How to create an effective compliance program for your tribal entity
It’s easy to see compliance efforts as an added cost to your tribal entity. However, with a capable program to manage risk and regulatory concerns, it’s an opportunity to add value for tribal customers and enhance post-award reporting processes.
For tribal organizations with limited resources, compliance is a way to maximize what you have while minimizing the reporting burden. The right program can help you identify errors and inefficient processes that are leading to waste or abuse. It also helps ensure that your organization will be able to maintain necessary funding and licenses while meeting post-award reporting requirements. This is particularly important for grant management and compliance reporting in tribal entities.
But compliance isn’t just about operations — it’s also about reputation.
8 factors that influence ethical compliance of tribal entities
Strong compliance programs telegraph that your organization is trustworthy. Your stakeholders expect that tribal entities are using resources efficiently and adhering to ethical standards set by the tribal government. Tribal customers and vendors are more willing to engage with and support organizations that show a commitment to the effective use of resources and maintain an ethical environment.
Poor compliance places your tribal recipients in a position of potentially losing funding, resources and constituent support. So, while a compliance program does require constant effort from compliance professionals, it’s worth it for the value it can bring to your organization and tribal customers.
If you want to improve compliance within your tribal entity, here are eight components of an effective compliance program that you can implement:
1. An established charter
The backbone of a good compliance program is a charter.
The charter should indicate the objectives of your program, as well as the varying levels of authority and responsibility for those involved including compliance professionals. Having this information clearly detailed from the beginning makes it easier to convey standards to the rest of the organization and helps eliminate confusion during implementation of post-award reporting processes.
2. A holistic approach
Effective compliance functions consider both external and internal factors.
External factors encompass things such as meeting regulatory compliance expectations and conducting risk assessments. They include instances where tribal recipients are required to meet certain regulatory standards for legal, federal funding or licensing reasons — for example, Title 31 compliance for tribal casinos or the 477 Program for tribal governments.
Internal factors are the expectations and standards set by your organization and its stakeholders. This includes things such as your organization’s code of conduct and separation of duties.
These factors are often treated as separate issues, but the better approach is to encompass both under an overarching compliance program and compliance culture.
Taking a more holistic approach can help you identify overlapping controls and run your organization’s compliance program more efficiently, benefiting both tribal recipients and tribal customers. This approach can also help address issues like broadband access for tribal communities, which is crucial for modern compliance and reporting systems.
3. Data analysis
Data analysis is an effective way to help your organization identify instances of errors, waste, abuse and noncompliance. Compliance data analytics evaluates the results of actual processes operating over time, eliminating behavioral changes when monitored. It also doesn’t require separate processes since necessary data is usually generated as part of your organization’s day-to-day operations and post-award reporting.
For example, your financial team is already collecting data on things such as accounts payable, payroll and accounts receivable. By analyzing this compliance data, you can test for suspicious behaviors that indicate abuse, such as unauthorized payments, overpayments or payments made at unusual times. You can also look for compliance issues with missing or incorrect information in post-award reporting, which can help reduce the reporting burden for tribal customers.
But financial data isn’t the only information that you need. Feedback from tribal customers, employees and stakeholders is also valuable in identifying potential problems and inefficiencies. This customer experience reporting can be crucial for improving your compliance program metrics.
When analyzing data, it’s important to make sure that you’re starting with complete and accurate data sets, as this eliminates the potential for errors in post-award reporting. It’s also helpful to determine your goals for the data ahead of time, so that you can be more intentional with your testing and generate actionable insights for your compliance metrics.
Support from senior leadership
Leadership within your organization needs to be visibly supportive and actively involved in compliance and post-award reporting processes.
Their attitude toward compliance will trickle down to the rest of the organization, helping to create buy-in at all levels and fostering trust in leadership. Their support ensures that your program will have access to any necessary resources for compliance professionals and tribal recipients.
5. Organizational perception
Along with support from senior leadership, it’s important to consider how compliance is perceived within the organization and its impact on employee engagement.
As much as possible, you want to highlight the ability of individuals and the overall entity to succeed while meeting compliance objectives requirements and post-award reporting obligations. It shows how compliance isn’t about being prohibitive, but rather aligning individuals with the values of the company and improving operational efficiency for the benefit of tribal customers. Conducting a culture audit can be an effective way to assess and improve this organizational perception.
6. Appropriate resources and training
Your compliance program can’t be successful without the necessary resources and proper training for your compliance professionals and other staff.
Part of that training will need to incorporate any technical concerns. For example, when complying with data security standards, you may need to train your people on how to identify phishing attempts.
But you also need to train them on your expectations for ethical conduct. Make sure that every individual clearly understands the code of conduct and responsibilities outlined in your charter, including potentially acknowledging the receipt, understanding and commitment to follow the organization’s requirements and post-award reporting procedures.
7. Monitoring compliance
A compliance program isn’t done once you’ve finalized your charter. It requires regular monitoring to ensure that your established controls and objectives are both being met and still meeting your organization’s needs.
With monitoring, it’s important to remember that compliance is everyone’s responsibility, not just that of compliance professionals.
According to the Association of Certified Fraud Examiners, 55% of occupational fraud is reported by employees. Your compliance team should encourage everyone in the organization to participate in monitoring and allow input when designing and remediating different controls. This approach can also help with post-award reporting accuracy and completeness, reducing the overall reporting burden.
8. Course correction
With monitoring, comes course correction. When you identify areas of weakness in your program or post-award reporting processes, you need to determine the reasons for them and create a plan to address them.
To create a tribal entity remediation plan, ask these three questions:
- Are compliance objectives properly designed for the current operations?
- Are sufficient resources provided to be successful?
- Is the response proportional to potential compliance failures?
These will help you identify why the control failed and how to make the appropriate corrections, ensuring that tribal recipients maintain compliance and meet post-award reporting requirements.
How Wipfli can help with tribal entity compliance
Wipfli is here to help provide the compliance program guidance that your tribal organization needs. Our experienced team can help you identify risks, review controls and use data analytics for increased fraud detection.
Contact us today for more on how we can support your organization’s compliance efforts.
Is your tribal entity doing enough to detect fraud? Register for our upcoming webinar, Anti-fraud best practices for tribes, for more ways that you can protect your organization.
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