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A Compliance Officer Ethical Dilemma Research Paper

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Updated: Jul 31st, 2020

I had an encounter with a compliance officer working for a Local Education Agency or school district. His job requirement compels him to meet compliance requirements in a School-Based Medi-Cal Program of SMAA in accordance to the standards and policies established by the Department of Health Care Services and Centers for Medicare and Medicaid Service or CMS. The said compliance officer complained of his inability to work at the highest level because he is struggling with an ethic’s related challenge.

He understands the need to follow the rules and to enforce the law of the land, but doing so requires sacrificing personal relationships and creating a tenuous working relationships that causes a high rate of turnover for the members of the compliance teams. He needed an answer that not only satisfies the basic requirements promulgated under the SMAA’s code of conduct but also the application of an ethical framework based on Christian principles.

After conversing with the compliance officer for less than one hour, I was able to glean insights regarding the work environment shaped by the SMAA, and policies crafted by the Department of Health Care Services and the CMS. It was made clear that the Federal government created a mechanism for helping certain school districts with medicare or medicaid related issues. One of the govenment-funded program is the SMAA that enables the LEA to reimburse expenditures permitted under the said framework. Due to the utilization of critical resources and the magnitude of the expenditures involved, it was necessary to develop a compliance unit that monitors the activities of the LEA and to figure out if the school district adhered to certain standards and policies.

According to the compliance officer that was interviewed for this project, the SMAA program anticipated the high cost or unnecessary expenditures that are going to affect the reimbursement process if the physicians and other health care workers are not mindful of the cost of the medical procedures or the medicines that they are going to prescribe to the students or the employees working in the said learning institution.

In order to prevent abuse, the employees and members of the medical staff supporting the healthcare requirements of the students, faculty, and staff were told verbally, through memos, and the issuance of a manual that they were not supposed to accept any forms of gifts or favors from the representatives or officers working directly for a pharmaceutical company.

The compliance officer interviewed for this ethics case resolution exercise perfectly understood his role. However, he is also mindful of the long-term consequences. He is aware of the potential backlash, the strained relationships with the people serving with him under the same work environment, and the high turnover rate due to the conflicts created by the need to enforce the rules regardless of the negative consequences created by the said action. This sentiment was echoed by Susan Lorde Martin (2015) when she wrote about the burden carried by compliance officers.

The Compliance Officer: Safeguards and Compliance Policies

It does not require a neurosurgeon to understand the wisdom of the said policy. The acceptance of gifts or favors from a medical representative or marketing agents of a pharmaceutical company creates an imbalance of “power relation” between the physician or health worker and the said agent. Thus, they are more likely to prescribe the drugs, medical paraphernalia or therapeutic service endorsed, manufactured or sold by the said company.

In the said interview, the compliance officer pointed out that they were trained to view these gifts and personal favors as something that is tantamount to a bribe. Thus, compliance officers were made to understand the gravity of the problem. The deliberate disregard for this policy potentially creates a financial deficit for the government and the school district, because the government made the commitment to reimburse at least half of the approved medical expense.

In an ideal situation, business leaders and compliance officers knew how to handle every work-related problem. However, in a real-life setting, it is not always possible to see the resolution to a certain issue based on established rules and universally accepted principles. As a result, ethical frameworks were created to help business leaders and enforcement officers develop a keen sense of awareness on how to apply ethical principles in ethical dilemmas that affect multiple stakeholders in varied ways.

From a philosophical standpoint, business leaders are made aware of popular ethical frameworks like John Stuart Mill’s Utilitarianism or Immanuel Kant’s Categorical Imperative. In these two frameworks, the focus is in doing the right thing no matter the consequence. Adherents of utilitarianism are in agreement to adhere to the rules and principles on the condition that the rules and policies are supposed to benefit the greatest number of people. Kant’s categorical imperative on the other hand does not distinguish the democratic value of the policy, as long as the leader applies rules and regulations that are in accordance to universally accepted principles of honesty, goodness, and fairness.

It does not require a philosopher like Kant and John Stuart Mill to realize that in certain situations, the blind acceptance or blind enforcement of rules and regulations are going to affect people in different ways. It is a good idea to use Christian principles that are going to temper or enhance ethical frameworks that are useful but did not consider the personal consequences of certain actions. In the well-known Bible story of a woman caught in an adulterous relationship, the religious leaders were correct to requires just punishment for the said infraction, however, an alternative solution was also available that does not require the use of capital punishment.

In another equally famous Bible story, a debtor was supposed to have been jailed for his failure to pay an extraordinary amount of financial obligation, however, an alternative solution was offered with the expectation that the forgiven debtor was supposed to pay it forward or help people with similar financial struggles.

It is a good idea to incorporate Christian principles to established ethical frameworks, because it teaches people to see the “big picture” and not just the need to obey the law of the land. Consider for instance the key Christian principles that are applicable to this case, and these are: justice, diligence, generosity, and trust. After considering these principles it is possible to see the compliance officer’s problems in a new light.

With regards to Christian justice, the Bible says that justice must prevail, because it is more acceptable to the Lord than sacrifice (Prov. 21:3 New Revised Standard Version). This is an example of compelling language with regards to the need to adhere to this critical principle. In other words, the compliance officer cannot ignore SMAA’s rules and regulations. With regards to the diligence principle, the Bible teaches the need for an uncommon pursuit for excellence (Mt. 25:14-15 New Revised Standard Version).

This principle strengthens the justice framework, because it encourages Christians to do the right thing no matter the consequences, echoing Kant’s categorical imperative (Wolf, 2013). However, the powerful directive mentioned earlier were tempered with the generosity principle. The generosity principle promulgates the idea that God lifts up the poor and the needy from the ash heap (Ps. 113:7 New Revised Standard Version). The honesty principle on the other hand, promulgates the importance in trusting the Lord (Prov. 3:5 New Revised Standard Version). However, if the Bible tells Christians to love God and people at the same time, it is not a stretch to recommend trusting people as a way to empower them.

In an article published under the International Journal of Economics and Management, Houng Chien Tan and Jo Ann Ho (2015) pointed out the need to trust workers in order to empower them. It is best to enhance this view with insights gleaned from an article claiming that compliance means prevention not just the need to follow rules (Neff & Gresham, 2016). It is also imperative to review the design of the implementation process and not just the need to administer justice (Benedek, 2012). It is also critically important to be mindful of the value of the human community within the LEA context (Guyette, 2014).

It is prudent to consider also the impact of trust and benevolence for long-term growth and sustainability (Friedman & Fischer, 2014). It is not wise to measure the compliance team’s success in the number of administrative cases filed without considering the high turnover rate of the members that comprise the compliance division. It is not practical to simply focus on the justice aspect of the compliance framework (Leong, Huang & Mak, 2013). For example, the high turnover rate of the members of the compliance team leads to higher operating cost. However, the more problematic consequence of this problem is the failure to train and retain highly-skilled operatives that help establish an organization that celebrates adherence to high standards and does not tolerate wrongdoing.

In light of the insights gleaned from the process of incorporating Christian principles into universally accepted ethical frameworks like Utilitarianism and Kant’s Categorical Imperative, it is best to focus on prevention and empowerment. In other words, the compliance officer and his team must never delineate themselves from the other employees (Piff, Feinberg, Dietze, Stancato & Keltner, 2015). They must work together as a team in order to prevent grave abuse of authority and misconduct.

In other words, the compliance process becomes a team effort. They are going to point out the wrong actions, habits, and lifestyle of the past era, however, they are going to move forward with a new attitude. As a result, the compliance team creates opportunities for growth and enhances it capability to monitor transactions and other activities covered by the SMAA-mandated protocols.


The conventional approach calls for the need to administer justice and to uphold high standards defined by diligence and the passionate pursuit for excellence. Biblical principles requires sacrifice in terms of following the laws of the land, and this means obedience without considering the consequences of the said actions. However, the application of equally important Christian principles defined by generosity and trust enlightens business leaders to see the long-term success of the organization.

The successful filing of administrative cases on those who accepted gifts and favors may satisfy the first two principles of justice and diligence, but the high turnover rate and the workplace conflict lead to breakdowns in communication and exacerbate the corrupt culture existing within the said school district. It is best to re-educate them and work with them as a team in order to empower the people to prevent fraud and improve the standards of the said organization.


Benedek, P. (2012). Compliance management – a new response to legal and business challenges. Acta Polytechnica Hungarica, 9(3), 135-148.

Friedman, H., & Fischer, D. (2014). Learning about leadership, trust, and benevolence from ethics of the fathers. Journal of Religion and Business Ethics, 3(1), 1-20.

Guyette, F. (2014). Faith, friendship, and justice: Elements for a Christian social ethic. The Journal of Friendship Studies, 2(1), 45-61.

Leung, F., Huang, J. & Mak, S. (2013). Protestant work ethic, confucian values, and work-related attitudes in Singapore. Journal of Career Assessment, 1(1), 1-13.

Martin, S. (2015). Compliance officers: More jobs, more responsibility, more liability. Notre Dame Journal of Law, Ethics, & Public Policy, 29(1), 170-188.

Neff, C., & Gresham, J. (2016). The difference between ethics and compliance – and why understanding the difference is critical to successful leaders. The Journal of Practical Business Ethics, 30(1), 1-5.

New revised standard version. (1989). New York, NY: Division of Christian Education of the National Council of Churches for Christ.

Piff, P., Feinberg, M., Dietze, P., Stancato, D. & Keltner, D. (2015). Awe, the small self, and prosocial behavior. Journal of Personality and Social Psychology, 108(6), 883-899.

Tan, H., & Ho, A.J. (2015). The influence of communication, empowerment, and trust on organizational ethical climates. International Journal of Economics and Management, 9(1), 23-44.

Wolf, R. (2013). Management relations in the work culture in Japan compared to that of the west. Innovative Journal of Business Management, 2(5), 116-122.

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