• The 2005 VA annual report to Congress regarding the NPCs was delivered to the House and Senate Committees on Veterans Affairs earlier today.  The executive summary and Excel spreadsheets that comprise the report are posted on the NAVREF web site at http://www.navref.org/library/Annual_Reports.htm  Additionally, NAVREF has posted a one-page summary of annual report highlights that we encourage NPC staff to share with the board of directors.
• The June 1 deadline for year 2007 submission of NPC annual reports to VA is fast approaching.  NAVREF recently confirmed with Amy Centanni, director of the VA NPC Program Office, that the June 2007 annual report requirements are the same as those for 2006.

As in previous years, the report will require both hard copy and electronic submissions.  However, this year there will be no web-based submission process for electronically provided data.  Instead, NAVREF has been working with Mary Thornton, chief operating officer of the Palo Alto Institute for Research and Education (PAIRE), to update the Excel worksheets used successfully a few years ago.  NPCs will attach the completed Excel file to an email sent to the VA NPC Program office on or before June 1.  Hard copies should be sent by Federal Express or other trackable delivery in time for delivery by June 1.

Ms. Thornton has enhanced the worksheets with formulas and links to facilitate data entry and to reduce the possibility of errors.  At this writing, four NPCs are beta testing the worksheets and the instructions.  Many thanks to Ms. Thornton and the beta testers – Lorie Moll, Lynne Moffitt, Donna Wilt and Jude Harlan – for their hard work.

Ms. Centanni will email the worksheet file and submission instructions to NPCs a few weeks before the June 1 deadline.  Both also will be posted on the NAVREF web site.  Please watch for an email in May from Ms. Centanni.

Reminder:  It is very important that all NPCs submit the report on time.  Please plan accordingly.

NAVREF members will recall that the VA Office of Audit of the Inspector General and auditors from the Financial Assistance Section of the Office of the VHA Chief Financial Officer (Austin, Texas) are reviewing NPCs.  Instead of following on the heels of the Austin Auditors with another review of Northern California Institute for Research and Education (NCIRE), the IG auditors instead decided to review the Loma Linda Veterans Association for Research and Education (LLVARE).  They concluded the first phase of their LLVARE review on March 16 and are expected to select at least two more NPCs for visits in the coming months.

LLVARE executive director Gayle Lee reports that the seven IG reviewers who spent two weeks on site were particularly interested in the following operational issues and offers the following suggestions:

• Payroll – For joint NPC/VA employees, ensure that there is no overlap in time worked or duties.  Work performed for NPC pay must be distinct from VA duties.  Verify that a supervisor signs every time sheet.
• Equipment – Track all NPC-purchased equipment from date of purchase through disposal; keep a current inventory and verify the location of all items at least annually; tag NPC equipment for identification.  Additionally, be sure to track sponsor-provided equipment similarly.
• Computer security – Regularly test password protected access to office computers and accounting systems.
• Policies – Establish comprehensive written policies for all aspects of NPC operations and follow them.

At this writing, the IG has not announced the NPCs selected for the remaining IG visits.  The VHA report regarding the VA Technology Transfer Program, the Institute for Medical Research (IMR), NCIRE and the Seattle Institute for Biomedical and Clinical Research (SIBCR) is expected to be released shortly, and the IG is scheduled to issue its report on August 31.

NPCs may be interested in a few more details about two items discussed during the April 16 ORD Hotline call:

• Data Security – As discussed during the call, the April 11 memo regarding “Certification by Principal Investigators: Security Requirements for VA Research Information.” is posted at http://navref.org/newsletter/pdf/VA_ORD_Security_reqs_041107.pdf

NAVREF encourages NPCs to check the R&D Data Security web site and FAQs for updates - http://www.research.va.gov/resources/data-security/. Under the NPC heading, one FAQ reiterates longstanding policy that NPCs are not covered entities for purposes of HIPAA and do not need Business Associate Agreements with VA in order to be provided with subject information if the study subject has authorized disclosure to the NPC in the informed consent and HIPAA authorization.  NPCs should verify that the proper subject authorizations are being given in these documents for clinical studies administered by the NPC.  (See discussion http://www.navref.org/newsletter/2003/update_082703.htm#4.%20NPCs%20and%20HIPAA)  As the FAQ points out, NPCs also should verify that their vendors and contractors who may access subject information held by NPCs are familiar with and will abide by VA privacy and security requirements.

Based on emails and calls to the NAVREF office, NPCs are to be commended for working closely with VA personnel to ensure compliance with VA data security requirements.  Many are also reviewing and improving as needed their own internal procedures for protecting NPC data, employee records and such subject information as they may receive.  Ensuring data security has added a significant new burden on NPC staff, but it clearly is time and effort well-spent.

Quick Tip – Review your NPC’s computer service contract to ensure that it requires the vendor to return or confirm destruction of any malfunctioning hard drives.  If the contract doesn’t provide for return or destruction, check with your vendor and see if you can upgrade to a contract that does.  One NPC spent an anxious day after realizing that their maintenance contract allowed the vendor to keep a broken drive, but all was well after the vendor confirmed its destruction.

• Supplemental R&D Funding – The FY 2007 war supplemental funding legislation currently stalled in Congress contains an allocation for VA research on traumatic brain injury and other injuries suffered by troops engaged in the Iraq and Afghanistan wars.  The House and Senate have provided differing amounts, but the final result for VA R&D may be as much as $30 million over and above the $413 million appropriated for FY 2007. However, the president has threatened to veto the war supplemental bill as it is currently proposed and this funding may be among the items dropped in order to make the bill acceptable to the president.

A VA fiscal officer recently brought to NAVREF’s attention VA employees’ apparent misunderstanding regarding use of government travel charge cards for trips reimbursed by NPCs.  While this is not strictly an NPC issue, our assistance in educating VA employees about proper use of travel cards has been requested.  It appears that expenses related to NPC-reimbursed travel are showing up on government travel cards and this is prohibited unless the traveler is on official travel.

VA employees traveling on authorized absence without a corresponding official travel authorization or travel orders may not charge their expenses on their government travel charge cards.  This also means that for such travel, VA employees may not use a government travel management center (TMC) to make their travel arrangements and may not access government travel contracted airfares.

Only charges related to official travel (also called “official authorized government travel” or “authorized travel”) may be put on government travel cards.  Government contracted airfares may be used only for official travel (not for travel performed on authorized absence without official travel orders).  All official travel expenses must be charged on a government travel card, not on the traveler’s personal credit card.

For VA policy regarding “Use of Government Travel Charge Card” see: VA Handbook 0631.1.  VA employees having questions should consult their local VA travel personnel.

A recently released IRS report concluded that “significant reporting issues exist” in regard to reporting and justifying executive compensation.  Over 30% of the nonprofits reviewed ended up having to amend their IRS Form 990.  Examinations of only 25 organizations and involving 40 people resulted in recommended excise tax assessments of more than $21 million so you can be sure that the IRS will maintain a keen interest in this area.

Additionally, recent disclosures about compensation and benefits paid to the secretary of the Smithsonian Institution are prompting congressional calls for more oversight and scrutiny of nonprofits.  The Smithsonian situation has been of particular interest because it, like the NPCs, is a congressionally authorized nonprofit subject to federal oversight, regulation and conflicts of interest statutes.  For weeks, the Washington notables who serve on the board have been embarrassed by detailed newspaper disclosures of their oversight failures.

Guidestar (http://www.guidestar.org/) has compiled an excellent resource for information about how to comply with IRS executive compensation requirements and avoid penalties and tax assessments.  See http://www.guidestar.org/DisplayArticle.do?articleId=1111#1#1 

NAVREF’s experience is that many NPC executive directors are underpaid for the NPC work in comparison to their local nonprofit peers.  However, for those NPCs with part-time executive directors, boards should calculate the annual equivalent of a part-time salary.  All boards must perform a salary comparability analysis to ensure that executive director compensation – full time or part time - meets the IRS tests for reasonableness.  The IRS advises nonprofits to:

·         Set compensation in advance using appropriate comparability data.

·         Make sure that no one involved in setting salaries has a conflict of interest.

·         Document all decisions on compensation.

·         Avoid penalties by reporting all economic benefits to officers, directors, and key employees on Form 990.

The IRS guidance to boards is to “collect comparable salaries for like services, in like enterprises, in like circumstances.”  Please take a few moments to review the Guidestar information at http://www.guidestar.org/DisplayArticle.do?articleId=1111#1 and check out the linked resources.

NAVREF is exploring ways to provide NPCs with a readily available resource for comparability data.  We have identified some possibilities, but nothing firm at this writing.  In the meantime, NPCs can use Guidestar to look up executive compensation for similar organizations in their region (See Part V of IRS Form 990).  Online services such as PayScale.com and Salary.com may be sufficient for some NPCs’ needs.  Local associations of nonprofits, state labor boards and Chambers of Commerce also generally collect and make available salary information.  An NPC’s accountant and auditor may be additional resources for data or may suggest local services that perform salary analyses.  For some NPCs, it may be possible to identify a VA position with comparable levels of responsibility and to use the appropriate geographically adjusted pay grade as the basis for NPC pay.

Joint VA/NPC employees:  During the past year it has become apparent that some NPCs continue to misinterpret guidance regarding joint VA/NPC employee situations.  Labor laws require pay for joint employees at time and a half of VA pay only in very narrow circumstances (see http://www.navref.org/bestpractices/hr_compliance_joint.htm).  These circumstances are not applicable to executive directors who by the nature of their responsibilities are exempt from overtime pay regulations.  Executive director compensation – for joint or single employment situations - must be based on local comparables as described above.  Applying a time and a half rate may result in excessive pay that is not supported by local comparables and may result in penalties to both the board and the executive director.

The VA IG recently faulted an NPC because it had not fully documented VA-mandated training for NPC employees working on VA without compensation (WOC) appointments.  NPC executive directors should be aware that VA WOCs must undergo much of the same training as VA-salaried employees. NPCs should retain documentation of compliance in NPC files.  Note:  Training is separate from credentialing which is administered by the facility’s credentialing office.

Some training is job specific and mandated by national VA policy while other topics are more general and may be required under VISN or facility policy.  Some courses require an annual update while others need to be taken just once. Resources for determining applicable requirements include:

• The WOC’s VA supervisor
• Human Resources Office
• Research Service Office
• VA research policies (http://www.research.va.gov/resources/policies/default.cfm)
• VISN Office personnel
• Facility Employee Education Service (EES)

With the assistance of Lynne Moffitt, executive director of the Salem Research Institute, NAVREF has compiled a list of typical training requirements.  Most courses are readily available at the facility or consist of modules on the Internet or on the VA intranet.  Consult local VA personnel for access. Note:  This is not intended to be a comprehensive list and not all training may be required by all facilities.  Suggestions for additions to the list are welcome (send to amurakami@navref.org).

• Age Specific Competencies for Older Adults
• Back Safety
• Biosafety [http://www.research.va.gov/programs/biosafety/default.cfm#training]
• Blood Borne Pathogens, and Tuberculosis
• Collaborative IRB Training Initiatives (CITI) – incorporates “Good Clinical Practice and Human Subjects Protection” and updates
• Compliance Business & Integrity
• Cultural Awareness
• Cyber, Data and Information Security
• Research Data Security and Privacy
• Elder Abuse
• Emergency Preparedness Management Program
• Ethics (http://vaww.gc.va.gov/Training/Ethics/)
• Fire and Life Safety
• Infection Control
• JCAHO National Patient Safety Goals
• Managing Hazardous Materials
• Patient Safety Improvement Program
• Recognizing Signs of Abuse
• Safety
• Sexual Harassment
• Telephone Courtesy and Customer Service
• The Constitution of the United States
• VHA Privacy Policy Training
• Violence in the Workplace.

In February, VHA implemented a policy requiring medical center directors to certify their responsibilities related to oversight of research conducted at their facility and issued a checklist to be used for this purpose.  The checklist included two NPC-related items that caused some confusion.  Please let your director know that the Office of Research Oversight subsequently removed both from the checklist so your director now has two fewer items to worry about.

• Facility Director Certification Checklist - 03/23/07