THE ENRON EFFECT:
ACCOUNTABILITY IN HIGHER EDUCATION GOVERNANCE AND BUSINESS
PRACTICES
EXAMPLES OF POLICIES AND PROCEDURES THAT
FURTHER A “CONTROL ENVIRONMENT”
June 27 – June 30, 2007
Tobey Oxholm
Drexel University
Philadelphia, PA
1. Board Conflicts Policies and Disclosures
a. By Laws (excerpt)……………………………………………….
b. Annual Conflicts of Interest Disclosure…………………………
c. Form 990 Disclosures……………………………………………
d. Audit Committee Charter (excerpt) and Meeting Checklist……..
2. Employee Disclosures
a. Introduction to Annual Disclosure Process (website)……………
b. Questions…………………………………………………………
3. Disclosure Obligations of Outside Counsel ……………………………..
4. Best practices – Acquisitions, Investments, Improvements
a. Signature authority……………………………………………….
b. Procurement Policy………………………………………………
c. Investment Policy………………………………………………..
d. Competitive Bidding Policies and Procedures…………………..
e. Capital Improvements Review and Approval Policy……………
f. Contract Protocol…………………………………………………
5. Record Retention: Policy and Matrix……………………………………
6. Codes of Conduct
a. Treasury Office…………………………………………………..
b. Institutional Advancement……………………………………….
7. Hotlines
a. Announcement……………………………..…………………….
b. Policy…………………………………………………………….
2
3
5
6
9
10
12
13
14
14
15
18
21
22
32
33
42
43
1
DREXEL UNIVERSITY
BYLAWS
ARTICLE X
Conflicts of Interest
A Trustee shall be considered to have a conflict of interest if: (a) such Trustee has existing or
potential financial or other interests which impair or might reasonably appear to impair such Trustee's
independent, unbiased judgment in the discharge of his or her responsibilities to the University (which for
the purposes of this Article shall include any of its subsidiaries or affiliates) or (b) such Trustee is aware
that a member of his/her family (which for purposes of this Article shall be a spouse, parents, siblings,
children, and any other relative if the latter reside in the same household as the Trustee), or any organization
in which such Trustee (or member of his or her family) is an officer, director, employee, member, partner,
or Trustee, or has a controlling interest, has such existing or potential financial or other interests. All
Trustees shall avoid such actual or possible conflicts of interest, and disclose to the Board any possible
conflict of interest at the earliest practicable time. No Trustee shall speak on any matter under consideration
at a Board or Committee meeting without first disclosing the actual or possible conflict of interest; and no
Trustee shall vote on any matter in which there is or could be a conflict of interest. The minutes of such
meeting shall reflect that a disclosure was made and that the Trustee abstained from voting. Any Trustee
who is uncertain whether a conflict of interest may exist in any matter may request the Board or Committee
to resolve the questions by majority vote.
All Trustees shall preserve and protect the confidentiality of all private and proprietary
information concerning the University. Such information shall be used exclusively for the benefit of the
University, and never for the benefit of the Trustee, the Trustee’s family or business, or any entity or
person whose interests are or might be adverse to those of the University.
2
Office of the General Counsel
Memorandum
To:
All Members, Board of Trustees
Cc:
Constantine Papadakis, Ph.D., President
From:
Carl Oxholm III, Secretary
Date:
September 1, 2006
By Board policy, all Trustees must complete conflict of interest forms every September. Further,
the Code of Conduct adopted by the Board of Trustees in December 2003 requires an annual
acknowledgement. Accordingly, I have enclosed materials relating to those obligations. The
Code of Conduct is available on the Drexel website (the address appears on the enclosed papers);
please let me know if you need to have a hardcopy sent to you.
It would be most helpful if you would please return your signed forms via fax (215-895-1411)
before the Board’s next meeting, which will take place on Wednesday, September 27, at 8:30
a.m. in the A.J. Drexel Picture Gallery, Third Floor Main Building.
Please call me if you have any questions about these forms or this process.
3
Drexel University Board of Trustees
Annual Code of Conduct Certification and
Conflict of Interest Disclosure Statement
September 2006
{Words in bold are defined on the next page}
1.
Please list all organizations in which you or any of your associates currently has an
interest as officer, director, partner, employee, owner, or controlling stockholder
(i.e., an interest of 5% or more). {If “none”, please so state.}
2.
Please identify any commercial relationships or transactions involving the
University and any of the organizations listed above that existed or transpired,
or which were negotiated or arranged, at any time after June 30, 2005 to date. {If
“none”, please so state.}
I HEREBY CERTIFY that the information set forth above is correct to the best of my
knowledge, information and belief. I understand that I must promptly advise the
Secretary and the Chair of the Board of any change in this information.
I HEREBY CERTIFY that I have read the University’s Code of Conduct and
understand my obligation to comply with it.
Name [print]:____________________ Signature:_______________________
Date: ___________________
Please return to:
Secretary, Board of Trustees
The “University’s Code of Conduct” may be found on-line at the following website:
http://www.drexel.edu/hr/policies/OGC5.pdf’
4
Office of the General Counsel
Re:
New IRS Reporting Requirements for Non-Profits
To All Trustees:
As a result of changes in the tax laws, the Form 990 which we must complete asks a new question that
requires us to seek confirmation from you. The question asks:
Are any officers, directors, trustees, or key employees listed in Form 990 Part V-A, or highest
compensated employees listed in Schedule A, Part I, or highest compensated professional and
other independent contractors listed in Schedule A, Part II-A or II-B, related to each other
through family or business relationships? If “Yes”, attach a statement that identifies the
individuals and explains the relationships.
This question asks for information pertaining to Fiscal Year 2006. With respect to whether you have any
“family relationship” with any officer, trustee, key employee, or vendor, the term includes:
An individual’s spouse, ancestors, children, grandchildren, great-grandchildren, siblings (whether
by whole or half blood) and the spouses of children, grandchildren, great-grandchildren, and
siblings.
With respect to whether you have any “business relationship” with any officer, trustee, key employee, or
vendor, the term includes (a) receiving compensation of any kind, (b) employment, (c) any other contractual
relationship, or (b) holding (directly or indirectly) 50% or more of the voting power in the business, profits
interest in a partnership, or beneficial interest in a trust.
Summarized, the tax form asks whether (during the period July 1, 2005 through June 30, 2006) any Trustee
had a family relationship or a business relationship with any trustee, officer, key employee, or major
vendor. We have attached lists of these different groups for your ease of reference.
We have reviewed the Conflict of Interest Disclosure Form that you have submitted, and because no such
relationship is disclosed, we are prepared to certify that you have no such relationship. If you do,
however, it is imperative that you disclose it to me immediately in writing, and no later than December
31. Failure to disclose such a relationship can lead to penalties imposed on the University or even threaten
Drexel’s tax-exempt status.
Thank you very much for your consideration of this matter. Please call me if you have any questions, and
let me know of any potential reason for disclosure at your earliest convenience.
5
DREXEL UNIVERSITY
BOARD OF TRUSTEES
AUDIT COMMITTEE CHARTER
The primary function of the Audit Committee is to assist the Board of Trustees in its oversight
responsibilities. The Committee's principal activities will include:







A.
Oversight of the University’s business risk assessment;
Oversight of the University’s grant activity;
Oversight of the University's internal control structure;
Review of the Internal Audit Department;
Selection and retention of independent auditors;
Review of the annual audit plan; and
Oversight of the University's financial reporting.
Oversight of the University's Internal Control Structure
Internal control is defined by the Committee of Sponsoring Organizations (COSO) of the Treadway
Commission in its report: Internal Control- Integrated Framework as follows:
Internal control is "a process, effected by an entity's board of directors, management, and other
personnel, designed to provide reasonable assurance regarding the achievement of objectives in
the following categories:
 Effectiveness and efficiency of operations.
 Reliability of financial reporting.
 Compliance with applicable laws and regulations."
The Audit Committee will:
* * *.
3.
Review the University's Code of Conduct and conflict of interest policy and the
University's monitoring of their compliance.
***
I.
Other
1.
The Audit Committee shall have the power to conduct or authorize investigations into
matters involving errors and irregularities or any other matters within the Committee's
scope of responsibilities. The Committee shall be empowered to retain independent
counsel, accountants, or others to assist it in the conduct of investigations.
2.
In discharging its oversight role, the Committee is empowered to investigate any matter
brought to its attention with full access to all books, records, facilities, and personnel of
the University and the power to retain outside counsel, or other experts for this purpose.
6
DREXEL UNIVERSITY AUDIT COMMITTEE –
MEETINGS CHECKLIST
AUDIT COMMITTEE ACTIVITIES:
Year End Financial Reviews:
Review Annual Financial Statements
Review significant accounting/reporting issues/critical policies
underlying statements
Review with independent auditor scope and results of audit; all
communications as required by SAS 61
Resolve differences between Management and Independent
Auditor regarding financial reporting
Sept
Dec
Feb
May
Charter
Reference
X
D1
X
D.1
X
D.2
X
D.4
Legal Compliance:
Review legal matters that may have a material impact on the
University's financial statements, and any material reports or
inquiries from regulatory or governmental agencies
X
X
X
X
D.3, I.2
Review and assess adequacy of Audit Committee Charter
Propose any changes to charter to Board of Trustees for
approval
X
H.1
X
H.1
Review Committee Members' qualifications and independence
X
E
Governance:
Independent Auditor:
Review the independence and performance of the independent
auditor
Review formal statement from the independent auditor describing
all relationships with the University and other matters as required
Review and Approve the Engagement Letter
X
C.3
X
C.4
C.1
X
Pre-approve any non-auditing services of independent auditor
As required
C.2
Pre-approve independent auditor's non-audit services and
disclose to Board of Trustees. Include in University's annual
report.
As required
C.2
Review Annual Audit Plan
Review Annual Audited Financial Reports provided by
independent auditor
In addition to the annual financial report, review the following
reports:
A-133
RRG
X
X
C.1
D.2
X
X
7
Internal Audit Function:
Receive update on Internal Audit activities-reports and other
work, review significant findings and management's responses
X
Review compensation for Internal Audit
X
X
X
X
B.1,3
B.1
Review Internal Audit Annual Plan
X
B.2
Review Internal Audit's resources and budget
Assure Independence of the Director of Internal Audit
Review and Approve Internal Audit Charter as it relates to the
COM
X
X
B.1
B.1
X
X
X
B.4
Other Responsibilities:
Report Committee actions to the Board of Trustees with
appropriate recommendations
X
X
X
X
H.2, G.2
X
X
X
X
A.1
Oversight of University's Internal Control Structure including:
Review of adequacy, effectiveness of structure with
management, internal and independent auditors, and
recommendations for new or enhanced controls.
Review year-end Management Letter and Management's
Response
Review the College of Medicine's Code of Conduct and Conflict
of Interest Policy and monitor compliance
Review policies and procedures with respect to College of
Medicine Senior Management expense accounts and perquisites
and review audits of these areas.
Review operation of the College of Medicine's Compliance
Hotline
Review and approve Audit Committee Charter and Compliance
therewith.
Executive sessions
X
X
A.2
X
X
X
X
A.3
A.4
X
X
X
X
X
X
X
X
H.3,4
8
Drexel University
Annual Conflict of Interest and Commitment Disclosure Process
Introduction
All employers are entitled under the law to know that their employees are working for them
and not against them. It’s easy to understand, for example, that it wouldn’t be right if you
were working for a private company in your spare time and helping them do well by giving
them confidential information you learned at Drexel, or helping a third party obtain contracts
with Drexel in return for the gifts they were giving you. But sometimes it’s not so easy to
recognize what a conflict is, or when a relationship might make it look to someone else like
you had a conflict (which is called an “apparent conflict”).
Not all conflicts are bad; in fact, many are good. It is a good thing for Drexel employees to be
asked to serve on the boards of local corporations and non-profits, and good to be seen by
others (and paid) as consultants or experts in a field. But Drexel (and your supervisor) has
the right to know about those things, and to decide that it is good. And if there is a “bad”
conflict, or the potential of one, it’s in everyone’s interest (including yours) to make sure you
talk about it early on. That’s why it’s always a better practice to disclose something that you
are not sure whether it’s a conflict or not – you’re protected and the University is fully
informed. But if you don’t disclose it and you should have, it could be serious: you may not be
covered by our insurance if a claim is made against you, and you may be reprimanded or
even lose your job (if it’s really serious).
The Drexel University Conflict of Interest and Commitment Policy (“COI Policy”) requires all
of us to take the time to think about these things at least once each year, always at this
time, and to disclose any actual or possible conflicts of interest or commitment – things that
have occurred since the last time you filled out a disclosure form, and situations in which
you now find yourself or expect to be. It’s also part of that annual process that we remind
ourselves of the duties that all of us owe to each other, which were put together into a Code
of Conduct three years ago by a committee of faculty, staff, and administrators.
This year, the Annual Conflict of Interest Review will be accomplished by e-mail notification
to all applicable employees, and the disclosures and confirmations will be made electronically
through the DrexelOne Portal. Completion will be tracked by Banner User ID and Passwords,
and everyone is required to finish this process by December 1; if you don’t, you won’t
be able to get any merit increase you might otherwise receive starting January 1. All Senior
Vice Presidents, Vice Presidents and Deans/Directors will be advised of completion rates for
their faculty/staff members with “by name” lists provided by the Office of the General
Counsel.
If you answer “Yes” to any questionnaire item, you will be asked for details. Your completed
form will be forwarded to the appropriate Senior Vice President, Vice President, or
Dean/Directors for review and resolution, and then to the Office of General Counsel for final
approval. An employee is credited with completion when all the questions are answered and
the form is submitted. Acknowledgement of completion will be provided. All forms will be
electronically stored so that you can always check what you have disclosed, and know that it
is both accurate and current.
9
The process also requires that you review the Code of Conduct. You won’t find anything
surprising in the Code – it all makes good sense – but you may be surprised by how many
different policies, regulations, and laws govern our actions as employees of a university.
And the Code reminds us that we can easily report problems by using the anonymous
hotline.
Please remember that you must complete the Annual Conflict of Interest Review no later
than December 1. If you have any questions, please contact the Office of the General
Counsel at 215-895-2427.
The following are the four questions that each employee must answer.
ID
1
Question/Example
1) Have you accepted a gift, service or benefit of any kind from any
person who can influence the exercise of your professional judgment on
behalf of the University or related entity, which includes such entities as
API (Academic Properties Inc), Drexel E-Learning, DUCOM (Drexel
University College of Medicine), and Math Forum?
Example: In March of 2006 I received 2 tickets to the NCAA playoffs from
the XYZ firm worth approximately $1000.00.
If yes, please list and explain in detail below:
2
2) Do you or any immediate family member have any financial,
ownership, or management interest in any entity that provides
educational services, or goods or services of any kind to the University or
related entity, which includes such entities as API (Academic Properties
Inc), Drexel E-Learning, DUCOM (Drexel University College of Medicine),
and Math Forum?
Example: I have controlling interest in XYZ Corporation which is a
subcontractor under a University Grant, on which I currently conduct
research.
If yes, please list and explain in detail below:
3
3) Do you perform any consulting services for third parties outside of the
University or do you receive compensation from third parties for your
services which relate to your work for the University or to the work of the
10
University?
Example: I am teaching two courses for XYZ University as an adjunct
professor.
If yes, please list and explain in detail below:
4
4) Do you feel you have any other conflict of interest or commitment not
stated above?
Example: Vender XYZ paid for me to attend a conference in D.C. in
January worth approximately $500.00 in registration fees.
If yes, please list and explain in detail below:
11
Disclosure Obligations of Outside Counsel
{Excerpt from Engagement Letter}
If at any time you become aware of evidence of a violation of the University’s Conflict of
Interest and Commitment Policy or its Code of Conduct, or of any fiduciary duty owed to the
University, by any University trustee, officer, employee or agent, you must promptly report that
violation to the General Counsel. If that is not appropriate under the circumstances, you must
report it to the appropriate Senior Vice President or to the President. If in your view of the law
such officer does not respond appropriately to properly safeguard the interests of the University,
you must report the matter to the chair of the Audit Committee of the Board of Trustees.
Source: Section 307, Sarbanes-Oxley Act of 2002
12
Signature Authority
At the request of the President, the Finance Office, in conjunction with Internal Audit, has
developed a signature authority approval process for Drexel University. The process requires the
signature of authorized individuals for all cost centers and applies to all purchasing and accounts
payable transactions including commitments that result in a cash disbursement or binding
obligation for Drexel University. The signature authority approval process was placed into effect
on September 24, 2001.
The approval process published by the Office of Research and Graduate Studies will remain in
effect. This process requires check requests in excess of $1000 and all expenditures for
subcontracts, consulting, purchased services, equipment, computers and computing supplies,
dues and subscriptions to be forwarded to the Office of Research and Graduate Studies for
approval.
Five levels of approval authority are listed below. Authorized individuals are required to sign
purchase requisitions, check request forms or electronically approve purchases that originate
from the new purchasing card.
LEVEL I
LEVEL II
LEVEL III
LEVEL IV
LEVEL V
Up to $2,500 Cost Center Administrators
$2,501 to $25,000 Department Heads
$25,001 to $100,000 Vice Presidents, Deans, Directors
$100,001 to $250,000 Senior Vice Presidents
$250,001 and Above The President
Each signer has been provided with a list of the cost centers for which he/she has authority. The
list will be used to maintain a valid, original signature file for the Finance and Purchasing
Offices. Signers may be added or deleted using the Cost Center Request Form available on the
Comptroller's Office Web site.
13
DREXEL UNIVERSITY BOARD OF TRUSTEES
REAFFIRMATION OF PROCUREMENT POLICY
As a charitable institution exempt from taxation, Drexel University is required by law to conduct
its affairs in complete accordance with the law. As an institution of higher learning, Drexel
University is committed to conducting its affairs in complete accordance with all applicable
professional and ethical standards. To those ends, the University and its Trustees, officers, agents
and representatives are obligated to avoid conflicts of interest, and perceived conflicts of interest,
in the procurement of goods and services for the University.
It is the policy of Drexel University to enter into contracts for the purchase of goods and services
solely on the merits of each transaction. In doing so, the University will consider several factors,
including the experience, reputation and credentials of the seller; the suitability and “fit” of the
good or service to the specific need and requirements of the University; and the commercial
reasonableness of the terms. Among those suppliers who meet these objective criteria, it is also
the policy of Drexel University to do business whenever possible with those who have
established themselves as supportive of the University and its mission.
*****
DREXEL UNIVERSITY BOARD OF TRUSTEES
REAFFIRMATION OF INVESTMENT POLICY & PROCEDURE
Responsibility for management of the University’s endowment funds rests with the Board of
Trustees, which exercises that responsibility through its Investment Committee. The Investment
Committee acts to ensure that all investable assets of the University are invested properly,
appropriately, and in conformity with all laws and the requirements, if any, of the donor and the
University.
In evaluating an investment opportunity and selecting an investment manager, the Committee
evaluates managers on their absolute total return performance, their performance relative to an
appropriate index, their performance relative to their peers who manage a similar asset class, the
quarterly or annual volatility of their total returns, expense ratios, and management fees; on their
investment style, turnover, assets under management, research process, and experience level;
financial stability and ability to service the endowment funds properly.
While the Administration of the University is encouraged to provide information concerning
proposed investments and investment managers, it is the Committee that has the responsibility for
deciding which fund manager is most likely to produce the best risk adjusted returns going
forward, net of management fees and expenses, and sole authority with regard to investing the
University’s endowment funds in accordance with this policy.
14
Procurement Policy Statement
It is the policy of the University to obtain competitive bids and price quotations whenever
practical, on all purchased items. This is accomplished by negotiated pricing agreements,
soliciting requests for proposals and formal bidding procedures. Requests to vendors are
conducted in a manner that provides, to the maximum extent possible, open and free
competition.
All vendor bids and quotations are evaluated on the basis of product quality, technical
compliance with specifications, total cost and the vendor's acceptance of the University's terms
and conditions. A vendor award will be made in the best interest of the University based on
these criteria. Any and all bids and quotations may be rejected when it is in the University's best
interest to do so.
Prices secured on bids and quotations are considered confidential and should not be discussed
with vendors by University personnel.
Procurement Guidelines
IMPORTANT All purchased goods and services by the University must abide by the following
guidelines.
Orders that total up to $2,000
Each department should have access to a University issued Purchasing Card. The Purchasing
Card should be used for purchases up to $2,000. If a vendor does not accept the Purchasing
Card, contact University Procurement.
Orders in excess of $2,000 but less than or equal to $2,500
Submit a Request to Purchase form to University Procurement in person, by fax, or by interdepartmental mail. Your order will be mailed, faxed or called to the vendor within two working
days.
Orders in excess of $2,500 but less than or equal to $5,000
Submit a Request to Purchase form to University Procurement with the following additional
requirement. Along with the chosen vendor, there must be one additional verbal quotation
attached as an additional document.
Orders in excess of $5,000
Submit a Request to Purchase form to University Procurement with the following additional
requirement. Three written quotes must accompany the purchase requisition upon submittal to
University Procurement as attached additional documents.
NOTE If the department or person is not able to obtain written quotations, University
Procurement will assist in going out into the marketplace to secure the needed quotations.
15
Guidelines for Sole Sourcing and Competitive Bid Exceptions
Drexel University policy for the purchase of goods and services requires competitive bids for
purchase contracts over $2,500. However, in some circumstances competition cannot be
obtained or the situation necessitates the required number of competitive bids to be reduced.
This is true for purchases that are emergencies, unique, proprietary, available only from a
limited number of sources or a single source, or purchases designated to be compatible with
existing installation, facility, or location. If competition is reduced or not sought for a purchase
over $2,500, the department must provide a written sole source/bid exception justification memo
signed by the next level supervisor of the person authorizing the purchase. The following
information is a guide for requesting the number of competitive bids to be reduced or waived.
Sole Source
A sole source is defined as the only supplier capable of meeting University requirements within
the time available, including emergency and other situations which preclude conventional
planning and processing.
Criteria for Sole Source Purchases







One-of-a-kind The commodity or service has no competitive product and is available
from only one supplier.
Compatibility The commodity or service must match existing brand of equipment for
compatibility and is available from only one vendor.
Replacement Part The commodity is a replacement part for a specific brand of existing
equipment and is available from only one supplier.
Delivery Date Only one supplier can meet necessary delivery requirements.
Research Continuity The commodity or service must comply with established
University standards and is available from only one supplier.
Unique Design The commodity or service must meet physical design or quality
requirements and is available from only one supplier.
Emergency URGENT NEED for the item or service does not permit soliciting
competitive bids, as in cases of emergencies, disasters, etc.
Emergency Purchases
An Emergency is an urgent need for an item or service that does not permit soliciting
competitive bids. These include purchases needed to address major facility failures, damages
due to disasters, or purchases necessary to address immediate safety and security issues.
16
Sole Source/Competitive Bid Exception Justification Letters
Information from each category that applies to a sole source or competitive bid exception
purchase is required and must be included in the justification letters submitted to University
Procurement.




Reasonable Price Even though there may be good reason for a sole source or deviate
form the appropriate number of required bids, Drexel University will enter into a
purchase contract only after determining that the University will be paying reasonable
prices. Documented price comparisons, discounts off published price lists, buyers
knowledge of market, Fair Trade laws and other cost-price analyses should be used to
demonstrate that the price is reasonable.
Brand or Trade Names When only a specific brand, trade name, item, or proprietary
service will properly satisfy the requirements of the person requesting the purchase, a
description of the salient technical features that make that product or service the only
one that can fulfill his/her needs must be included.
Extenuating Circumstances Extenuating circumstances are w hen the primesponsoring agency, board, or governing law directs the purchase, or when unusual or
compelling urgency for acquiring the goods or services precludes obtaining formal
competition. In these cases documentation supporting the extenuating circumstance
claim must be included for the purchase to qualify for sole source justification or a
competitive bid exception.
Consultants Agreements for independent consulting services are subject to the
requirement for competition if the contract exceeds $2,500. If competition is not sought
the initiating department must provide written sole source justification with the request
for consultant services.
Bid Exception
Preferred Vendors
If the order exceeds $2,500, but is less than or equal to $5,000, it may be placed without
another competitive quote if the vendor is one of our Preferred Vendors. A list of vendors is
available for your reference.
Service and Maintenance
If the order exceeds $2,500, it may be placed without competitive quotes if the order is for
unique services or maintenance, and is unique to the equipment in question.
Orders Requiring Office of Research Approval
All orders with a FUND number in the 200000 range and over $1,000 must have the approval of
Research Administration before the order is processed to the vendor. An exception to the above
are orders involving subcontracts, consulting and purchased service agreements, equipment,
computers and computing supplies, dues and subscriptions, these all require Office of Research
approval, for any expenditure level. Government grants require that the purchasing guidelines of
the University be strictly followed.
17
RESOLUTION
DREXEL UNIVERSITY
BOARD OF TRUSTEES
May 21, 2003
To Establish a Capital Projects Review and Approval Policy
And To Amend the Bylaws Accordingly
Intention:
The Bylaws of Drexel University provide that the Board of Trustees are responsible for
approving “the construction of new buildings, major renovations of existing buildings, [and] the
purchase, management and sale of all land, buildings or major equipment for use of the
University.” By direction of the Board, its Finance Committee has been given responsibility for
reviewing the financial aspects of all such projects, both before they are authorized and after they
have been completed. As a result of that experience, the Finance Committee recommends that
there be adopted a Capital Projects Review and Approval Policy that would authorize the
administration to engage in any capital project costing less than one million dollars without prior
Board review, as long as the funding was available in an approved budget. If adopted, this Policy
would require prior approval from the Finance Committee and Board only of projects costing
one million dollars or more, regardless of whether the project was provided for in the budget
(which change in policy would require an amendment to the Bylaws), and before the capital
budget could be exceeded by five percent or more in any fiscal year.
The proposed Policy would also authorize the Buildings & Property Committee to act on behalf
of the Board in approving the acquisition of buildings and property within the University’s
footprint having a purchase price of less than one million dollars, without any further Board
action. This would modify the Resolution adopted in November 2002, which granted similar
authority for properties costing $400,000 or less.
This Resolution is recommended by the Finance Committee, the Buildings and Properties
Committee, and the Task Committee on Governance, Compliance and Audit.
RESOLVED, that the Board of Trustees adopts the Capital Project Review and Approval Policy
attached to this Resolution, as a Standing Resolution of this Board, and the Secretary shall file this
Resolution as provided by Article VII, Section 3 of the Bylaws; and,
FURTHER RESOLVED, that this Standing Resolution shall authorize the Buildings and
Properties Committee of the Board to approve the acquisition of any buildings or properties within
the footprint of the University having a sale price of less than one million dollars, without further
approval by the Board; and,
18
FURTHER RESOLVED, that, consistent with this Policy, the jurisdiction of the Finance
Committee is amended to require the review and approval of capital projects costing one million
dollars or more, regardless of whether the project is “provided for in the budget,” and Article IV,
Section 3, of the Bylaws (“Finance Committee”) is hereby amended to read as follows (with the
words to be deleted by this Resolution appearing in italics and bracketed):
Section 3. Finance Committee. The Finance Committee shall have general
responsibility for the financial affairs of the University, except those assigned to the Investment
Committee. It shall review annually the operating and capital budgets of the University, prepared
and presented under the direction of the President, and make recommendations to the Board of
Trustees concerning their adoption. It shall review major financial transactions [not provided for
in the budget] and shall make recommendations to the Board. The Treasurer, or his/her designee,
shall be an ex officio member of the Finance Committee without vote, and shall not be counted as
a member of the Committee for any purpose.
19
Capital Project Review and Approval Policy
The following policy applies to the review and approval by the Board of Trustees of all capital
projects to be undertaken by or for the use of the University. In particular, it applies to the
construction of new buildings, major renovations and maintenance of existing buildings, and the
purchase and sale of all land, buildings or major equipment for the University.
Capital projects shall be subject to the review of the Board of Trustees as follows:
1. Capital projects, the purchase or sale of land or buildings, purchases of equipment,
leases, and capital investment initiatives including investments in subsidiaries, in the
amount of $1 million or more, whether or not included within a budget approved by
the Board, shall require approval from the Board of Trustees following review and
approval by the Finance Committee. (The cost of leases shall be determined by their
net present value over the term of the stated lease term.) The approval process shall
include a detailed explanation of the project, an internal rate of return calculation for
the project (if applicable), and a detailed discussion about opportunity costs (e.g.,
projects that the University would have to forego in order to fund the proposed
project, savings over alternatives, etc.).
2. Capital projects, acquisitions of equipment, and leases of less than $1 million shall
not require approval from the Board of Trustees, nor by the Finance Committee.
3. The purchase or sale of all land and buildings, and the construction of all new
buildings, shall require approval by the Buildings and Property Committee of the
Board of Trustees. The Buildings and Property Committee shall be authorized on
behalf of the Board to approve the purchase or sale of real estate under $1 million,
and shall thereafter report on such transactions to the Executive Committee of the
Board.
4. If the President anticipates the need for an increase of more than five percent (5%) in
the total amount allocated for all capital improvements in an approved budget, the
requested increase should be presented to the Finance Committee and to the Board
for review and approval. The review shall include a detailed description about the
project(s) requiring additional funding, the funding source(s) for the increase(s), and
justification for the increase(s).
Any construction or maintenance project that is required to have been either reviewed by the
Committee or approved by the Board pursuant to this Policy shall be reviewed by the
Committee following completion. Such review shall include a description of the project as
originally proposed and any material modifications made to it thereafter, a comparison of
budgeted to actual costs, and a narrative explaining any material differences (increases or
decreases).
20
POLICY: CONTRACT PROTOCOL POLICY
POLICY NUMBER: OGC-3
Effective Date: July 2002
Revisions: June 2002, January 2002
Responsible Officer: Office of the General Counsel
PURPOSE:
The policy sets forth the protocol that members of the University community must follow before entering into
contracts on behalf of the University. The Policy requires the Office of General Counsel (“OGC”) to review and
approve certain types of contracts. The types of contracts that the OCG must review and the members of the
University community who are authorized to sign the contracts are outlined below.
I. SCOPE OF CONTRACTS TO BE REVIEWED
A. The following types of contracts MAY NOT be signed without review by the OGC:
1. Contracts in which the University agrees to pay in excess of $25,000 over the term of the contract;
2. Contracts involving the use of the University’s facilities;
3. Contracts involving the use of the University’s intellectual property, including trademarks and logos;
4. Contracts requiring the University to provide indemnification or insurance to an outside party;
5. Contracts in which members of the University community or third parties are engaging in high-risk activities;
6. Contracts involving the lease or purchase of real estate;
7. Contracts in which the University provides off-campus educational programs;
8. Contracts in which a member of the University community believes that the contract may expose the
University to significant risk, regardless of amount of contract; and
9. Contracts that the OGC determines require legal review.
B. The following types of contracts MAY be signed without review by the OGC.
1. Faculty appointment letters that the Provost Office issues pursuant to the approval process it has already
established; and
2. Contracts that the Office of Research and Graduate Studies enters into. Please note that contracts may
take several forms, such as letters or memoranda of understanding, leases of property or equipment, software
licenses, and letters of intent. In addition, while a contract may appear not to bind the University to financial
obligations (e.g., the contract is for services or equipment provided without charge to the University), there
may be substantial financial obligations or liabilities inherent in the arrangement (e.g., indemnification and
insurance obligations in the event of an injury to persons or damage to property). Therefore, in determining
whether the OCG must review an agreement, the form of the agreement or the amount the University must
pay is not dispositive; rather, it is whether the terms to which the University must agree include the
considerations listed above.
II. CONTRACT PROTOCOL REVIEW PROCESS
The first step in the contract protocol review process is to complete the attached Contract Protocol Review
Form. (You can obtain additional copies from the OGC.) The purpose of the form is to provide the OGC with
basic information it needs to review your contracts thoroughly and efficiently. Once you have submitted the
Contract Protocol Review Form to the OGC, one of the lawyers will contact you to discuss the business terms
of the agreement and determine who will complete the negotiations with the other party. If the other party
provides you with a form agreement, attach the other party’s agreement to the Contract Protocol Review
Form. Since the terms in the other party’s agreement dealing with the legal issues will probably be more
favorable to the other party, we will only use the other party’s agreement as a starting point for the negotiation
of the legal issues. If the other party does not provide you with a form agreement, outline the business terms
on the Contract Protocol Review Form and the OGC will draft an agreement from your statement of the
21
business terms.
If the contract raises specialized legal issues, the Office of the General Counsel may retain outside counsel
for advice. However, the decision to retain outside counsel must be made by the Office of the General
Counsel.
III. AUTHORITY TO SIGN CONTRACTS
The following individuals have the authority to sign contracts on behalf of the University:





Up to $2,500 Administrators and Business Officers
$2,501 to $25,000 Cost Center Managers
$25,001 to $100,000 Vice Presidents, Deans and Directors
$100,001 to $250,000 Senior Vice Presidents
$250,001 and Above President
Additional Information: Inquiries regarding this policy can be directed to the Office of General Counsel.
22
POLICY: RECORDS RETENTION
POLICY NUMBER: OGC-6
Responsible Officer: General Counsel
Effective Date: March 2004
Revisions: None
I. POLICY
This policy sets forth the standards and procedures for use by the University community in connection
with the retention of University records by various departments of the University. It is the intention of this
policy to ensure that all University records are maintained in accordance with all applicable legal and
policy requirements in order to ensure that University records are not improperly or prematurely disposed
of by a University department. At the same time, this policy seeks to give guidance to University
employees as to appropriate time frames under which University records that are no longer necessary for
the operation of the University may be properly disposed of, thereby providing for efficient and effective
use of the University's limited storage capacity.
II. PROCESS FOR DISPOSAL OF UNIVERSITY RECORDS
The head of any academic department or vice president for an administrative department may authorize
the disposal of University records upon meeting the following criteria:
1. The records to be disposed of meet or exceed the time frames set forth for such records in the
appendix attached to this policy.
2. The disposal of the records complies with statutory, contractual or accreditation obligations.
3. The records to be disposed of do not relate to or contain information regarding current, pending or
potential litigation involving the University. Any questions regarding these criteria should be addressed to
the Office of General Counsel.
4. Records containing student information or sensitive and/or confidential information must be shredded
or otherwise rendered unreadable prior to disposal.
Under no circumstances shall any employee dispose of University records without following the above
procedures. This policy is not intended to apply to the appropriate disposal of individual documents when
warranted and approved in the course of an employee's daily activities but is intended to apply to the
disposal of large quantities of out of date University records.
III. DETERMINATION OF TIME FRAMES
If an employee seeks to dispose of certain University records that are not listed in the appendix of this
policy , the employee can not dispose of the records without the approval of the Office of General
Counsel.
Additional Information: Inquiries regarding this policy can be directed to the Office of General Counsel.
23
Name of Record
1
1.1
Board Committees
a. Meeting Notices
b. Agendas
c. Minutes
Permanent
1.2
Corporate Board
a. Meeting Notices
b. Agendas
c. Minutes
d. Membership Lists
Permanent
1.3
Corporate Documents
a. Articles of Incorporation
b. Articles of Amendment
c. Articles of Merger or Division
d. Fictitious Name Filings
e. Corporate Bylaws
Permanent
1.4
Documents about members of the Board of Trustees
a. Curriculum Vitae and newspaper articles
b. completed Conflict of Interest Forms
Permanent
5 years after resignation of Board Member
1.5
Acquisition, Mergers, Reorganization
Permanent
1.6
Bylaws (Corporate)
Permanent
1.7
Bylaws (Faculty)
Permanent
1.8 Charter and Amendments to Charter and Related
Correspondence
1.9
2
3
Retention Period
Institutional and Corporate Documents
In-house Publications
Permanent
Permanent
1.10 Institutional Policies and Manuals
Permanent
1.11 Minute Books
Permanent
1.12 Mission Statement/Strategic Plans
Permanent
1.13 News Releases
Permanent
1.14 Organization Charts
Permanent
1.15 Policies and Procedure Manuals
Permanent
Financial Records
2.1
Federal, state and local tax returns
Permanent
2.2
Yearly Conflict of Interest Form
Permanent
2.3
IRS Determination Letter
Permanent
2.4
Budgets
50 years
2.5
Financial Statements (Audited)
Permanent
2.6
IRS Rulings
10 years after receipt of ruling
2.7
Letters of Credit
7 years
2.8
Accounts payable and receivables
a. Royalties
20 years after expiration of agreement
Institutional Advancement Documents
24
4
5
6
3.1
Annual Donor Reports
Permanent
3.2
Annual Finance Reports
Permanent
3.3
Annual Giving Reports
Permanent by Institutional Advancement
3.4
Donor Gift Deposit, including copies of deposit slips,
checks and lock box receipts
7 years
3.5
Donor Gift File (Computerized Data File)
Permanent/On-line and Back-up
Legal Documents
4.1
Contracts and Related Correspondence
6 years after expiration or termination of contract
4.2
Settlement agreements
Permanent
4.3
Complaints and Answers
Permanent
Intellectual Property Documents
5.1
Copyrights (General)
3 years after expiration of copyright
5.2
Patents (Applications, Assignments, License Agreements)
6 years after expiration
Purchasing
6.1
7
8
9
11
6 years from date of payment
Real Estate
7.1
Options to Purchase Real Estate
6 years after expiration of option
7.2
Property Records (Deeds, Leases and Title Reports
Six years after University's interest has terminated or is
transferred.
Construction Documents
8.1
Building plans, blueprints and design plans
Permanent
8.2
Contracts and agreements
6 years after completion of construction project
8.3
Licenses and Permits
Permanent
8.4
Management Engineering Studies and Report
Permanent
8.5
Maps
Permanent
Worker's Compensation
9.1
10
Invoices
Open and Closed Claims files
10 Years - a 500-week window exists in which
suspended claims can be re-opened
Risk Management/Insurance Records
10.1 Insurance Policies
6 years after expiration
10.2 Incident Reports
5 Years
Minors -- the longer of:
a. 5 years
b. Or when minor reaches the age 19
10.3 Litigation
2 years after settlement or disposition of litigation
10.4 Medical Records
7 years from last entry
Minors -- until 19th birthday, or 7 years from last entry,
whichever is later
Academic Student Records
11.1 Admission Records
a. Studens who enroll
b. students who do not enroll
10 years
2 years from date of start of application term
25
12
11.2 Department Records
5 years for student academic files
11.3 Student Disciplinary Records
5 years after graduation or date of last incident
11.4 Student Employment
Except for requirements applicable to work-study
students
11.5 Papers/Theses/Exams
Grade records are permanent
All others -- 5 years
11.6 Transcripts
Permanent
11.7 Enrollment statistics
Permanent
11.8 Records on Foreign Students (F-1 & M-1 Visas)
After a student's departure, records must be retained
until a report to INS is made concerning the reasons for
departure, or 5 years after graduation, or date of last
attendance
Employee Records
12.1 Payroll Records
a. Annual payment records (w-2)
b. Information returns filed with tax authorities
c. Records on "bona fide" executive administrative or
professional employees
d. Payroll records from the last date of entry
e. Employment contracts necessitating irregular hours of
work
f.
g.
Certificates and notices required to be made or posted
by employers
Basic time and earning cards from the date of last
entry
h.
i.
Permanent
6 years
3 years
3 years
3 years
3 years
2 years
2 years
2 years
3 years
Tables/schedules used to provide the rates for
computing straight-time earnings, wages, salary or
overtime pay from their last effective date.
Records of additions to or deductions from wages
paid
j.
Individual employee pay records showing dates,
amounts and types of items making up additions and
deductions.
12.2 Fair Labor Standards Act and Equal Pay Act
a. Basic records relating to employee compensation,
such as payroll records (including start and end of
shift-daily), individual employment contracts, collective
bargaining agreements, and certificates and notices of
Wage and Hour administrator.
b. Supplementary basic records, such as basic
employment and earnings records, wage rate tables,
records of additions or deductions from wages paid,
and records of changes in compensation rates.
c. Records made in the normal course of business
relating to payment of wages, wage rates, job
evaluations, job descriptions, merit and seniority
systems, and descriptions explaining wage
differences between the genders.
12.3 Affirmative Action Information
a. Personnel and other records relating to hiring,
promotion, demotion, transfer, layoff or termination,
rates of pay and other terms of compensation for
employees.
b. All records used to complete the EEO-6 or the new
IPEDS and the information therefrom.
c. Records regarding employee complaints as to
violations of the regulations on Affirmative Action
Programs for handicapped individuals and veterans
and actions taken thereunder, including requests for
reasonable accommodation
d. Employment or other records required by the OFCCP
3 years from the date of the personnel actions
involved.
2 years from the date of the personnel actions
involved.
2 years from the date of making the record or the
personnel actions involved, which ever is later
2 years from date record was made or personnel action
taken, whichever is later.
2 years
1 year after final disposition of the matter.
2 years
2 years
26
e.
or its regulations.
Records on Tests and Selection Criteria in making
employment decisions.
12.4 Family and Medical Leave Records
a. Documentation related to FMLA leave, such as dates
and hours of FMLA leave taken, copies of leave
policies, records of disputes with employees over
FMLA benefits, and copies of notices of leave
submitted to the employer and all FMLA notices
distributed by the employer.
12.5 Immigration and Naturalization Records
a. Records that verify employee's eligibility to work under
the federal immigration laws
b. Employment eligibility verification from "I-9" for each
employee
12.6 Compliance with Occupational Safety and Health Act
a. Required logs and summaries of occupational injuries
and illnesses
b. Employee medical records
c. Employee exposure records
d. Analysis using exposure or medical records
12.7 Faculty Peer Review Materials
12.8 Job Applicant Records
a. Promotion, demotion, transfer selection for training,
layoff, recall, or discharge of any employee.
b. Job orders submitted to an employment agency or
labor organization for recruitment of personnel.
c. Job application and other employment inquiries
including records relating to failure or refusal to hire
any individual.
d. Test papers by applicants/candidates for any position
which disclose results of an employer-administered
aptitude or other employment test considered in
connection with a personnel action.
e. Any advertisements or notices to the public or to
employees relating to job openings, promotions,
training programs, or opportunities for overtime work.
12.9 Age Discrimination in Employment Act
a. Records on each employee containing name,
address, date of birth, occupation, rate of pay and
compensation earned each week.
b. Personnel or employment records related to job
applications, promotion, demotion, transfer, layoff,
recall or discharge ,job orders submitted to
employment agencies or labor organizations for
recruitment of personnel, test papers of employeradministered aptitude test, physical examination test
results and advertisements
c. Application forms for positions known to be of a
temporary nature.
d. Records relevant to enforcement action against
employer
3 years
3 years
3 years after date of hiring or (1) one year after date of
employees termination, whichever is later
5 years
Duration of employment plus 30 years
30 years
30 years
Maintain during entire period of employment and
destroy 7 years after termination of employment
relationship
1 year
1 year
1 year
1 year
1 year
3 years
1 year from date of personnel action to which the
records relate
4 years
Until final disposition of action
27
12.10 Pennsylvania Unemployment Compensation Act
a. All employment and payroll records as well as other
business records such as cash books, journals, and
ledgers.
b. Daily attendance records.
c. Record showing the name, address, social security
number, craft, classification, number of hours worked
each day in each craft and hourly rate paid (for public
works project) and time cards.
2 years
2 years from date of payment
12.11 Prevailing Wage Act
a. Payroll records, including records of written consent
for deductions from wages
Full period of employment plus 3 years.
12.12 Pennsylvania Wage Payment and Collection Law
a. Payroll records, including records of written consent
for deductions from wages.
Employment plus 3 years
12.13 Tax Records
a. Retirement and health insurance plans and any
employee benefit plan documents.
Duration of plan + 6 years after termination
12.14 Employee Benefit Plans
a. Plan documents and amendments and formal
corporate benefit policies
b. Trust agreements, custodial agreements and Investor
Advisor agreements
c. Insurance Contracts
d. Third-party administrative agreements
e. Records of selection of outside fiduciaries and service
providers
f.
Board resolutions regarding plans
g. Summary plan, descriptions, summaries of material
modifications and education materials for investment
under ERISA §404 (c)
h. Formal administrative rules and policies under a plan
and relevant minutes of University Board of Trustees
subcommittees
i.
Investment advisor recommendations and record of
action
j.
IRS Letters of Determination
k. Federal government advisory opinions and approvals
l.
Fiduciary Bond
m. Beneficiary designation forms
n. Loan documentation for plan participant loan
o. Notices to participants of benefits payable, distribution
options and tax consequences
p. COBRA notices
13
4 years
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
6 years after distribution of benefits
3 years after repayment of loan
6 years after distribution
9 years
12.15. Collective Bargaining Agreements
Permanent
12.16. Employment contracts
6 years after expiration or termination of contract
Financial Aid Records
13.1 Federal Form 990
a. Fiscal and administrative records
b. Current records of the student's admission to and
enrollment status at the institution, and his/her prior
receipt of financial aid
c. Higher Education Assistance programs ("HEA"), 20
U.S.C. Sections 107(a) - 1099(c-1)
d. Financial and other records as necessary to
determine "the institutional eligibility, financial
responsibility and administrative capability" of the
institution.
e. All records required under applicable program
regulations
f.
Detailed financial records that are subject to review by
the Department of Education.
3 years -- Retention period begins from date of filing
5 years
5 years
5 years
5 years
5 years after annual audit has been accepted
28
13.2 Financial Records -- Annual Audit
a. Annual reports of revenues and expense attributable
to specific sports engaged in by students.
13.3 Annual Report on Athletically-Related Student Aid
a. Records Relating to Receipt and Expenditure of
Federal Funds
1 Financial Records
2 Loan Applications
b. Federal Perkins Loan Program:
1 Repayment records, including cancellation and
deferment request
2
3 Financial Records
4 Employment-related fiscal records
5 Applications
13.4 Specific HEA Programs
a. College Work-Study Program
b.
c.
14
1 Financial Records
2 Applications
3
Federal Supplemental Educational Opportunity Grant
Program ("SEOG")
1 Loan Records
2 Student's Status Confirmation Reports
Federal Family Education Loan Program ("FEEL")
1 Financial Records
2 Student Aid Reports (SAR) Data
14.2 Direct Grants
a. Records relating to all direct grant programs
b. All financial and programmatic records, supporting
documents, statistical records, and other records of
recipients "reasonably pertinent" to the grant.
14.3 Non-profit Grantees
16
Retention period begins after it submits its application
5 years
5 years
5 years
5 years
5 years
Retention period begins after the institution submits its
Fiscal Operations Report for the award year
5 years
5 years
5 years
Retention period begins after the institution submits its
FISAP for that year.
5 years
5 years
5 years
5 years -- Retention period begins following the last
day of the borrower's attendance.
Grants and Loans
14.1 Pell Grant Program
15
5 years
Retention period begins after the end of the award
year.
5 years
5 years
5 years -- Retention period begins after the completion
of the activity for which the institution uses the grant
funds.
Public Safety Records
15.1 Compilation of statistics on enumerated criminal offenses
that occur on campus.
5 years
15.2 Complaint dispatch report
5 years
15.3 Emergency medical
5 years
15.4 Evidence logs
Permanent
15.5 Incident reports involving death
Permanent
15.6 Incident report involving arrest
75 years
15.7 Incident report involving non-criminal matters
3 years
15.8 Records documenting the drug prevention program, the
results of the biennial review, and any other records related
to compliance by the institution with the Drug-Free Schools
and Communities Act.
3 years -- Retention period begins after the fiscal year
in which the record was created.
Non-Discrimination in Education Records and Reports
16.1 Any records relating to alleged violations of Title IX
3 years -- Retention period begins from the date that
the data was first available
29
16.2 Records of any modifications made to the policies and
practices of the institution pursuant to Section 106.3(c)(2)
and any remedial action taken pursuant to Section
106.3(c)(3).
3 years -- Retention period begins from the date of
alleged discrimination.
16.3 Any records relating to alleged violations of Title VI.
3 years
16.4 General Compliance Records
3 years -- It is recommended that records of complaints
of Title VI violations with the Department that are true
administratively resolved be retained for at least one
(1) year following final resolution.
16.5 Any records relating to alleged violations of the
Rehabilitation
16.6 Records on the medical condition or history of any
applicant or employee in compliance with the Americans
with Disabilities Act (ADA).
3 years
3 years -- It is recommended that records of complaints
of Title VI violations with the Department that are
administratively resolved be retained for at least one
(1) year following final resolution.
3 years after application date or date of termination
17
Research Administration Records
17.1 Administration records
7 years after completion of research *as specified by
individual agency requirements
17.2 Financial Records
7 years after completion of research*
17.3 Scientific Records
7 years after completion of research*
17.4 Protocols and related documents (including consents and
indemnification) on grants and contracts covering use of
human subjects and animals in research.
Permanent
17.5 Sponsored research
7 years unless a longer period is required by sponsor
contract.
17.6 Research involving investigational drugs
7 years after completion of research*
17.7 IRB records; minutes, agendas, other records
7 years after completion of research*
17.8 Research involving medical devices
7 years after completion of research*
17.9 Contracts (Research)
10 years from expiration or termination of contract
*Completion of research refers to the period after the
final close out of the grant and after all final documents
have been submitted.
18
Electronic Record Retention
18.1 Unofficial E-mail
Immediately deleted by both receiver and sender
18.2 Historic E-mail
Automatically purged within 14 days
18.3 Official E-mail
a. Printed in Hard Copy and filed.
b. Stored Electronically
Treated as a paper document and subject to regular
document retention policies.
Subject to regular document retention policies but must
be migrated to a new software and storage media as
the upgrades occur.
30
Office of the Senior Vice President for Finance and Treasurer and CFO
CODE OF ETHICS FOR SENIOR FINANCIAL EXECUTIVES
1.
Honesty, integrity, and dignity shall mark the executive’s ethics, and each executive shall
expect and encourage such ethics in others.
2.
The executive must understand and support the institution’s objectives and policies and
be able to interpret them for others.
3.
The executive’s ethics shall reflect due regard for possible conflicts of interest. He or she
shall be prepared to assist in the clarification, disclosure, and ethical handling of possible
real or apparent conflicts of interest that may arise in the institution. To this end, each
executive shall refrain from accepting duties, incurring obligations, accepting gifts or
favors of monetary value, or engaging in private business or professional activities where
there is, or would appear to be, a conflict between the executive’s private interests and the
interests of the institution.
4.
The executive is to act with competence and in compliance with applicable university
policies and governmental laws, rules, and regulations.
5.
The executive is to provide full, fair, accurate, timely and understandable disclosure in
reports and documents made available to the Board of Trustees, the public and to
regulatory agencies.
6.
The executive shall be dedicated to exercising his or her special competence and
knowledge to ensure the most effective use of institutional resources, and shall be
prepared to work with others in the institution to this end.
7.
The executive should act at all times in adherence to this code and insist upon the
compliance of each of his or her subordinates. Failure to comply with this code can
involve sanctions, up to and including dismissal from the university.
8.
The university’s Chief Financial Officer should ascertain that there is awareness
throughout the University of the existence and content of this Code of Ethics, that the
provisions of the code are followed, and that the university community is aware that any
violation of the code should be reported immediately to the university General Counsel or
Compliance Officer.
31
CODE OF ETHICAL PRINICIPLES AND
STANDARDS OF PROFESSIONAL PRACTICE
FOR
OFFICE OF INSTITUTIONAL ADVANCEMENT
Preamble
Each member of the Office of Institutional Advancement (“IA”) recognizes its responsibility to ensure
that needed resources are vigorously and ethically sought for Drexel University (“Drexel”) and that the
intent of the donor is honestly fulfilled.
To achieve these goals, IA adopts the following principles of conduct inspired and modeled in part on the
AFP (Association of Fundraising Professionals) Code of Ethical and Standards of Professional Practice.
Professional Obligations
1.
Each member of IA shall not engage in activities that harm Drexel or any of its constituencies.
Examples of Ethical Practice:
1.
2.
3.
Refusing to participate in activities contrary to the organization’s mission and goals.
Providing accurate and complete information to constituents regarding projects,
programs, or other activities that they might support or endorse.
Maintaining one’s education in philanthropy and fundraising best practices to
convey appropriate advice to constituents, the community and the public.
Examples of Unethical Practice:
1.
2.
3.
4.
2.
Conveying false or exaggerated information about scope of the organization’s
mission and goals.
Neglecting to complete a transaction involving a gift or pledge as promised.
Ignoring unethical practices of others and not reporting same to organizational
leadership or appropriate authorities (e.g. Office of General Counsel and/or Office
of Senior VP, Institutional Advancement).
Making public comments that are derogatory about leadership or organizational
activities.
Each member of IA shall not engage in activities that conflict with their fiduciary, ethical
and legal obligations to Drexel or its constituencies.
Examples of Ethical Practice:
1.
Knowing and, if necessary, informing organizational leadership and/or
organizational clients of applicable ethical and legal fiduciary practices.
32
2.
3.
Being prepared to inform appropriate leadership of any illegal practices in which
their organization may be participating.
Developing internal gift acceptance and stewardship policies that address the
legal and fiduciary obligation of member’s organization.
Examples of Unethical Practice:
1.
2.
3.
4.
5.
3.
Falling to seek internal legal counsel in the drafting of legal contacts (e.g.,
pledge, endowment, or gift annuity agreements) that are proposed to others.
Failing to urge others to seek independent legal and/or professional tax counsel in
regard to planned giving arrangements.
Ignoring known illegal practices of the member’s organization.
Encouraging others to engage in unethical or illegal gift transactions.
Encouraging others to contribute to the organization in exchange for a contract to
be awarded to donor or a party recommended by the donor.
Each member of IA shall effectively disclose to the Senior Vice President and General
Counsel all potential and actual conflicts of interest; such disclosure does not preclude
or imply ethical impropriety.
Examples of Ethical Practice:
1.
2.
3.
Making sure there is agreement upon the amount of time per month that can be
devoted to private consulting or board memberships and documenting the
agreement in writing.
Refusing to engage a consulting firm seeking to direct the member’s
organizational capital campaign after a fundraising staff member reports an offer
from that firm of a position once the campaign ends.
Refusing to accept appointment as an executor or personal representative of a
donor’s estate or trustee of a donor’s trust.
Examples of Unethical Practice:
1.
2.
3.
4.
Falling to report to one’s employer knowledge of being a beneficiary of a donor’s
estate plan.
Holding an ownership interest in a vendor firm that provides products to one’s
employer without reporting such interest to the organization’s leadership.
Failing to comply with Drexel’s conflict of interest policy.
Each member of IA shall not exploit any relationship with a donor, prospect, volunteer,
or employee to the benefit of the member.
Examples of Ethical Practice:
1.
2.
Informing donors and prospects that the member is acting in a professional
capacity with the express intent of relating the mission and goals of the member’s
organization to the individual in the hope that the individual will be influenced to
accept the value of financial support to the member’s organization.
Encouraging a donor or prospect to seek independent professional advice when
including the member’s organization in the individual’s estate plans.
33
3.
4.
Encouraging a donor or prospect to inform his or her family of the intent to
include the member’s organization in the individual’s estate plan.
Refusing to participate in the structuring of contributions by any prospect or
donor who, to the reasonable person, is incapable of making an independent,
informed decision.
Examples of Unethical Practice:
1.
2.
3.
4.
5.
6.
7.
5.
Influencing a donor or prospect to arrange his or her affairs so that the member
may personally benefit.
Manipulating a donor or prospect who is vulnerable because of age, handicap,
infirmity, illness or emotional or physical impairment or dependence to arrange
his or her affairs so that the member or member’s organization becomes a
beneficiary of the individual’s estate or contributions plan.
Assuming the role of personal friend, confidant or caretaker in order to influence
an individual to include the member or the member’s organization in the
individual’s estate or contributions plan.
Accepting a gift of more than token value from a donor who became known to
the member as a consequence of a member’s current or past employment.
Using, or threatening to use, information detrimental to any person to coerce
someone into any action that the individual would not otherwise willing
undertake.
Using, or threatening to use, status, position or power to coerce someone into any
action that the individual would not otherwise willing to undertake.
Failing to provide on a regular basis, but not less than annually, information to
donors who have made an open-ended pledge payable through electronic funds
transfer, preauthorized checking, or similar programs, which information
discloses the status of the pledge and the procedure to change or cancel the
obligation.
Each member of IA shall comply with all applicable local, state, and federal civil and
criminal laws.
Examples of Ethical Practice:
1.
Undertaking personal responsibility for keeping up with changes in applicable
laws and regulations.
2.
Recognizing that one’s employer may be not be in compliance with applicable
laws due to lack of knowledge, and bringing this to the attention of appropriate
organizational leadership.
3.
Ensuring that reports which are part of regulatory requirements for which the
member may have some responsibility are completed accurately and in a timely
manner.
4.
Maintaining appropriate licensure, registration, or certification requirement.
Examples of Unethical Practice:
1.
2.
Having knowledge of a law or regulation, knowing one’s organization is not in
compliance, and choosing to ignore possible remedial action.
Completing reports that are a part of regulatory requirements inaccurately or in
such a way as to distort fundraising results or costs.
34
6.
Each member of IA shall take care to ensure that all solicitation materials are accurate
and correctly reflect Drexel’s mission and use of solicited funds.
Examples of Ethical Practice:
1.
2.
3.
Including in solicitation materials only statements that are accurate and facts that
can be documented.
Omitting from solicitation materials information that may be confusing,
inaccurate or incapable of being documented.
Including in solicitation materials only those endorsements actually made by an
individual or entity.
Examples of Unethical Practice:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
7.
Misrepresenting the organization’s mission: “The theater’s mission is to make the
performing arts available to all citizens of the city” when in actuality the price of
admission excludes the economically disadvantaged and no free performances or
scholarships are offered.
Misrepresenting facts to justify a case for support: “More than 20 homeless
runaways are turned back on the streets every night,” when in fact, those 20 are
absorbed by other agencies.
Misrepresenting the size, breadth and source of support in order to validate cause
and case: “The overwhelming majority of neighborhood associations feel this
need should be met,” when in fact, presentations at neighborhood association
meetings elicited only head nodding from the majority of the audience.
Misrepresenting anticipated results in order to elicit an emotional response: “Your
contribution will save a life” instead of, “You can help save a life.”
Misrepresenting achievements.
Misrepresenting intent: “If we do not succeed in this campaign effort, we will
have to close doors,” when partial success will allow for continuance albeit with
reduced staff.
Misrepresenting philosophy: “We offer service to all needy citizens regardless of
race, creed or ethnicity,” when, in reality, choices are made along ethnic lines.
Misrepresenting facts about numbers of clients served, demographics of clients
served, activities completed or programs planned.
Manipulating children, animals, the ill, the elderly: “The child in this picture was
(9) and has a ninety percent chance of not reaching adulthood”.
Creating mailings or other materials that mimic official government mailings or
billing notices through deceptive appearance and content of materials.
Each member of IA shall take care to ensure that donors receive informed, accurate, and
ethical advice about the value and tax implications of potential gifts.
Examples of Ethical Practice:
1.
2.
Telling a donor that, to the best of one’s knowledge, certain tax results are
indicated in gift arrangements, but cautioning the donor to seek the advice of his
or her own advisors.
Refusing to attest to the value of noncash gifts except when the values are readily
and publicly available, such as listed stocks, bonds.
35
3.
4.
Recommending an independent appraiser not connected to the recipient nonprofit
organization when a qualified appraisal is required.
Including on all solicitations, tickets and receipts for special events a statement as
to the fair market value of services or goods to be received by the donor in
exchange for a contribution.
Examples of Unethical Practice:
1.
2.
3.
4.
8.
Telling a donor the value of an appreciated asset without proper, current
documentation.
Telling a donor the amount of taxes he or she may avoid by making a specific
charitable gift without adequate knowledge of tax laws and the donor’s financial
responsibilities and capabilities.
Failing to tell donor’s their gifts will not be fully tax-deductible when they
receive goods or services in return for the contributions.
Failing to include the fair market value of service received (e.g., dinner, dance)
on material soliciting participation in a special event, including wording that
informs the invitee the contribution is any amount in excess of the fair market
value of the service.
Each member of IA shall take care to ensure that contributions are used in accordance
with a donor’s intentions.
Examples of Ethical Practice:
1.
2.
3.
4.
5.
6.
Treating the terms of a document that describes donor restrictions as a contract,
subject to applicable law.
Using donor contributions that are restricted in ways consistent with the
restriction(s).
Declining to use restricted funds for general operating purposes, except when one
of the following situations exists:
(a)
the donor has given explicit directions in writing to do so
retroactively; or
(b)
the grant/gift document expressly includes a provision for
overhead or administrative costs.
Designing a standard document or form to contain all pertinent gift information
that will be completed by the development office and provided to all other
appropriate organizational units.
Conducting an annual meeting of representatives of all appropriate organizational
units to review the status and use of major gift funds and accounts.
Maintaining proper documentation and records of all uses to which funds have
been put.
Examples of Unethical Practice:
1.
2.
3.
Deciding to change an endowed annual lecture series to biannual, and using the
funds in the interim year for travel by department members to an annual meeting.
Accepting a gift for a specific use, e.g., “pediatric genetic clinical research,” then
subsequently eliminating that program and using those funds for another program
within the pediatric department without obtaining the consent of the donor.
Borrowing from restricted funds for purposes other than the restricted purposes.
36
4.
5.
9.
Diverting into the general operating budget funds intended to cover
administrative costs for the program covered by a restricted gift.
Using contributed funds remaining as surplus after the restriction has been
fulfilled/expired, without the written consent of the donor.
Each member of IA shall take care to ensure proper stewardship for charitable
contributions, including timely reports on the use and management of funds.
Examples of Ethical Practice:
1.
Developing policies that avoid placement of donated funds in high-risk
investments which may erode the corpus.
Examples of Unethical Practice:
1.
2.
3.
10.
Using restricted funds for purposes other than those specified by donor.
Using endowment principal outside the written terms of the endowment
agreement.
Misrepresenting use of restricted dollars, e.g., converting restricted funds from
their intended use.
Each member of IA shall obtain explicit consent by the donor before altering the
conditions of a gift.
Examples of Ethical Practice:
1.
2.
Altering the original conditions of a gift with appropriate permission, e.g., an
organization phases out a program that is being supported from the income of a
long-established endowment fund and the donor is now deceased. It is the
responsibility of the organization to meet with the family or official
representative of the donor, to inform them of the programmatic change(s), and
to solicit their permission to alter the use of the gift. In some cases, this may
require permission of the court.
Keeping donors aware of potential changes in the mission or organization’s plans
that may affect the conditions of a restricted gift.
Examples of Unethical Practice:
1.
2.
3.
11.
Using restricted funds for purposes other than those specified by the donor.
Using endowment principal outside the written term of the endowment
agreement.
Misrepresenting use of restricted dollars, e.g., converting restricted funds from
their intended use.
Each member of IA shall not disclose privileged or confidential information to
unauthorized parties.
Examples of Ethical Practice:
1.
Maintaining only those records and files that members would be willing to share
with the subject if asked.
37
2.
3.
4.
5.
Assuring prospective donors and donors that these files and records are used only
for and by the member’s organization.
Storing records and files about prospective donors and donors in a secure manner
to prevent access by unauthorized persons.
Urging one’s organization to develop written policies based upon applicable laws
defining what information shall be gathered and under what conditions it may be
released and to whom.
Personally retrieving files pertinent to the day’s work and personally returning
them to the protected site at which they are kept.
Examples of Unethical Practice:
1.
2.
3.
4.
5.
12.
Providing a donor’s file to unauthorized individuals or organizations.
Sharing donor information in a collegial or social setting with those not directly
involved in the cultivation or solicitation of the donor.
Sharing donor information with friends, relatives and colleagues not involved in
fundraising, or in social settings involving volunteers or administrative or
professional staff of their organization.
Instructing an unauthorized staff member to retrieve confidential files.
Treating confidential information casually, e.g., taking files to a restaurant at
lunch time so as to subject them to public view.
Each member of IA shall adhere to the principle that all donor and prospect information
created by, or on behalf of, Drexel is the property of Drexel and shall not be transferred
or utilized except on behalf of Drexel.
Examples of Ethical Practice:
1.
2.
3.
Encouraging one’s organization to develop board-approved policies covering the
use of donor lists and who may have access to them.
Refusing the request of a board member who asks for lists of donors to one’s
organization for use by another organization on whose board he or she serves.
Clearly stating, when interviewing for new employment or presenting a
consulting proposal, that donors with whom the member has been previously
involved are not portable and will only be involved with the new organization if
they are, or can become, through their own personal involvement, part of the new
organization’s natural constituency.
Examples of Unethical Practice:
1.
2.
3.
4.
13.
Disclosing confidential information to unauthorized persons.
Providing donor or prospective donor files to another nonprofit or business entity
without permission of the owner-organization.
Approaching a nonprofit with another organization’s donor files.
Revealing the identity of an anonymous donor to others without the authorization
of the donor.
Each member of IA shall give donors the opportunity to have their names removed from
lists that are sold to, rented to, or exchanged with other organizations.
38
Examples of Ethical Practice:
1.
2.
Providing, on a regular basis but not less than annually, a written communication
asking donors if they wish to have their names removed from lists that are sold,
rented or exchanged with other organizations. This communication may stand
alone or be incorporated within another, broader piece, such as a mailing,
newsletter, or annual philanthropic or financial report.
Making a good faith effort to remove names from a list upon request, even when
names maybe on the list in a form different from that on the request for removal.
Examples of Unethical Practice:
1.
2.
14.
Selling, renting, or exchanging names of donors without having given them
periodic opportunity to have their names deleted from such lists.
Providing a vehicle for donors to have their names removed from lists to be sold,
rented or exchanged when, in reality, no action is taken to remove names.
No member of IA shall accept compensation that is based on a percentage of charitable
contributions; nor shall they accept finder’s fees.
Examples of Ethical Practice:
1.
2.
3.
4.
Refusing to accept any part of one’s compensation as a percentage of charitable
funds raised or expected to be raised.
Recognizing the difference between percentage-based compensation and a bonus
plan, accepting only the latter should it be part of an organization’s regular
practices.
Promoting the principles upon which the guidelines for this standard are based.
Encouraging your organization to avoid paying a third party – such as an attorney,
financial planner, or provider of such services as direct mail and telemarketing – a
fee for service that is a percentage of the value of the related gift or trust.
Examples of Unethical Practice:
1.
2.
3.
15.
Accepting percentage-based compensation because an organization lacks
sufficient budget, with the expectation that such will be converted to salary or fee
when funds are available.
Disguising compensation as salary, fee or bonus when it is, in truth, a percentage
of funds raised.
Accepting a compensation package in which part is salary or fee and the balance
is to be made up of a percentage of the funds to be raised.
No member of IA shall pay finder’s fees, or commissions or percentage compensation
based on charitable contributions.
Examples of Ethical Practice:
1.
Refusing a gift if it is given to pay someone a finder’s fee or could be perceived
as such.
39
2.
3.
Helping a donor, estate planner, or counselor understand that a gift or bequest is
to be given to benefit the organization receiving the gift, or a cause embodied
therein, and not to benefit individuals.
Promoting the philanthropic or public benefit aspect of giving.
Examples of Unethical Practice:
1.
2.
3.
4.
Paying a finder’s fee to someone for identifying a donor or recipient
organization.
Suggesting to someone that he or she might ask for a fee for making a match.
Paying a finder’s fee for the purpose of generating a gift.
Paying a finder’s fee for obtaining a corporate sponsorship.
40
------------------------------------------------------------------This message to Drexel Official Mail was approved under
the authority of the Senior Vice President and General Counsel
------------------------------------------------------------------Compliance Hotlines for the Drexel University Community
Every quarter, we remind the Drexel University Community about the existence of the hotlines we have
established to make it easy for anyone to report conduct that may violate the law, university policy, or the
university's Code of Conduct http://www.drexel.edu/hr/policies/DU-OGC-5.htm that applies to everyone
- from the members of the Board of Trustees, to the President and his Cabinet, to professors, staff, and
vendors. It is usually better if these reports can be made directly to your supervisor or professor, your
Department Head, your Dean, or a Vice President; but there are times when that might be difficult, and
that is why the University established the hotlines.
We were the first university in the country to adopt the ³best practices² of the Sarbanes-Oxley Act of 2002
and to create compliance hotlines so that instances of suspected improper conduct can be brought to the
attention of the Chief Compliance Officer who could be counted upon to investigate the problem promptly
and fairly, without any fear of retaliation. Since then, independent organizations have been created to assist
universities and corporations with such efforts.
After considering several, we selected EthicsPoint http://info.ethicspoint.com/home.asp
and it has been providing this service for us since April 2006.
You may reach the compliance hotlines four different ways:
Drexel University: 866-358-1010 (toll free) -orhttps://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=14030
College of Medicine: 866-936-1010 (toll free) -orhttps://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=13963
All four of these methods will allow you to make reports that are entirely confidential, as provided by the
University policy governing the hotlines http://www.drexel.edu/hr/policies/DU-OGC-7.htm.
You may be assured that no information likely to reveal your identity will be shared with anyone else
without your permission. Callers will be completely protected from retaliation for having made good faith
reports.
Reports are made directly to the Audit Committee of the appropriate Board of Trustees on all
communications to the hotline and the actions taken in response.
If you are aware of any conduct - act or omission - which you think violates University policies, rules or
regulations, please report it. We owe it to ourselves to make the University the best place it can be.
Questions about the University's Code of Conduct or the hotlines may be addressed to the University's
General Counsel, Tobey Oxholm, at Oxholm@drexel.edu.
41
Drexel University
POLICY ON REPORTING AND INVESTIGATING
ALLEGATIONS OF SUSPECTED IMPROPER CONDUCT
I.
INTRODUCTION
Drexel University is responsible for the proper use of its resources and the public and private support that
furthers the realization of its mission. The University is committed to conducting its affairs in full
compliance with the law and with its own policies and procedures. Such adherence strengthens and
promotes ethical and fair practices and treatment of all members of the University and those who conduct
business with the University.
Faculty, employees and other holding positions of fiduciary duty with the University are obligated to perform
these duties in compliance with all applicable laws and University policies and procedures.
The University has developed and implemented internal controls and procedures that are intended to
prevent or deter improper conduct. There may, nonetheless, be both intentional and unintentional violations
of laws, regulations, policies and procedures. The University has a responsibility to investigate and, where
appropriate, report allegations of suspected improper conduct.
This policy governs reporting and investigations of allegations of suspected improper conduct.
The University encourages employees, faculty, students and others to use the guidance set forth in this
policy to report any and all allegations of suspected improper conduct. This Policy provides for
confidentiality, and confirms that any person who makes a good faith report of suspected improper
conduct or who participates in the investigations of such a report will be protected from retaliation by the
University or anyone within its control.
It is not intended that this policy alter in any fundamental aspect the responsibility for conducting
investigations, but to provide guidance on how reports of suspected misconduct can be made. Individual
employee grievances and complaints concerning terms and conditions of employment will continue to be
reviewed in accordance with applicable academic and human resources policies and collective bargaining
agreements. Any allegations of improper conduct that may result in disciplinary action against a faculty
member or employee shall be coordinated with the applicable policies. In all cases, the University shall
exercise its discretion in determining when circumstances warrant investigation and, in compliance with
this policy, the appropriate investigative process to be employed.
Finally, this policy is subject to the direct oversight of the Audit Committee of the Board of Trustees in
carrying out its responsibility under its Charter to receive regular reports on calls made to the hotline and
the Chief Compliance Officer’s responses. The Chief Compliance Officer reports directly to the Audit
Committee.
II.
DEFINITIONS
For purposes of this policy the following terms shall have these meanings:
A. University Resources shall include, but not be limited to the following, whether owned
by or under the management or control of the University:
 Cash and other assets, tangible or intangible, real or personal property;
42





Receivables and other rights or claims against third parties;
Intellectual property rights;
Facilities and the rights to use University facilities;
Drexel University’s name, associated symbols, logos or service marks; and
University records, including student records.
B. Chief Compliance Officer is a University official who has independence within the
University community, is knowledgeable concerning University resources and
procedures, and can assure that there is a fair and impartial investigation of allegations of
improper conduct and that the outcome of the investigation will be based on the merits.
The President shall appoint the official who will serve as Chief Compliance Officer, and
shall publicize the appointment no less than once each quarter. The Chief Compliance
Officer shall report directly to the Audit Committee of the Board of Trustees.
C. Improper Conduct is any action or activity by an employee that is undertaken in the
performance of the employee’s official duties or with the appearance or representation that
it is undertaken in the performance of official duties, whether or not the action or activity is
within the scope of his or her employment, and that: (1) is in violations of any federal or
state law or regulation, including, but not limited to, corruption, malfeasance, bribery, theft,
fraudulent claims, fraud, or conversion; (2) misuse or misappropriation of University
property or willful omission to perform duty or intentional violation of a University policy,
procedure, rule or regulation; (3) is economically wasteful or involves gross misconduct,
incompetence or inefficiency or creates for the University potential exposure to liability
and financial irregularities; (4) suggests strongly that the action or activity is the result of a
criminal act; (5) is a significant threat to the health or safety of members of the University
community; (6) is scientific misconduct; (7) is an unauthorized invasion, alteration or
manipulation of records and computer files; and (8) is in pursuit of a benefit or advantage
in violation of the University’s conflict of interest policy; (9) interference with a University
investigation conducted in accordance with this policy, including the withholding,
destruction or tampering with evidence or any effort to influence, coerce, intimidate or
retaliate against Whistleblowers or witnesses; or (10) is determined by the Chief
Compliance Officer to be detrimental to the best interests of the University
D. Protected Disclosure is any report, communication or other disclosure that may evidence
Improper Conduct, if made in good faith for the purpose of correcting the conduct or
while participating in an investigation of Improper Conduct.
E. Whistleblower is the term for a person making a Protected Disclosure. The
Whistleblower is a reporting party, not an investigator, fact finder or one who determines
the corrective or remedial action.
III.
Reporting Allegations of Suspected Improper Conduct
A. Filing a Report
1. Any person may report allegations of suspected improper conduct. Anonymous
reports may be made. Persons wishing to make an anonymous report should
use the reporting hotline. An anonymous report must include sufficient
corroborating evidence to justify initiating an investigation.
2. The University encourages reports of allegations of Improper Conduct to be
made in writing, so that there is a clear understanding of the issues raised. Oral
reports may be made. Reports should focus on facts, and avoid speculations
and drawing conclusions. Including as much specific information as possible
43
will facilitate the evaluation of the nature, extent and urgency of preliminary
investigative procedures.
3. The University recommends that persons who are not employees of the
University make reports to the Chief Compliance Officer. Such reports may be
made to another University official whom the reporting person may reasonably
expect to have either responsibility over the affected area or the authority to
review the alleged Improper Conduct on behalf of the University.
4. Employees of the University should report allegations of Improper Conduct to
the employee’s immediate supervisor or other appropriate administrator or
supervisor within the operating unit or to the Chief Compliance Officer.
Employees may also make reports to the President; General Counsel; Senior Vice
President for Administrative Services; Provost; Vice Provost, Office of Research
and Administration; Director, Internal Audit; and Chief Compliance and Privacy
Officer.
B. Reporting to the Chief Compliance Officer
1. Managers, administrators and employees in supervisory roles who receive a
report alleging Improper Conduct shall promptly report the matter to their
supervisor, an appropriate University manager and/or the Chief Compliance
Officer. Such supervisors are charged with exercising appropriate judgment in
determining which matters can be reviewed under their authority or referred to
a higher level of management or to the Chief Compliance Officer. The
supervisor must document an oral report with a written summary of the oral
report.
C. Reporting to the Office of the President and Others
1. The Chief Compliance Officer shall have principal responsibility for reporting to
the President and senior management, or, if circumstances warrant, to the Board
of Trustees. The Chief Compliance Officer shall consult with those who will
investigate allegations of misconduct.
2. In some instances, a funding entity or regulatory agency may require a report
of an allegation of improper conduct. The Chief Compliance Officer, in
consultation with the administrators of the affected area, will determine the
nature and timing of such communications.
3. Allegations of suspected losses of money, securities or other property shall be
reported to the Director of Risk Management. The Director shall report such
matters pursuant to the terms of any contracts with insurance or bonding
companies.
4. In the event that any person with a reporting obligation believes that there is a
conflict of interest on the part of the person to whom the allegations of
suspected Improper Conduct are to be reported, the next higher level of
authority shall receive the report.
D. Confidentiality
1. Whistleblowers frequently make their reports in confidence. To the extent
possible within the limitations of law and policy and the need to conduct a
competent investigation, confidentiality shall be maintained. Whistleblowers
should be cautioned that their identity may become known for reasons beyond
the control of the investigators or University administrators. Whistleblowers
44
should be prepared to be interviewed by the investigator. If there is a selfdisclosure, the University is no longer obligated to maintain confidentiality.
2. The identity of the subject(s) of the investigation shall be maintained in
confidence subject to the same limitations.
E. Time Limits to Report
The allegation of suspected improper conduct must be reported as soon as possible and
no later than one (1) year after the event(s) giving rise to the allegation, unless there is
good cause to explain the delay.
IV.
Investigating Alleged Improper Conduct
A. A number of units within the University have responsibility for routinely conducting
investigations of certain types of allegations of Improper Conduct and have resources and
expertise to apply to such purposes. These units include Internal Audit, Public Safety,
Human Resources and the Corporate Compliance Office. In addition, other University
parties may become involved in investigations of matters based on their area of
responsibility or expertise, for example, risk management, research administration,
academic affairs, health sciences compliance officer and conflict of interest coordinators.
B. The Chief Compliance Officer shall coordinate the investigation and will enlist the efforts
of the appropriate unit within the University to conduct the investigation or may solicit
investigative services outside of the University. In addition, the Chief Compliance
Officer shall:
1. assure that all appropriate reporting occurs to the Office of the President,
funding and regulatory agencies, Whistleblowers, and others, as necessary;
2. assure that all appropriate administrative and senior officials are apprised of the
allegations, as necessary;
3. assure that appropriate resources and expertise are allocated in order to effect a
timely, comprehensive and objective investigation;
4. ensure that there are no conflicts of interest on the part of any party involved in
specific investigative units;
5. monitor the progress of the investigation; and
6. coordinate and facilitate as an advisor in determining the corrective and
remedial action to be taken. The appropriate University official shall determine
the corrective and remedial action to be taken.
C. Each investigative unit shall conduct its investigation in accordance with applicable laws
and established procedures within its discipline.
D. All University employees have a duty to cooperate with investigations conducted under
this policy.
E. During an investigation an employee may be placed on administrative leave or
investigative leave when it is determined that such a leave would serve the best interests
of the employee, or the University or both and the granting of such leave is consistent
with applicable personnel policies or collective bargaining agreements.
F. Investigative Responsibilities
1. Internal Audit is responsible for investigations involving allegations known or
suspected misuse of University Resources, including fraud, financial
irregularities and the financial consequences of other matters under
investigation. If criminal activity is detected, consultation with Public Safety
will determine whether the police should be involved.
45
2. Public Safety is responsible for investigations of known or suspected criminal
acts within its jurisdiction. In cases involving criminal concerns, Public Safety
should work in support of the police investigation.
3. Procedures for investigations of personnel matters, scientific misconduct, and
student misconduct are established by Human Resources, Research
Administration, the Office of Senior Vice President for Student Life and
Administrative Services and the Provost.
V.
Roles, Rights and Responsibilities of Whistleblowers, Investigation, Participants, Subjects
and Investigators.
A. Whistleblowers
1. Whistleblowers provide initial information related to good faith belief that
there is improper conduct.
2. Whistleblowers shall not obtain evidence to which they do not have a right of
access. Whistleblowers are reporting parties, not investigators.
3. Whistleblowers must be truthful and cooperative with the Chief Compliance
Officer, investigators or others to whom they make a report of alleged improper
conduct.
4. Whistleblowers have a right to be informed of the disposition of their
disclosure.
B. Investigation Participants
1. Investigation participants have a duty to cooperate fully with the University
investigators.
2. Participants should not discuss or disclose the investigation or their testimony
with including, without limitation, others who are reasonably likely to be
investigation participants, as well as individuals not connected to the
investigation. Under no circumstances shall a participant discuss with the
investigation Subject or other witnesses the nature of the evidence requested or
provided or the testimony given to the investigator unless agreed to by the
investigator.
3. The participants’ confidentiality will be maintained to the extent possible
within the legitimate needs of law and the investigation.
4. Participants are entitled to protection from retaliation on account of their
participation in an investigation to the extent that Participants cooperate in a
truthful, cooperative and candid manner.
C. Investigation Subjects
1. A Subject is a person who is the focus of an investigation.
2. Subjects should be informed of the allegations at the outset of a formal
investigation and have opportunities for input during the investigation.
3. Subjects shall cooperate with investigators to the extent their cooperation will
not undermine protection against self-incrimination under federal or state law.
4. Subjects have the right to consult with person(s) of their choice, including an
attorney.
5. Subjects may consult with the Office of the General Counsel. The Office of the
General Counsel will provide legal advice to the Subject with respect to the
issues in the investigation, unless that Office determines that a conflict of interest
46
6.
7.
8.
9.
precludes it from doing so. The Subject must understand that the Office of the
General Counsel represents the University’s interests. If the Office of the General
Counsel provides legal services, the disclosures will not be subject to the
attorney-client privilege. The Subject will be advised whenever a conflict of
interest arises requiring the attorney to withdraw from providing legal services.
Subjects shall not interfere with an investigation. They shall not withhold,
destroy or tamper with evidence or influence, coerce or intimidate witnesses.
The standard of evidence to sustain an allegation of Improper Conduct is a
preponderance of the evidence.
Subjects shall be informed of the outcome of the investigation.
Any disciplinary or corrective action taken against the Subject resulting from
an investigation under this policy shall conform to the applicable academic or
personnel conduct and disciplinary procedures.
D. Investigators
1. Investigators are those persons authorized by the University to conduct fact
finding and analysis of cases of alleged improper conduct.
2. Investigators derive their authority and access rights from University policy.
3. Investigators are competent to conduct the investigation.
4. All investigators shall be independent and unbiased in fact and appearance. In
addition, they have a duty to be fair, objective, thorough, ethical and observant
of legal and professional standards.
5. An investigation shall be undertaken if preliminary consideration establishes
that: (a) the allegation, if true, constitutes improper conduct; and (b) the
allegation is accompanied by information specific enough to be investigated, or
(c) the allegation has or directly points to corroborating evidence capable of
being pursued.
VI.
Protection Against Retaliation
Whistleblowers and others who make protected disclosures in good faith shall not be retaliated against in
any manner, with the intent of adversely affecting the terms or conditions of employment or enrollment
(including, but not limited to, threats or physical harm, loss of job, adverse or punitive work assignments
or impact on salary or wages) and shall be protected from such retaliation by the University. This
protection from retaliation is not intended to prohibit supervisors or administrators from taking action,
including disciplinary action, in the usual scope of their duties and based upon valid performance-related
factors.
Whistleblowers and others who believe they are the subject of prohibited retaliation should promptly
report such actions to the Chief Compliance Officer.
VII.
Sanctions for False Claims
A Whistleblower who makes a claim under this policy in bad faith, or knows or has reason to know that
such claim is false or materially inaccurate, shall be subject to disciplinary sanctions, including
reprimand, suspension, demotion or, under appropriate circumstances, termination. In appropriate cases,
the University may also impose a fine on the Whistleblower equal to the costs of conducting the
investigation.
VIII
Oversight of Audit Committee
47
The administration of this policy is subject to the direct oversight of the Audit Committee of the Board of
Trustees. The Audit Committee shall receive regular reports of calls made to the hotline and the Chief
Compliance Officer’s responses.
IX.
Status and Amendment of Policy
The University reserves the right to amend this policy from time to time as the interests of the University
may require. This policy is intended as guidance for the reporting and investigating of allegations of
suspected of Improper Conduct. This policy does not create, nor should it be viewed as creating a
contractual obligation between the University and any faculty, employee, students and other person.
48