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RULE §701.9Report and Investigation of Compliance Violations

(a) The Chief Compliance Officer oversees the Institute's activities related to the report and investigation of suspected compliance violations, including fraud, waste, and abuse.

(b) To encourage good faith reporting of suspected noncompliance, the Institute shall establish a system to receive confidential reports of suspected instances or events that failed to comply with the Institute's applicable laws, rules and policies, including allegations of fraud, waste, and abuse. The Institute may use a telephonic and/or electronic mailbox system, such as an "ethics hotline" to preserve confidentiality of communications regarding suspected compliance violations and the anonymity of a person making a compliance report or participating in a compliance investigation.

  (1) Information describing how to report a suspected compliance violation, including a designated telephone number and electronic mail address for confidentially reporting suspected compliance violations, shall be displayed on the Institute's Internet website and included in all Institute contracts and agreements.

  (2) Information describing how to report a suspected compliance violation shall be included in the Institute's employee policies manual, and discussed internally with Institute Employees and included in ethics training sessions.

  (3) Only good faith reports made to the designated telephone number or electronic mailbox shall be investigated.

(c) The Institute shall implement procedures to investigate a good faith report of a suspected violation, including:

  (1) The prompt initiation of an investigation by the Chief Compliance Officer;

  (2) Assignment to an appropriate individual or individuals to conduct the investigation, including the Audit Subcommittee, the Compliance Office, General Counsel, the Internal Auditor, or outside experts or advisors; and

  (3) A recommendation for appropriate corrective actions, if any are warranted by the investigation, made to the Oversight Committee.

(d) To the extent allowed by law, the Institute will preserve the confidential nature of the good faith report of a suspected violation, including the identity of the individual submitting the report.

(e) The Chief Compliance Officer shall maintain a log that tracks the receipt, investigation, and resolution of reports made regarding compliance violations.

(f) In performing duties under this rule, the Chief Compliance Officer has direct access to the Oversight Committee. The Chief Compliance Officer shall report to the Oversight Committee at least quarterly on compliance activity.

(g) The following information is confidential and not subject to disclosure under Chapter 552, Texas Government Code, unless the information relates to an individual who consents to the disclosure:

  (1) information that directly or indirectly reveals the identity of an individual who made a report to the Institute's Compliance Program office, sought guidance from the office, or participated in an investigation conducted under the Compliance Program;

  (2) information that directly or indirectly reveals the identity of an individual who is alleged to have or may have planned, initiated, or participated in activities that are the subject of a report made to the Compliance Program if, after completing an investigation, the Compliance Program determines the report to be unsubstantiated or without merit; and

  (3) other information that is collected or produced in a Compliance Program investigation if releasing the information would interfere with an ongoing compliance investigation.

(h) The Oversight Committee may meet in a closed session under Chapter 551, Texas Government Code, to discuss an on-going compliance investigation into issues related to fraud, waste or abuse of state resources.

Source Note: The provisions of this §701.9 adopted to be effective March 2, 2014, 39 TexReg 1380; amended to be effective December 7, 2016, 41 TexReg 9526

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