2025: Time For Evidencing Compliance Program Evaluation
The beginning of a new year is the best time to take stock of the compliance program. Results can be used in the work plan to make enhancements of operations. Both the Office of Inspector General (OIG) and Department of Justice (DOJ) have stressed that all compliance programs are works in process, never completed, and must respond to the ever-changing legal, regulatory, and business environment. They believe the best way to ensure continual improvement is to periodically engage outside experts to evaluate the program. The OIG Compliance Guidance makes clear that a Compliance Officer, like any program manager, is responsible for ongoing monitoring of their program, but independent evaluation must be performed by those who are “independent” of the compliance office in order to provide convincing “evidence” of the results. The DOJ’s “Compliance Program Effectiveness Evaluation Guidelines” ask many questions about this, including whether the company evaluates periodically the effectiveness of the organization’s compliance program. There are three basic methods to consider when desiring to obtain independent and objective results: (1) complete compliance program evaluation, (2) compliance program gap analysis, and (3) employee compliance knowledge or culture survey.
- Compliance Program Effectiveness Evaluations, by recognized experts, is by far the best method to evidence how well the program is functioning. It focuses not only on the outputs of the program but also evidence of effectiveness (outcome) with a 360-degree evaluation that includes: (a) detailed review and analysis of all compliance-related documents (e.g., committee charters and minutes, Code of Conduct, and compliance policies and procedures); (b) review and testing of compliance-related operations and functions; and (c) interviews of Board members, executives, selective key staff, and focus group meetings.
- Compliance Program Gap Analysis is primarily a document “checklist” review by experts, focusing on output metrics, rather than outcomes related to program effectiveness. It can be done at a far lower cost than a full compliance program evaluation, but the reduction in costs is matched by the diminished value of results. A Gap Analysis is best used with organizations with new or incomplete programs, desiring assistance in identifying elements needed to complete development of their program. It can identify gaps for inexperienced compliance officers along with suggestions for addressing them.
- Compliance Program Surveys provide a means to test employee knowledge, understanding, and attitudes of the compliance program. An independently developed and administered survey can be performed at a fraction of the cost of other methods. The highest-value surveys are those anchored in a large database that permit benchmarking of compliance program effectiveness against the universe of users. Employee compliance surveys have long been advocated by regulatory bodies, including the Federal Sentencing Guidelines. The OIG Compliance Guidance documents advise using surveys of employees to gauge how well the program is functioning. There are two types of compliance surveys. Compliance knowledge surveys test knowledge and understanding of the compliance program structure and operations. Compliance culture surveys provide information on employee attitudes and perceptions regarding the organization’s compliance program that is useful in measuring the extent to which individuals, coworkers, supervisors, and leaders demonstrate commitment to compliance. Both types of surveys should be considered, 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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