Kusserow’s Corner: Using Designated Compliance Officers

Over the last few years, there has been growth in the use of Interim and Designated Compliance Officers. In most cases, these are outside consultants brought in to operate and/or manage an organization’s compliance program. The use of Designated Compliance Officers (DCOs) has been recognized as an alternative by the HHS Office of Inspector General (OIG). The OIG noted in its Compliance Program Guidance that, “For those companies that have limited resources, the compliance function could be outsourced to an expert in compliance.” As such, DCOs can be a part time but permanent alternative to a W-2 employee Compliance Officer.

There are many reasons an organization may consider using an Interim Compliance Officer (ICO), instead of a W-2 full time employee, such as:

  • An event may trigger the need for a compliance expert to manage the problem.
  • A Compliance Officer leaving may lead to revaluating the needs of the organization.
  • A government investigation or imposition of a corporate integrity agreement (CIA) may result in the use of ICOs.
  • Executive leadership may wish to use a proven expert to enhance the program.
  • Organizations decide a part time ICO may be less costly that a full time employee.

The contract should define not only the work of managing the compliance program, but offer added value by providing:

  • Independence and objectivity without any preconceived notions about personnel or programs, or any investment in prior decisions and actions.
  • An independent evaluation of the status of the program’s effectiveness.
  • A broader perspective of having worked in a variety of program settings and having experience with proven methods.
  • Experience in working with a variety of executive leadership and Boards.
  • Authority in building confidence in enhancing the compliance program and culture.
  • Experience and detailed knowledge of Federal and State laws and regulations.
  • Establishing metrics to evidence compliance program effectiveness.

Needless to note in selecting an ICO, it is extremely important to be sure they are properly qualified. This means they should have multiple levels of experience you can draw upon, not just having served as a compliance officer in another organization where it may or not have been a model program.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.