compliance Plans (as appeared in Times Herald Record www.recordonline.com October 18, 2011 Business Section

by Michael A. Smith

The final business quarter of the year is upon us.  Yes, summer is over, and during the remaining three and half months of the year, many firms, small to large, are preparing their budgets for next year.  Companies are also conducting year-end assessments to see how they are to finish up for this current year.  Among the reviews are financials, sales, operations and, the latest one on the block, compliance or integrity programs.

Less than 7 years ago, doing corporate compliance plan reviews, known as assessments, were a rare occurrence.   Today, many businesses that receive direct or indirect  funding or re-imbursements from federal or state agencies need to have compliance plans.  Why?  If a firm is to continue to receive government payments, it is imperative to have a very visible plan or it can find itself under government scrutiny with penalties and fines close behind.  The government wants confirmation – to be shown – that your business is adhering to their 7 elements, on the federal side, and the 8 elements of New York State.

In conducting a corporate compliance assessment, it is critical to look at the progress of your program.  How effective is it?  Do your workers know about it?  How many call or cases did you have versus the year before? In reviewing a company compliance plan, ask yourself questions such as:

Review Dates: at the minimum, the plan needs to be reviewed annually and in writing.

• Reality Check:  do company policies and procedures reflect current practices or are they outdated.
• Accessibility: is the program easily available to all employees, management, staff, board, vendors and the like.
• Easily Understood: are the codes of conduct, policies, etc. easily understood by each employee.
• Office Contact: does the employee know how to contact the compliance office and where it is located.
• Taking Stock: how many calls to the compliance office were made during the year?  Are there trends or patterns taking hold as to subject matter, issues or complaints?
• Productivity: has the compliance program generated efficiencies as to reporting, consolidating policies, saving money, detecting fraud, waste and abuse.

The assessment needs not to be lengthy.  Look for quality and the issues at hand with solutions.  Review the negatives and positives so you can honestly see the information provided.  Have employee or vendor situations, which occurred during the year, challenge the company’s policies and procedures and caused new operating methods or procedures?  Was the firm at risk with any potential fines and penalties?

The Compliance plan is unique in that its focus is primarily as an independent watchdog of the company with full support of its leaders, whether the firm is private, public, non-profit, for-profit, large or small.  If the support is not there in earnest, it will eventually show itself and begin the cycle of state and federal investigations, lose lower insurance premiums and being able to negotiate lower fines.

Compliance programs are constantly changing due to the steady stream of new government laws and regulations.  It must be committed by management and employees alike and represent the activities and concerns of the company so it can be productive, efficient and effective.

Michael A. Smith is a credentialed Certified Compliance Executive.  He is a Senior Advisor and Consultant with the Compliance Resource Group, Inc., and lives in Orange County.  Mike has served as a compliance executive in the healthcare and defense industries and can be reached at 914-850-6159 or visit his website at www.corporatecomplianceplans.com