Compliance and Ethics at UCF
Rhonda L. Bishop
Chief Compliance and Ethics Officer
LIFE @ UCF
January 22, 2013
Agenda
 Overview of Compliance, Ethics, and Risk Office
 Mission and Purpose
 What is Compliance?
 What is Ethics?
 What is Enterprise Risk Management?
 Cases in Higher Education
 How to Respond
 Ethical Leadership
Overview of Office
 Started in May 2011
 Report to university president, administratively to
chief of staff, and to the Board of Trustees
 Responsible for the development of a compliance,
ethics, and enterprise risk management program
 Oversight responsibility
 Assigned responsibility for the athletics
compliance program in November 2011
 Mission: The University Compliance, Ethics, and
Risk Office provides oversight and guidance to
university-wide ethics, compliance, and enterprise
risk management activities, and fosters a culture that
embeds these disciplines in all university functions
and activities.
Purpose: As a newly established office and program,
our office provides centralized and coordinated
oversight of the university’s ethics, compliance, and
risk mitigation efforts through the ongoing
development of effective policies and procedures,
education and training, monitoring, communication,
risk assessment, and response to reported issues.
Requirements for Higher
Education
 Chapter 8 of the U.S. Federal Sentencing
Guidelines
• Contains seven elements for an effective program
• Defines the responsibility of the board, president,
senior leadership, and the compliance and ethics
officer
Elements of an Effective Program
1.
2.
3.
4.
5.
6.
7.
Oversight
Standards and Procedures
Education and Training
Monitoring and Auditing
Reporting
Incentives and Disciplinary Measures
Response and Prevention
•
Risk Assessment
•
Effectiveness Assessment
8. “Promote an organizational culture that encourages ethical
conduct and a commitment to compliance with laws.”
Responsibility
 Board
 President and Senior Leadership
 Chief Compliance and Ethics Officer
 Employees
What is Compliance?
The process of meeting:
 The expectations of external stakeholders
who grant us money, pay for our services
and regulate our industry
 The internal expectations of our
organization
What is Ethics?
 Merriam-Webster Dictionary
1. Discipline dealing with what is good and
bad, with moral duty and obligation
2. Set or system of moral values and
principles
3. A guiding Philosophy
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What is E.R.M.?
“A process, affected by an entity’s board of
directors, management and other personnel,
applied in strategy setting and across the
enterprise, designed to identify potential
events that may affect the entity, and to
manage risks to be within its risk appetite, to
provide reasonable assurance regarding the
achievement of entity objectives.”
COSO – Committee of Sponsoring Organizations of the Treadway
Commission
Governance, Risk Management,
and Compliance (GRC)
 Governance – establishes objectives and high level
boundaries
 Risk Management – identifies and addresses potential
obstacles
 Compliance – ensures boundaries are well set and
identified and that business is conducted within those
boundaries
 Ethics – builds a strong culture and provides a safety
net in the absence of controls
C.E.M.
 Fraud
 Conflicts of Interests
 Conflict of Commitment
 Scientific Misconduct
“Tough situations don’t build character…
tough situations reveal character!”
2008 Degree Scandal
First Identification of
Student Name by the Media
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Virginia Commonwealth University
 Failure to obtain 30 credit hours in residence
 No exception to that requirement was requested
or approved
 Student afforded preferential treatment
throughout the degree granting process
 More than one employee overlooked or
disregarded institutional policies and procedures
 President’s name invoked in allegations
VCU Findings
 Investigation of over 15,000 degrees demonstrated
only two degrees did not meet residency requirement
 VCU met all SACS requirements for policies and
procedures
 Investigation found no systemic failures
 Identified opportunities to strengthen process
 Two university deans resigned and a faculty member
provided with a letter of counsel and caution
VCU Corrective Actions
 Revised degree revocation policy
 Strengthened language on graduation application form
 Communication of student’s responsibilities to
understand and satisfy graduation requirements
 Developed transfer and advising manual
 Developed degree audit function and registrar audit
 Code of Ethics, Creed and Code of Conduct training
 Compliance and Audit added annual reviews to work plan
West Virginia University
 Awarded a retroactive degree to a former executive
MBA student due to uncertainty surrounding the
student’s records
 Records later proved to include the falsification of
grades
 Provost and dean of the business school resigned
 Later in June of 2009 the president resigned
Carnegie Mellon University
 Error in judgment involving the approval of
excessive transfer credits and excessive units for
independent study in lieu of course work for a
student who received a master’s degree
 Dean of the Heinz School of Public Policy and
Management resigned
Penn State Sex Abuse Scandal
 Sexual assault by Jerry Sandusky, former assistant
football coach, of at least eight underage boys
from 1994 to 2009
 Abuse occurred on or near university property
 Allegations that senior school officials were aware
and failed to respond
 Grand jury investigation
 June 22, 2012 Sandusky found guilty on 45 counts
of sexual abuse
 Sentenced to 30 years minimum and 60 years
maximum
Penn State - C.E.M.
 Gary Schultz, senior vice president and Tim
Curley, athletics director charged with perjury and
failure to report child abuse
 President Graham Spanier forced to resign
 Joe Paterno, head football coach fired
 Tim Curley, athletics director fired
 Steve Garban, stepped down as chair of the PSU
board of trustees, later resigned after Freeh report
 Nov. 1, 2012, Spanier, Curley, and Schultz
charged with grand jury perjury, conspiracy,
obstruction of justice, and child endangerment
Freeh Report
 Independent review by Louis Freeh and his law
firm
 Stated that Spanier, Paterno, Curley, and Schultz
had known about the allegations of child abuse as
early as 1998 and were “complicit in failing to
disclose them”
 Recommendation for the development of an
institutional compliance and ethics program
 Athletics compliance should report to Chief
Compliance and Ethics Officer
Additional Penalties
 Fined $60 million by NCAA
 Sanctions by NCAA including 5 year probation
 Fined $13 million by Big Ten conference
 Federal criminal probe by local U.S. attorney
 Investigation by the U.S. Dept. of Education for
failure to comply with the Clery Act
 Civil Suits
Cost of Non-compliance
 Johns Hopkins University 2.6 million
 University of Alabama at Birmingham $3.4 million
 Mayo Foundation $6.5 M
 University of Minnesota $32 M
 University of South Florida $4 M
 Florida International University $27 M
 Penn State $73 M and counting…
Double Dipping Couple
 Researchers recruited by University of Minnesota
 Under contract by Georgia Tech while working at
Minnesota
 Led to grand jury indictments and conviction in
Georgia
 Restitution to Georgia Tech
 January 2013 forced to resign from University of
Minnesota
Cheating Statistics
College Students:
High School Students:
 20% reported cheating in
1940
 49% reported cheating in
1993
 75% to 98% 2003 to 2011
 Engineering and business
majors more likely to
cheat
 Cheating declined in 2012
for the first time
 51% reported cheating in
2012
 59% reported cheating in
2010
 Cheating begins in middle
school
Source: Josephson Institute for Ethics
What Drives Ethical Failures?
 Pressure to succeed
 Competing incentives
 Different values
 Focus on short term
 Belief they will not be caught
 Minimize the wrong doing
2011 National Business Ethics Survey
 45% of employees witnessed misconduct at work (49% in
2009 and record high of 55% in 2007)
 65% reported the bad behavior they saw (63% in 2009;
record low 53 % in 2005)
 22% who reported misconduct say they experienced some
form of retaliation in return (12% in 2007 and 15% in
2009)
 13% of employees perceived pressure to compromise
standards in order to do their jobs (shy of the all-time high
of 14 percent in 2000
 The share of companies with weak ethics cultures also
climbed to near record levels at 42%, up from 35% two
years ago.
Source: ETHICS RESOURCE CENTER
How to Respond








1982 Tylenol Case
Remediation and rectification
Be prepared – risk assessments
Put together a team
Be accountable
Be transparent and communicate first
Take quick corrective actions
Develop long term solutions
Elements of an Effective Program
1.
2.
3.
4.
5.
6.
7.
Oversight
Standards and Procedures
Education and Training
Monitoring and Auditing
Reporting
Incentives and Disciplinary Measures
Response and Prevention
•
Risk Assessment
•
Effectiveness Assessment
8. “Promote an organizational culture that encourages ethical
conduct and a commitment to compliance with laws.”
“Integrity, scholarship, community,
creativity, and excellence are the core values that
guide our conduct, performance, and decisions.”
The UCF Creed
UCF Values
Values serve as a
moral compass
Guides us through
complex dilemmas
about right and
wrong
Litmus Test
Other Sources of
Guidance:
Policies and Procedures
 Ethics and Compliance work together
 Communicates expectations
 Boils down volumes of Federal and State Laws
 Protects employees and the University from the
risk of non-compliance
 Policies and procedures are the floor
Building an Ethical Culture
There are only two ways:
1. Hire
2. Promote
…employees with integrity
and parallel values
What makes an ethical leader?
Slightly more than one in ten Americans believes their company’s
leaders are ethical and honest (Maritz Research)
Seven Habits of an Ethical Leader
1. strong personal character
2. a passion for doing right
3. a proactive behavior
4. keeping the stakeholders’ interests in mind
5. a recognition of their value as role models
6. an awareness that decision making should be
transparent
7. a holistic view of human beings
“I” Project Competition ICAC Winners – Azul, Kiran, Nidhi, Yifan
Ethical Leadership
 Lead by example – one person can make a
difference
 Educate yourself - be aware and understand our
policies and procedures
 Use ethics in your decision making
 Exhibit selflessness
 Don’t be afraid to ask for help or raise concerns
 Speak up
No One Said it Would Be Easy
 Doing the right thing is not always
easy
 Competing Incentives
 Lead for long term results not short
term successes
 Must be visibly ethical and consistent
Rhonda’s 4 Rs
 Respect
 Responsibility
 Reconcile
 Remember
Quotes
 “Good people do not need laws to tell them to
act responsibly, while bad people will find a
way around the laws”
 Plato ~ 400 BC
 “Always do right, this will gratify some and
astonish the rest.”
Mark Twain
 “That you may retain your self respect, it is
better to displease the people by doing what
you know is right than to temporarily please
them by doing what you know is wrong.”
William J. H. Boetcker
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Thank You
Contact Information:
Rhonda L. Bishop
University Compliance and Ethics
Office
Millican Hall, Rm 350
Rhonda.Bishop@ucf.edu
823-6263