Compliance Program Development and Implementation Flashcards

When designing a conflicts-of-interest policy, which disclosure mechanism is considered best practice?

Answer: Annual written disclosure combined with event-triggered reporting

Annual disclosures ensure ongoing visibility while event-triggered reporting captures new conflicts as they arise, together providing comprehensive coverage.

A compliance officer learns that the company's sales incentive plan may be driving improper conduct. What action is most appropriate?

Answer: Escalate to leadership and recommend redesigning the incentive structure

Root-cause remediation requires escalating to leadership to address the underlying incentive design, not just monitoring symptoms or issuing reminders.

Which regulatory body has authority to debar a company from federal contracting as a consequence of compliance failures?

Answer: General Services Administration (GSA)

The GSA's Debarment and Suspension Program has authority to exclude contractors from federal contracting, a significant consequence of compliance failures.

What does the term 'compliance by design' refer to in program development?

Answer: Building compliance controls into business processes from inception rather than retrofitting them

Compliance by design integrates regulatory requirements and controls into processes during development, which is more effective and cost-efficient than adding controls after the fact.

Which element is required for a valid Deferred Prosecution Agreement (DPA) between a company and the DOJ?

Answer: Agreement on compliance program enhancements and a monitor if necessary

DPAs typically include negotiated compliance program enhancements and may require an independent compliance monitor to verify remediation.

A compliance program review reveals that the compliance officer reports to the General Counsel. What is the primary structural concern?

Answer: The reporting line may compromise independence if legal matters conflict with compliance obligations

When compliance reports to legal, there is a risk that attorney-client privilege considerations or legal strategy may influence compliance decisions, compromising independence.

Which practice best demonstrates that a compliance program has adequate resources under DOJ evaluation criteria?

Answer: Compliance staff headcount and budget proportionate to identified risk exposure

DOJ evaluates whether compliance resources — staffing, budget, and technology — are commensurate with the organization's risk profile as evidence of genuine commitment.