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Consulting for compliance redesign costs roughly $507K

Ohio State’s Board of Trustees have said since July there was a need for a review of university-wide compliance, and it came at a price of more than $500,000.

The Audit and Compliance Committee hired two outside consultants for a review of the compliance of the university. The committee hired Protiviti, a business-consulting firm from Menlo Park, Calif., for $226,950, according to the Office of Business and Finance.

The committee also hired a New York-based law firm, Dewey and LeBoeuf. Leslie Flesch, associate vice president in the Office of Business and Finance said the invoices were not yet processed, but payment is expected to be $280,000.

Through months of an internal review, advising, research and roughly $507,000, the idea for the Office of University Compliance and Integrity was created.

Geoff Chatas, the university’s chief financial officer, said the original plan was to hire one consulting firm for the project, but upon further review, the decision was made to hire two firms.

“It became quite clear when we looked at the task at hand — which is looking at the organization of compliance, the process of compliance and then the legal process around compliance — that we needed two areas of expertise,” Chatas said at a September Board of Trustees meeting.

Chatas said both firms had experience in the areas they needed. The OUCI will cover university-wide compliance including athletic compliance, medical compliance, research compliance and financial aid compliance.

“Protiviti has actually worked in higher education extensively. It has higher education practice and they have actually been working in helping us in our financial aid compliance,” Chatas said. “Dewey, similarly, has had significant experience in the legal process of compliance … the experience they both had in the areas of health care, the student financial aid side, of research, and then of athletics, these two firms had the partners who had the experience in those areas quite strongly.”

Bud Ellis, a partner in the law firm Dewey and LeBoeuf, said at the February Board of Trustees meeting that one chief compliance and integrity officer will head the OUCI.

“(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,” Ellis said. “It would have, on a day-to-day basis, dual reporting to the Office of Business and Finance and Legal Affairs.”

Ellis said the office would retain personnel and hire additional staff. When the office is created, additional resources will incur more costs for the project.

“The existing compliance personnel and some additional staff would report to the chief compliance and integrity officer,” Ellis said. “This would ensure direct reporting and clear lines of communication.”

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 on Feb. 6. “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.”

Although the need for the OUCI was in response to a public failure in athletic compliance involving former coach Jim Tressel playing ineligible players, the office will deal with university-wide compliance issues.

Audit and Compliance Committee chairman Robert Schottenstein said in a July meeting this was an opportunity to improve on all levels of compliance.

“This process, which we fully embrace as an opportunity to get better, was actually triggered by the problems in our football program that first surfaced late (2010),” Schottenstein said.

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