2. Christie Stelling, CPA, CIA Assoc. Director, Finance Financial Controls

3. Objectives of this Training Safeguarding Institutional Assets Responsibility and Accountability What Could Happen? Questionable Conduct & Violations

5. Safeguarding Institutional Assets We must all be good stewards of institutional funds and make decisions based on several factors.

6. Safeguarding Institutional Assets Decision-making should include ensuring all expenses are: Consistent with institutional policies and procedures Allowable based on fund source stipulations Accurate Reasonable Supported by proper documentation Directly benefiting the Institution’s mission

7. Financial Policies Alcoholic Beverages Policy Asset Management Policy Manual Business Entertainment Policy Cash Handling Policy Manual Employee Reimbursement Policy Gifts Policy Internal Control Policy Inventory Policy Memberships Policy Procard Sales Tax Policy Travel Management Policy Safeguarding Institutional Assets Source: Institutional Policies and Procedures located on the intranet

8. Safeguarding Institutional Assets Determining Expense Allowability Each fund group has specific restrictions based on the source of funds. Fund Expenditure Guidelines PRS Guidelines & Policies

9. Fund GroupOverview Education & General (E&G) Company 1 Funds are provided by a combination of state appropriations and local institutional income. All expenditures from these funds must meet restrictions established by the State of Texas and be necessary to operate the department. Designated Funds Company 3 Funds are from multiple sources: Unrestricted Gifts, IRG’s, Private Industry residuals, Internal Service Centers, Patent Royalty allocations. Expenditure restrictions are based on the specific funding source within the group and must be related to the specific purpose or program designated for the company base center. Physicians Referral Service (PRS) Company 4 Company centers within the PRS fund group are established for specific purposes as defined by PRS. Please visit the PRS website for more information. Restricted Gifts Company 8 Funds are gifts with a legally restricted purpose designated by the donor. Expenditures from these funds must fall within the specific restrictions and must directly support the intended purpose of the fund. Restricted Grants & Contracts Company 9 Funds are grants and contracts from organizations or agencies. These funds are covered by specific federal, foundation, industry grant or contract agreements. Expenditures must directly support the work of the grant and must adhere to any restrictions/terms outlined in the agreement. Safeguarding Institutional Assets For detailed guidelines on fund group expenditures, please see the Fund Expenditure Guidelines located on the Finance Division intranet site.Fund Expenditure Guidelines

10. Safeguarding Institutional Assets Fund GroupContact 1Financial Forecasting & Analysis (713-563-2242) 3Gifts (31*): Development Office (713-792-3450 or 800-525-5841) Gift Allocations (34*): Research Finance (713-745-9464) Service Centers (37* or 38*): Controller’s Office (713-563-2282) Other: General Accounting (713-745-9550) 4PRS (713-792-7600) 7Financial Forecasting & Analysis (713-563-2242) 8Gifts (81*): Development Office (713-792-3450 or 800-525-5841) Restricted Gift Allocations (84*): Research Finance (713-745-9464) 894*: Research Finance (713-745-9464) 9Grants & Contracts Accounting (713-745-9400)

11. Safeguarding Institutional Assets Just because an expense complies with policy does not make it reasonable or beneficial to the institution.

12. Safeguarding Institutional Assets Defining Reasonable Wise Sensible Not excessive or extreme; moderate Sound-thinking Fair; equitable Rational Showing reason or sound judgment

13. Safeguarding Institutional Assets Questions to ask yourself: 1. Is this the best use of institutional funds? 2. Are institutional funds best spent on this instead of patient care, research, education, etc.? 3. Can I defend this decision to division and executive management if the expense is questioned? 4. How would individuals external to the institution view this expense?

14. Safeguarding Institutional Assets All expenses must directly benefit the Institution’s mission: The mission of The University of Texas M. D. Anderson Cancer Center is to eliminate cancer in Texas, the nation, and the world through outstanding programs that integrate patient care, research and prevention, and through education for undergraduate and graduate students, trainees, professionals, employees and the public.

15. Responsibility & Accountability Internal control is everyone’s responsibility

16. Responsibility & Accountability M. D. Anderson’s Role The Institution is responsible for encouraging the establishment of strong internal controls by developing policies and procedures, setting goals and expectations, communicating responsibilities, and encouraging employees to act ethically. Examples: Institutional Policies and Procedures, Code of Conduct, Core Values, Fraud & Abuse Hotline

17. Responsibility & Accountability Divisional & Departmental Roles Division and department personnel are responsible for developing an appropriate internal control structure within their area of responsibility and ensuring actions taken meet institutional guidelines, are in compliance with applicable rules and regulations, and properly safeguard institutional assets. Delegating responsibility does not relieve an individual from being accountable for activities under his/her direction.

18. Responsibility & Accountability Internal controls affect every employee at M. D. Anderson Cancer Center All employees are responsible for Adhering to institutional policies Safeguarding institutional assets Exercising sound business and financial practices Ethically performing his/her responsibilities

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20. What Could Happen? Mission will not be achieved Negative media attention Loss of reputation and/or funding Legal and/or disciplinary action “It takes 20 years to build a reputation and 5 minutes to ruin it.” - Warren Buffet

22. Questionable Conduct & Violations It is every employee’s responsibility to report any questionable conduct or suspected violations of the laws, regulations, or M. D. Anderson policies to the Institutional Compliance Office or Fraud and Abuse Hotline.

23. Questionable Conduct & Violations Checklist for Unethical Issues: Does the action comply with M. D. Anderson Cancer Center’s policies and procedures? Is the action legal? How would the action look to your family, friends, patients, and community if published on the front page of the newspaper? Would the action make you feel bad if you did it? Are you being fair and honest?

24. Compliance Concerns Report compliance concerns 24 hours a day, 7 days a week to: Fraud and Abuse Hotline at 1-800-789-4448 Institutional Compliance Office directly at 713-745-6636 Chief Compliance Officer via the Page Operator at 713-792-7090