Report on Compliance Functions and Covid

A survey of more than 300 compliance officers finds that roughly half of you have been exclusively working from home since the Covid-19 crisis started four months ago — and while that transition hasn’t been as bad as you’d feared, concerns about compliance failures and budget cuts are rising swiftly.

So says a report from the Society of Corporate Compliance & Ethics released Tuesday, which polled 343 compliance officers. Its main conclusion: Although the transition to the pandemic model of business has gone well so far, several dark clouds are gathering on the horizon. 

Let’s start with where you’re working. Forty-nine percent of respondents said they exclusively work from home, and another 29 percent said they mostly work from home. But a significant split exists between healthcare compliance officers and everyone else, where healthcare compliance professionals are much more likely to be working in the office. See Fig. 1, below.

That’s not surprising, considering how healthcare is a critical industry during the covid crisis and under enormous strain. 

Second, 56 percent of survey respondents said the transition to working remotely went better than expected, and another 40 percent said the transition went “about as expected.” So only a tiny fraction of compliance officers say the shift to working remotely was a bad experience. 

Covid Keeping You Busy

A significant number of respondents also said they have seen more compliance inquiries since the pandemic started in March — and again, there was a big split between healthcare compliance officers (42 percent reporting increases) versus everyone else (30 percent reporting increases). See Fig. 2, below. 

Also interesting: most compliance officers said the pandemic hasn’t hurt their collaboration with other departments. Indeed, 47 percent said their collaborations with senior leadership have actually increased in the last several months, compared to 41 percent who said it stayed the same and 13 percent who said collaboration with senior leadership decreased. 

Many also said collaboration increased with legal and HR departments, although 18 percent said interaction with the internal audit team fell. See Fig. 3, below. 

Overall we can take this data as good news for the compliance department. Your transition to remote working wasn’t that bad, and while you are seeing more inquiries to the compliance department, most of you aren’t isolated from the rest of the enterprise. 

On the contrary, lots of you are collaborating even more with other business functions — including, above all, the leadership team, which suggests that they understand the compliance function is an important asset right now. 

Bad News: Budgets and Compliance Failures

A majority of compliance officers said their budgets have not changed significantly since the pandemic began, but 23 percent said their budgets have been cut somewhat and another 13 percent said it’s been cut “a great deal.” 

Healthcare compliance officers were more likely to report budget cuts, but that’s not a surprise considering (a) their expenses for covid-related care are soaring, and (b) their revenues from other forms of care have been falling at the same time since nobody is going to the doctor for other reasons. 

At the same time, 77 percent of respondents also said they worry that Covid-19 is increasing the risk of a compliance failure. See Fig. 4, below. 

The SCCE report doesn’t define what those compliance failures might be. That’s a bit disappointing because the failures could range from privacy breaches to corruption or failure to file required reports, and much more. Perhaps a future report can split out exactly what types of compliance failures worry CCOs most, but this is an excellent place to start anyway. 

This is the third report about how coronavirus is affecting risk and compliance professionals released this month. The Institute of Internal Auditors released a similar report two weeks ago, and the Association of Certified Fraud Examiners released one at the beginning of June. 

All basically say risks are rising, most audit and compliance executives are working remotely, and budgets are generally holding steady — for now, at least. Let’s hope that lasts.