Kusserow on Compliance: Ongoing auditing and monitoring of high risk areas—16 tips for compliance officers

By Steve Forman, CPA

In its various guidance documents, the OIG has repeated stressed the importance of ongoing monitoring and auditing of high-risk areas, yet there remains considerable confusion regarding the differences between the two; and who has responsibility for them. The following addresses this issue and provide tips for consideration by compliance officers in meeting the challenge of this key compliance program element.

Ongoing monitoring

Ongoing monitoring is a program manager’s responsibility, not the compliance officer’s. It entails establishing and maintaining controls and metrics to determine on a continuous basis whether operations comply with established policies, procedures, regulations or laws and whether significant risks are being adequately addressed and mitigated. This includes keeping current with changes in rules, regulations, and applicable laws; developing internal controls, policies, and procedures to comply with them; training staff on these rules; and taking active steps in monitoring or verifying compliance with these new guidelines. Ongoing monitoring should be designed to test for inconsistencies, duplication, errors, policy violations, missing approvals, incomplete data, dollar or volume limit errors, or other possible breakdowns in internal controls. Monitoring techniques may include sampling protocols that permit program managers to identify and review variations from an established baseline.

Ongoing auditing

Ongoing auditing is reviewing the ongoing monitoring process. In essence, it is a spot check. The review must be independent and objective, which means that it should be done by people external to the program area being audited. The compliance office, internal or external audits, other program managers, outside consultants, or any combination thereof can be used to conduct ongoing auditing. The objective of the audit should be to verify that program managers are properly carrying out their monitoring responsibilities and to recommend where internal control mechanisms can be improved. This includes confirming that controls are in place and functioning as they were intended or identifying weaknesses in the program that need to be addressed. In any case, the compliance officer should ensure that both the monitoring and auditing is taking place and doing what it should be doing. The compliance officer should also verify that corrective actions taken as a result of audits are timely, effective, and sustainable.  This should also be an ongoing focus of any management level compliance committee or board level compliance committee.

Tips: 16 Questions for compliance officers

  1. Has a compliance audit plan been developed to verify that ongoing monitoring and auditing are addressing compliance high-risk areas?
  2. Have program managers identified and listed all compliance high-risks areas related to their operational areas? Many such risks are found in the OIG guidance, work-plans, fraud alerts, advisory opinions, audits, and enforcement priorities. In addition it is useful to monitor Medicare contractor activities (e.g. RACs, ZPICs, etc.), industry news, PERM reports, and PEPPER data, etc.
  3. Are program managers engaged in assessing high-risk areas within their operations?
  4. Are high-risk areas ranked in terms of level of risk, probability of risk exposure, and impact or damage from a risk area?
  5. Do you also consider high impact, low probability risks?
  6. Have program managers developed and implemented monitoring plans to address all identified risk areas?
  7. Are all compliance risks areas being tested and reviewed on an ongoing basis?
  8. Is there priority given to address areas of highest risk?
  9. Have program managers calculated the potential damage for a risk failure, including the potential scale of direct and indirect financial consequences (i.e., liability, penalties, etc.), as well as whether they have established the likelihood of a risk event, taking into consideration whether the area is a current enforcement priority (e.g., improper physician arrangements)?
  10. Does ongoing auditing verify monitoring by program managers is taking place to addresses adequacy of the internal controls (e.g. policies/procedures) to reduce likelihood of that an unwanted event will occur in high risk areas?
  11. Has ongoing auditing validated that ongoing monitoring is effective in achieving the desired objectives?
  12. Have corrective action plans have been instituted for all risk area deficiencies identified by ongoing monitoring or auditing?
  13. Is there a process by which corrective action measures taken are working as intended?
  14. Are results of monitoring and auditing included as regular agenda items for management and board level compliance committees?
  15. Have compliance experts been engaged to independently evaluate the effectiveness of a compliance program, inasmuch as the OIG identifies it as a program that should be part of ongoing auditing. Place special emphasis in the scope of work on reviewing whether high-risk areas are being properly addressed.
  16. Do you periodically evaluate that effectiveness of the risk assessment program?


Steve Forman, CPA is the Senior Vice President 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. His comments in this blog reflect experience of over 35 years, having served as Director of Management Operations for the OIG, 10 years as VP for Audit and Compliance for a major health system, and as a compliance consultant for many healthcare organizations. Mr. Forman has published widely on this subject.


Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of SM.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.