Insights from the Healthcare Compliance Certificate - European Program in Paris

Below, Weng Yee shares her key insights on Data Driven Analysis for Compliance Programs.

Current Environment

‍There have been at least 26 life science companies involved in Foreign Corrupt Practices Act (FCPA) matters in the last five years (2013 - 2018). Today, investigations into a number of large corporates in the life science sector continue to hit the press, signaling that regulators have far from taken their foot off the gas pedal on investigations into bribery and corruption within this sector.

These investigations reinforces the importance of adequate books and records and internal controls.

Applying Forensic Accounting for an Effective Compliance Program

For an effective compliance program, forensic accounting procedures are used to:

• Address specific questions when considering areas of risks for your operations,
• Assess appropriateness of the controls designed (in mitigating compliance risks), and
• Perform continuous monitoring of financial and non-financial trends/data points to identify outliers or potential violations of the established systems and protocols

Key consideration, when performing financial analysis in the context of an anti-bribery and corruption review, include:

• Key business risk areas, e.g. third parties, fee for service, incentive compensation, etc.
• Key accounting risk areas, e.g. controls over funds, inappropriate vendors, high risk tenders, etc.

Data Analytics & Tools in an Effective Compliance Program

Data can be voluminous, and sometimes overwhelming. To "find the needle in the haystack", considering using data analytics to help with data visualization, triage information between different datasets, perform rule-based tests, risk ranking and text mining.

When faced with budgetary and resources constraints, compliance team should look at how technology can help, for example:

• Deploying tools to run algorithms designed to identify flag potential red flag transactions
• Data visualisation tools to identify anomalies and outliers
• Performing data analytics on static data on a regular interval, e.g. quarterly basis, on high risk transactions or operations

Footnotes:

TRACE Compendium: https://www.traceinternational.org/compendium#results

‍Stabroek News: https://www.stabroeknews.com/2019/news/world/05/18/fbi-targets-johnson-johnson-siemens-ge-philips-in-brazil-graft-case-sources/

‍Reuters: https://uk.reuters.com/article/uk-brazil-corruption-sec-china-exclusive/exclusive-u-s-sec-probes-siemens-ge-philips-in-alleged-china-medical-equipment-scheme-sources-idUKKCN1T516A

https://law.shu.edu/compliance/health/europe/index.cfm