Institutional Risk Recalibration: Benefits and Tools

1. Institutional Risk Recalibration: Benefits and Tools Sarah Waldemar, Director, Research Education and Oversight Pamela Webb, Associate Vice President for Research University of Minnesota NCURA Annual Meeting November 6, 2012

2. Strategic Risk Management: Balance between performance and responsibility Avoidance Strategic Reckless Innovation, Optimal Pursuit of Mission Ethics, Responsibility, Accountability Positive Responsible, deliberative & accountable strategic risk management as characteristic of good governance; risk versus benefit assessments; leveraging existing strengths Boards and leadership must manage the balance.

3. Next Steps: Policies, procedures, practices Institutional policies procedures & practices Compliance obligations = Burden X As Burden increases productivity, creativity and morale decrease; frustration & costs frequently increase. These factors are often beyond the U’s control These factors are within the U’s control Institutional policies, procedures and practices reflect institutional tolerance for risk. Review and revision of policies and procedures represent excellent starting points for the process of “recalibration”

4. Strategic Risk Management Initiative in the OVPR Responsible business process owners will examine current OVPR practices, procedures and policies using a risk/benefit approach to achieve enhanced performance guided by responsibility and accountability, while providing one or more of the following benefits: • More innovative approach to research mission • Reduction of unnecessary oversight (oversight >> risk) • Greater openness to opportunity • Enhanced competitiveness • Better staff engagement and empowerment • Increased efficiency; reduction of burden • Cost savings

5. OVPR Strategic Risk Management Initiative FY 11 • Developed a specific program with guidance materials, timelines and responsibilities FY13 and Beyond • Program must be incorporated into each unit’s annual work plan

6. Deliverable #1 Risks/Idea List OVPR Risk Recalibration Process Deliverable #2 Initiatives Selected Deliverable #3 Progress Report

7. OVPR Participation • Administration (Finance, Communications, IT) • Human Subjects Protection Program • Institutional Animal Care and Use Committee • Research Advancement • Research Integrity and Oversight • Sponsored Projects Administration • Technology Commercialization 82 = Number of projects proposed for Deliverable #1 66 = Number of projects selected for Deliverable #2 56 = Number of projects initiated/completed for Deliverable #3 85% of Deliverable #2 projects initiated or completed by project end date (June 30, 2012) balance in FY13 workplans

8. Sample Initiative – Institutional Animal Care and Use Committee (IACUC)Deliverable #1: Reduce Post-Approval Monitoring (PAM) frequency for PIs with excellent history of inspection findings.Deliverable #2:

9. Deliverable #3

10. Selected Highlights of Initiatives Undertaken

11. Process Change to Two Effort Periods GOAL: • Reduce administrative burden for PIs, Depts and SPA by reducing effort reviews by 33% per year (eliminate more than 10,000 statements/year) • Increase faculty satisfaction by allowing “blending” of summer effort with fall • Eliminate Summer Effort Policy/Forms POTENTIAL RISKS/BARRIERS: • Potential delays in closing out grants, submitting FSR’s and processing invoices if waiting for effort certification • Potential funding loss for late salary adjustments (awards already closed/financial reports submitted) • Potential increase in effort certification errors due to increased length of time a PI has to remember effort • Summer students have to be certified in both periods instead of just summer • Increase in administrative burden for Effort Coordinators due to need to review payroll charges with faculty more frequently • Effort coordinators may need to spend more time re-educating Certifiers on the concepts of certification and the use of ECRT (anecdotal comments from other Universities about this) • Potential failure to fulfill effort commitments (award already closed before effort is certified and commitment not met)

12. Outcome (after extensive consultation) • Changed to 2 effort periods effective with FY13 • Updated Effort Policy and added FAQs • Decommissioned Summer Effort Policy • Revised Cost Transfer Policy (added 60 day “regular” historical salary adjustment instead of allowing routine changes for entire effort period) • Revised the Effort Reporting System • Revised 9/12 Salary guidance documents • Revised Effort training class materials • Adding PI “continuing education” effort class

13. Other Stakeholder Engagement: Certified Approvers Objective: Identify policies for which the burden exceeds the risk.Reviewed 18 research policies; rated each on 3 criteria Examples Score Criteria

14. Cost Transfer Policy Revision of the policy is an example of recalibration to better align risk, benefit and burden. • Department Head no longer required to sign late cost transfers: benefit ≠burden. • Certified Approver sign off now required on salary cost transfers outside the allowable period as the risk was deemed high: benefit = risk.

15. Cost Transfer Policy • Allowable period for transfers increased to 60 days from the date the transaction posts: benefit = risk • PI verification of approval required for all late transfers: burden = risk • ECRT Office will review all re-certifications for allowability. If denied, salaries must be moved to program account: benefit = risk The recalibration identified an unaddressed risk (late salary transfers) but also removed burden that did not add to managing the risk.

16. Other Examples of Stakeholder Engagement Institutional Biosafety Committee Initiative: Streamline Institutional Biosafety application to eliminate redundancies, increase clarity and specificity, and expedite processing • Decreased number of missed renewal deadlines, reduced overall number of stipulations, expedited turnaround time/ reduced review time, and improved education for new researchers Controller’s Office Initiative Create simplified short-form external sales contract for high-volume, low-dollar, low-risk activities • Reduce burden and expedite transaction process for researchers and companies wanting to do business with the U

17. Moving Forwardhttps://excellence.umn.edu/index.htmlhttps://excellence.umn.edu/successes/recalibration.html University of Minnesota Institutional Risk Recalibration and Operational Excellence Research Risk Recalibration

18. President’s Operational Excellence 220 ideas

19. President’s Operational Excellence • Already In Place • Minnesota Innovation Partnerships (MN-IP) (Change in intellectual property approach.) • Cell phone allotments, augmentations, and expense reimbursements have been eliminated, reducing tracking and reporting burdens • Coming Soon • The equipment capitalization threshold will be increased from $2,500 to $5,000, reducing the volume of items we "count" by more than 30 percent. • External sales agreements are being simplified from eight pages down to one. • The University is consolidating more accounts receivable activity to use central capacity and reduce the burden on local units. • Vendors will be paid electronically rather than via a processed paper check.