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Compliance office created to improve integrity at Ohio State

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After several months of planning and discussing a university-wide compliance program, Ohio State will create a new office called the Office of University Compliance and Integrity.

Friday, the Ohio State Board of Trustees unanimously approved the plan, which was sparked after a year-long NCAA investigation into the university’s Athletic Department, including compliance.

Bud Ellis, a partner in the law firm Dewey and LeBoeuf, advised the board on the matter. Ellis said the OUCI will be headed by one chief compliance and integrity officer, and all current and new integrity officers will report to that person in addition to their current supervisors. The chief, in turn, will report to senior leadership and existing offices involved with compliance.

“(The chief officer) would have direct reporting to senior leadership at the university, in particular you have direct reporting to this (audit and compliance) committee, and it would have, on a day-to-day basis, dual reporting to the Office of Business and Finance and Legal Affairs,” Ellis said. “The existing compliance personnel and some additional staff would report to the chief compliance and integrity officer. This would ensure direct reporting and clear lines of communication.”

Other recommendations include creating an enterprise-wide compliance and risk-assessment methodology, so the office can properly allocate resources. This would hopefully create a university-wide code of conduct in addition to the existing code of ethics and sporadic departmental use of various codes of conduct and a student code of conduct. It would also hopefully establish a consistent methodology for compliance training.

Compliance is mostly separated into three divisions: athletic compliance, Medical Center compliance and research compliance. Each area focuses on different goals and legal requirements.

It was stressed that after an independent research company, Protiviti, studied compliance programs of other universities, specifically Big Ten schools and non-university compliance programs, it was clear that OSU was on par or better in most areas of compliance, and nowhere was it completely lacking.

President E. Gordon Gee said the athletic compliance issues were the most public, but the university is most vulnerable with medical compliance.

“The biggest vulnerability that we have with compliance is in our hospitals,” Gee told The Lantern. “The compliance in athletics is more public perception. If you spend a certain amount of your budget on athletics and it gets 90 percent of the airtime. So it’s a perception that you want to get that right … The notion of having a centralized compliance system is that we have a filter that is constantly looking at our overall compliance.”

The probe was first initiated after the football program’s scandal involving players receiving improper benefits and ending with the resignation of former coach Jim Tressel.

“At the time it was the view of focus for the board and the audit committee, supported whole-heartedly by the entire university family including our president, administration and athletic department to use that incident as an opportunity to take a hard look inward at our processes, which we felt were good but we wanted to look at them and see if we could make them better,” said Robert Schottenstein, chairman of the audit committee.

Geoff Chatas, senior vice president and chief financial officer, said scandals at other universities were not a factor in the internal investigation. He said there will be additional costs to implement this plan but that it will be worth it.

“Part of what they’re looking at in their recommendations is implementing this new, kind of best-in-class compliance system,” Chatas said. “So yeah, there will be some costs for systems and people, but when you try to put a value on our reputation, and compliance function in general, it should be beneficial to the university.”

Susan Alexander, a member of Protiviti who presented research to the Audit and Compliance Committee, said the board told her their expectations for the research and new plans were high.

“The intent was for compliance to be a model among higher education, but also to be a world-class compliance program,” she said.

Research conducted by Protiviti also found many OSU compliance personnel are industry leaders, and there are a lot of dedicated resources for compliance including the Audit and Compliance Committee. There is monitoring in 12 areas, which is fairly typical. OSU has an anonymous reporting line and has mostly informal processes to track compliance requirements, but an informal process is normal among universities.

Schottenstein said the plan would take about a year to finish outlining and implementing, and it might change as new issues arise.

“Let me make real clear that we’re still at the beginning, and if this architecture is approved today, we will then undertake the next 12 or so months construction, and there may be a little remolding and a few change orders along the way, but I think we have a very strong design,” he said.

Gee made it clear this is “not auditors auditing auditors.”

“It can be easy to create another layer in the system,” he said. “(It’s) not another compliance issue, it’s a new way to think about things.”

Kelsie Ozamiz contributed to this story.

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