Sarbanes-Oxley FACTS  The law was enacted July 30, 2002  The law imposed new or enhanced governance and accountability standards on pubic companies in the for-profit sector  Total of 7 provisions  Two provisions apply to non-profits

Sarbanes-Oxley Provisions There are 7 main provisions that public for- profit companies are required to comply with: 1. Independent and Competent Audit Committee 2. Responsibilities of Auditors 3. Certified Financial Statements 4. Insider Transactions and Conflicts of Interest 5. Disclosure 6. Whistle-Blower Protection 7. Document Destruction

Non-Required Provisions (still a good idea)  If you have an audit committee, have it comprised of board members who are not also on staff, and if you are audited but don't have an audit committee, consider forming such a committee or task force  Prohibit loans from the organization to board members  If you have a financial consulting firm, choose one that is different from your auditing firm

More Non-Required Provisions  Have the full board approve compensation for the executive director and the top staff financial officer  Adopt an Ethics or Conflict of Interest Policy

WHISTLE-BLOWER PROTECTION  SOX makes it a crime to knowingly take any harmful action with the intent to retaliate against a person who provides law enforcement with truthful information relating to the commission or possible commission of any federal offense.

WHISTLE-BLOWER PROTECTION So what do you do to protect yourself and your organization? * Shore up accounting practices * Do an internal audit * Develop policies that show misconduct will not be tolerated * AND - Develop a whistle-blower policy

WHISTLE BLOWER POLICY - What the policy covers -- complaints about financial improprieties, ethical violations, other illegal activities - Allows for anonymous complaints - Reporting typically to HR director, but can be the Audit Committee, Treasurer, General Counsel. May be better if complaints are reviewed by an “outside” person or group - Some groups rely on 3 rd party vendors and a hotline for staff complaints - Promises prompt and discreet investigation - Outlines exactly how the employee is to make the complaint - Sample policies provided in your handout and an overview article from ASAE

DOCUMENT DESTRUCTION  It is a crime to alter, cover up, falsify, or destroy any document to prevent its use in an official proceeding (e.g., federal investigation, bankruptcy, proceeding before a court or Congress)  You can not persuade someone else to do it for you.

DOCUMENT RETENTION POLICY What should be covered in the policy? - Need to follow laws/regs (Fed and your state) regarding articles of incorporation, bank statements, personnel records, payroll, 401k, pension plans, contracts, leases, deeds, etc. - Official documents such as board minutes, committee summaries, etc. - Web licenses, computer license - Member data - and Voice mail - Periodicals, e-publications

DOCUMENT RETENTION POLICY What should be covered in the policy?  Include where these documents are to be stored – backup/archiving  And test the system you are using  Include who is responsible to ensure compliance  Include w review of documents when an employee is leaving the association

DOCUMENT RETENTION – Takeaways  Must develop, adopt a document retention/destruction policy and timeline  If there is an official investigation or you know one is imminent – suspend any document destruction - even if it follows the approved timeline  If you don’t comply – you can be fined or go to jail for up to 10 years!

SOX-CONCLUSIONS  It’s minimal dollar cost to implement the 2 provisions  While only two provisions apply to non-profits now, there is chatter that other mandatory provisions will be put into place.  If you can add the others, such as conflict of interest policy, independent audit cmte, and you will be ahead of mandatory requirements.  When you are in compliance or go the extra steps and put in the non-mandatory provisions, let your members know.  Transparency to your members builds trust and credibility for you and your association.

RESOURCES and REFERENCES  ASAE –  Knowledge Center  Articles, samples, models  Executive Management, Legal, and Finance Sections listservs  Put out a request or search the listserv archives  BoardSource –  Reference Papers  Samples and models  Google – Refine your search to non-profits!

IOWA’S MAC PRICING LAWSUIT  Background  March 14, Iowa state legislature passed a law regulating PBM management, including provisions requiring PBMs to disclose contract information regarding national compendia for pricing data as well as their calculation of the maximum reimbursement amount pricing  Additionally, the law creates a process to allow pharmacies to appeal or challenge the maximum reimbursement amount rates or maximum reimbursement amount list

IOWA’S MAC PRICING LAWSUIT  September 2, 2014-Pharmaceutical Care Management Association (PCMA) filed a lawsuit in Iowa’s federal district court challenging the legislation  PCMA argued a number of constitutional challenges to invalidate the state’s law, including preemption of federal law and protection of MAC pricing criteria as proprietary trade secrets

IOWA’S MAC PRICING LAWSUIT  Portions of PCMA lawsuit were dismissed earlier this Spring  PCMA amended its complaint to bring back in the issues dismissed in the partial summary judgment  Motion hearings but no oral argument set  The result of Iowa’s federal case provide guide for MAC pricing regulations.

BILLS THAT ARE NOW LAW  HB 279  Allows Florida pharmacists to administer all vaccines (including travel vaccines) recommended by the Center for Disease Control and Prevention to adults  Corrects and issue with pharmacist intern training by allowing Florida registered interns under the supervision of a Florida licensed pharmacist with an immunization registry to immunize patients

BILLS THAT ARE NOW LAW  HB 1049  Florida Pharmacy Act and rules adopted thereunder do not prohibit a veterinarian from administering a compounded drug to a or to the patient's owner or caretaker  Requires that each contract or contract renewal between a pharmacy benefits manager and a pharmacy require the pharmacy benefits manager to periodically update the maximum allowable cost pricing information  Requires procedures to eliminate or modify certain drugs from the list of those subject to maximum allowable cost pricing

OTHER THINGS TO KNOW…  Medical Marijuana  Low THC Status  2016 Statewide Referendum  Managed Care Issues  Network Closures  Potential Revisions During 2016 Legislature