October 17 , 2005
Trust Line offers safe way to report fraud
BY Michael Terrazas
In its continued efforts to promote the highest degree of financial transparency and voluntarily adopt governance practices mandated for public companies, the University has expanded the Emory Trust Line—implemented by Emory Healthcare (EHC) in 1999—to cover the entire enterprise.
The Trust Line (1-888-550-8850) offers a safe, easy and anonymous way for members of the Emory community to report suspected fraud or financial misconduct without fear of reprisal from their supervisors or administration. It is staffed 24 hours, seven-days-a-week by an outside company that gathers appropriate information from callers and then forwards that information to Emory audit and compliance officers, who may then pursue an investigation.
Such a “whistleblower” line is part of Emory’s voluntary adoption of ethical and financial management practices mandated for for-profit entities by the Sarbanes-Oxley Act of 2002. Nonprofit operations like Emory are not covered under Sarbanes-Oxley, but most of Emory’s peer institutions have voluntarily adopted much of the legislation. The Trust Line is the latest in a series of efforts designed to voluntarily comply with the law.
“Most of the recommendations in Sarbanes-Oxley are geared simply toward sound, ethical business practices, regardless of whether an organization is a Fortune 500 company trading on Wall Street or a top-tier research university—good governance principles should be fundamental elements of any operation,” said Mike Mandl, executive vice president for finance and administration. “The Trust Line is another example of a business practice that makes sense for us. It is important that those who invest in us (e.g., the government, donors, parents) have confidence in our leadership and governance principles and practices.”
It could also save Emory a lot of headaches. Lest anyone think financial fraud or unethical behavior is limited to the corporate world, The Wall Street Journal recently reported on a series of cases of misconduct involving major research universities and federal grants, all settled out of court for millions of dollars.
“Oh, it has happened,” said Anne Adams, EHC chief compliance officer, speaking of investigations prompted by calls to the Trust Line. Adams has monitored the EHC Trust Line since it was established six years ago, and she now performs a “triage” function for the broader University line, sending Trust Line calls to the appropriate office. She will work with Emory Chief Audit Officer Bill Mulcahy in managing the expanded line.
Not all calls of perceived injustices or misconduct are appropriate for the Trust Line. For example, any human resource-related issues—such as alleged discrimination or violation of equal opportunity policies—should still be directed toward departmental Human Resources representatives or the Office of Equal Opportunity Programs.
In fiscal year 2005, the EHC Trust Line received a total of 87 calls—71 were from people simply checking to make sure the line existed, seven concerned HR-related matters such as those described above, and four more were categorized as “other” non-appropriate calls. But that still left five calls that were pursued.
“A tipster may fall into the category of disgruntled employee from time to time, but many times they’re right about the facts they’re giving the anonymous tip about,” Mulcahy said. “It becomes a management challenge to get to the bottom of those facts.”
Mulcahy said ultimately the Trust Line is a governance tool for Emory’s leadership and the Board of Trustees; the board and its committees wanted a way for employees to report issues internally to be investigated and resolved. Summaries of calls and resolutions are reported to those board committees. If an anonymous tip alleges misconduct by audit or compliance officers, or by senior administrators, the call goes straight to the board to ensure a full and unbiased investigation.
Of course, not all tipsters insist on confidentiality. Adams said most investigations from her office are prompted by people who call her office directly, and that is certainly still an option for both EHC and University employees. To reach the EHC compliance office, call 404-778-2757. To reach the University Division of Internal Audit, call 404-727-6146. In the coming months, there will be sessions planned to educate the community on the Trust Line and the types of matters that should be reported. Anyone interested in attending a training session should contact the internal audit office.