Comprehensive Report: Compliance Management System Analysis

This report provides a detailed analysis of a compliance management system, essential for organizational operations and risk management. It breaks down compliance requirements into internal, external, and industry categories, outlining their significance and impact on various areas such as customer engagement, financial management, employee conduct, and quality assurance. The report identifies potential risks associated with non-compliance, including financial malpractice, lawsuits, and employee demotivation, alongside the penalties involved. It then explores different compliance systems, including audit review, risk management, and quality assurance systems, comparing their cost, effectiveness, efficiency, and feasibility. Furthermore, the report details a research plan, outlining the methodology, timeline, and budget for studying the compliance management system. Finally, it discusses implementation planning, including management information system requirements, key components of a good compliance system, and the importance of management oversight, complaint management, independent auditing, and comprehensive compliance programs to ensure adherence to legal, financial, human resource, and infrastructural standards. The report emphasizes the importance of a synergistic approach to ensure comprehensive compliance.

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Task 1: Report on Compliance Management System
Table of Contents
1. Introduction..............................................................................................................................4
2. Compliance Requirements:......................................................................................................4
a) Internal compliance requirements,........................................................................................4
b) External compliance requirements.......................................................................................5
c) Industry compliance requirements........................................................................................5
3. Compliance effects...................................................................................................................5
a) Areas affected.......................................................................................................................5
b) Risks.....................................................................................................................................6
c) Penalties................................................................................................................................6
d) Risk minimisation.................................................................................................................7
4. Compliance Systems:...............................................................................................................7
Comparison of the systems..........................................................................................................7
Research Plan...............................................................................................................................9
Report on the Reflection of the research process..........................................................................10

1. Introduction
Compliance to set standards is an important aspect in organisational operation and at times
regarded as a risk management strategy. Compliance is regarded as the process by which an
organisation uses to ensure adherence to both internal and external requirements, and standards
(Gunningham, 2017). These requirements may include policies, guidelines, codes and
regulations, legislation, just to mention a few.
Compliance management system on the other hand is a comprehensive integrated system made
up of processes, documents, and control mechanism meant to help the organisation adhere to the
set legal requirements (Mohd Rizal Palil, 2011).
2. Compliance Requirements:
Compliance requirements for the organisation are broken down into different categories
including internal, external and industrial compliance.
a) Internal compliance requirements,
Internal compliance requirements are normally put in place to confirm that the internal policies,
guidelines and control framework that a company has established, have been adhered to (Busse
& Doganer, 2018).. They are also meant to aid the company meet both external and industrial
compliance requirements (Mohd Rizal Palil, 2011).
In order to meet internal compliance requirements, the company is expected to do billing for all
the services offered to clients, the company should also have a proper coding system to help the
keep track of all property of the organisation and the patients who are treated by the healthcare
facility.
Clearly spelt out policies to provide a framework of how activities are to be carried out within
the organisation in strict compliance with the set laws
A proper code of practice and operating procedures should also be described to meet the internal
compliance requirements
Most importantly, there should be an internal compliance team, properly structured to ensure that
all internal compliance requirements have been achieved. This team is also expected to carry out

periodical reviews on the existing standards of compliance and report their findings to the top
management of the organisation for analysis.
b) External compliance requirements
External compliance is normally structured by bodies external to the organisation, mainly the
government through its laws
Some of the external compliance requirements for the organisation include,
Adherence to set labour laws and standards put in place governing employer employee relations
within the organisation.
Licensing of the business through the local governments and all other recognised bodies
established for monitoring and regulating the sector.
Declaring and filling of tax returns in the stipulated period and as per the established guidelines
and filling of any other relevant report required by the government
c) Industry compliance requirements
These are industry wide compliance requirements which govern the sector. They include;
Clearly spelt out standards of quality set in place governing, the handling and care of patients;
from admission to when they are discharged.
3. Compliance effects
a) Areas affected
The compliance regulations were seen to have an impact in various domains of the organisation.
Customer engagement: the internal compliance regulations had a major impact on how clients
coming in and out of the organisation receive their services.

Financial Department through proper documentation of financial transactions, a streamlined
financial management system was seen with minimal risk of fraud and malpractice. This was
made possible by both internal and external regulatory compliance systems put in place
Employee conduct and welfare: the compliance requirements more so internal compliance,
were also aimed at streamlining the conduct of employees when carrying out their tasks. The
external and industrial compliance assisted in maintaining employee welfare standards.
Quality assurance and management: Both the internal and external regulatory compliance
requirements was seen to dictate the quality assurance process further imposing high levels of
quality standards in the services offered.
b) Risks
The risks involved from non-compliance include the following:
Risk of financial malpractice, improprieties, and potential fraud
Risk of law suits emanating from employee complains
Health risks and hazard emanating from work place injuries
Risk of employee demotivation
Risk of customer dissatisfaction, complaints and potential boycott of the hospital services
Risk of imposed government penalties
c) Penalties
The penalties for non compliance that were established include,
Fines from lawsuits
Damages awarded for harm done
Withdrawal of operating licences

d) Risk minimisation
From the established risks, it was apparent that the compliance requirements set were an
important tool in risk minimisation. They provided a framework where financial, human resource
and operational risks were reduced to a bare minimum.
4. Compliance Systems:
Audit review system: an audit review system is meant at looking at the existing system,
identifying the available loopholes and providing viable solutions. Audit review system is
normally put in place to ensure adherence to compliance requirements relating to financial
matters (Babayanju, 2017). The audit review system must be conversant with the set financial
and tax laws coupled with the financial policies set by the organisation
Risk management system: A risk management system is aimed at identifying and dealing with
potential organisational risks. The management system should take a comprehensive approach at
identifying the various risks and providing a system of dealing with those risks and in turn
ensuring compliance to operational requirement (Valsamakis, Vivian & Du Toit, 2010).
Quality assurance system: quality assurance system is aimed at meeting the quality compliance
requirement for an organisation. (Kulkarni & Vemuri, 2015). The system is supposed to take
into consideration the standards set by the organisation, and help all relevant quarters adhere to
the said standards providing checks and balance to ensure they do.
Comparison of the systems
Cost:
From the cost perspective, all the three identified systems will require very little resources unless
an external expert is needed to implement e.g. the audit review system which may need an
external certified public accountant

Effectiveness
All the three systems will be very effective at ensuring internal, external and industrial
compliance. Other than an audit review system, the other two are supposed to cut across all
functionalities in the organisation
Efficiency
In terms of efficiency all three will be efficient in their own way in ensuring various forms of
compliance since all of them are playing divergent roles. The efficiency will however be dictated
by the implementation plan
Feasibility
The three systems are feasible to be implemented due to the fact that they don’t require a
substantial amount of capital to be put in place. Other than the audit review system, the other two
can have its members coopted from within the organisation.
Match to organisational culture
The three systems will match the organisational culture of strict adherence to guidelines and
policies. They are also not expected to cause a major shift in the normal operations thereby not
having a very major shift to the existing organisational culture.
Recommended system
Since all the three systems don’t necessarily perform the same task, a system that uses the three
in a synergistic manner will be preferred to ensure compliance

Research Plan
Decembe
r January Februar
y March April May
Development of a research
plan and resource
identification
Selection of research
methods
Development of survey
tools to capture
organisational data.
Collect organisational data
on compliance performance
Analysis of data
Compilation of the final
document
Presentation of findings
Research Budget
Items Cost $
Preparation of the research documents ( paper work
+ printing ) 20
Transportation costs 150
Consultation services 200
Miscellaneous expenses 30
Totals 400

Report on the Reflection of the research process
The research took a period of 5 months which encompassed several activities. This report will
briefly outline the key research areas and activities undertaken as part of the research process;
The type of research undertaken was descriptive research which was aimed at establishing the
compliance management system in the identified organisation. Descriptive research was chosen
as the preferred research design for the act that it was able to describe the current situation in the
organisation Kothari, (2011),
The development of the research plan was done after having a clear picture of the research
dynamics and took into consideration the research resources at hand
The development of survey tools to collect required data to select compliance was done with the
help of other experienced consultants in the field in order to meet the validity and reliability test.
Two instruments were selected for this research, namely an interview schedule and a brief
questionnaire.
After collection of the research data, analysis ensued where both primary and secondary data
were analysed. Qualitative data was analysed using qualitative data analysis with the help of
descriptive statistics while quantitative data was majorly analysed using descriptive statistics.

Task 2: Implementation Planning
COMPLIANCE MANAGEMENT SYSTEM
Management information system requirements
There are several requirements that the management information system to be built needs to
consider;
Legal and legislative requirement: to ensure that the system has met the necessary legal
compliance, the MIS system should be founded on the premise of a legality and strict compliance
to existing laws
Financial Requirement: The Management information system should also be cost effective.
Implementation of a management information system is normally expensive and the organisation
needs to analyse its resources to make sure that the resources it has are able to meet the costs
required or development. The cost for establishing the MIS system must also make sense in as
far as cost benefit analysis is concerned.
Human Resource Requirement: the people to run the MIS should be identified and their tasks
clearly spelt out for them. Some of the tasks they are expected to accomplish include, collecting
and recording, processing and analysing, and if need be disseminating information. It is therefore
important for the right choice of human resource with sufficient skills to be given a priority when
developing an MIS system. As part of the human resource requirement, training programs need
to also be considered to bring the identified personnel up to speed on how to properly run the
MIS system.
Infrastructure Requirement: The necessary infrastructure hosting the MIS system needs to be
allocated. The location where the MIS is going to be established needs to be identified taking due
regard to the safety and precautionary measures necessary to allow the system to function
optimally with minimal risks involved.
Information: the various sources of data collection are also an important prerequisite to a MIS
system. A collection pool of data resource needs to be established and evaluated; where
important data is considered and the irrelevant data discarded

Material Requirement: The subsequent materials needed to run the MIS should also be
included as part of the requirements to consider. This includes; stationery, guidebooks, policies
and regulations manual among other things. Still on material requirement, there is also the
computer hardware which is the basic requirement to build an MIS system
Components of the compliance management system
There are several key components that a good compliance system should have;
Management oversight: a good compliance system is one that has the support and is being
overseen by top management. The management of the organisation will play an important role in
ensuring that strict compliance to the various organisational requirements are adhered to, they are
also to be informed and at times be required to take drastic decisions on high priority issues.
Complaint management system: Complaint management system is like the feedback
mechanism of a good compliance management system. Complaints lodged by various groups
due to none compliance needs to have a channel where they can be addressed.
Independent compliance auditing system: an independent, unbiased audit system that aims to
review the compliance management system needs to also be put in place. The frequency of
review and method of reporting for the audit team needs to be properly defined
Compliance program: a program that entails training, and formulation of policies and
procedures, monitoring, control and evaluation, is an important component that needs to be
considered in a well established compliance management system.
Some of the documents required to be developed include: a manual of policies and procedures,
compliance agreements and contracts, financial records just to mention a few.
PERSONNEL
For the proposed compliance management system, the personnel requirements include:
Independence: One of the most important requirements for personal in the proposed CMS is
independence. The individual to be considered should display a high level of independence, and
lack of biasness, so as not to have clouded judgments when duty demands them to do otherwise.

Knowledge of auditing procedures: the personnel should be able to carry out basic auditing
procedures in order for them to monitor, review and report on the aspects of the whole
compliance system
Knowledge of both internal and external compliance requirements: the personnel to be
considered should also be conversant of the internal and external compliance requirements for
them to be able to enforce the same.
Keen and observant: the personnel to be selected should be keen and observant to spot potential
areas which may bring about noncompliance
The personnel should preferably be selected from different departments:
From the various selected personnel, there are three main responsibilities to be allocated;
-Enforcement of the set compliance requirements
-Monitoring of the compliance system and spotting areas which need to be improved
-Audit, review and reporting on the performance of the compliance management system
TRAINING
Training requirements
Skills to be gained: part of the training requirement needed to be considered is the skills to be
imparted to the trainees. The from the training program the employees are supposed to gain the
prerequisite skills needed for implementing the CMS system hence the need to analyse how the
skills training is to be conducted
Budget of the training: the training program needs to have sufficient budget allocated to it for it
to run smoothly
Timeline of the training: the timeline of the training program is also supposed to be clearly
defined with regards to how fast the organisation wants the whole CMS to be implemented

The type of training: the type of training to be conducted is also a requirement that one should
consider depending on what skills the trainees are supposed to gain.
Suitable training options for staff
There are several training options available to give the team selected for the implementation of
the CMS;
Technical training: technical training according to (Ivancevich & Konopaske, 2013) is the type
of training meant to provide or give employees a complete set of new technical skills. . .
Skills training this type of training can also be considered as a viable option. It is meant to
provide the selected members with the skills they require to carry out their tasks (Foot, Hook &
Jenkins, 2016)
Quality training quality training is also considered to be a viable option. Through quality
training, the selected members will get to obtain skills necessary for quality assurance and
management. This will allow them to properly carry out enforcement pertaining to compliance of
quality requirements.
Safety training: this type of training involves imparting skills useful in ensuring ideal workplace
safety is met. This type of training can be useful in enforcing work safety compliance
Professional training: upgrading existing skill set can be done through professional training
(Clarke, 2012). This type of training can bring the selected members up to speed on the policies,
legal requirements and other like systems encompassed in the CMS
PROCESSES
Risk management system is a system that is aimed at identifying, monitoring and dealing with
potential risks which may affect compliance to internal or external requirements.
Strategy for developing a compliance management culture
1. Leading by example: the culture of compliance has to be led by the top organisational leadership

2. Policies and Guidelines: Identify and develop policies, guidelines and measures of standard that
resonate with external compliance requirements.
3. Alignment of compliance to the mission and vision of the organisation and in such a manner that
provides a strategic value to the organisations processes.
4. Alignment of compliance requirements with the risk management strategic order to have a
proactive approach to compliance
5. Invest in training and systems upgrade. Training should be done and proper technology put in place
to ensure the necessary capacity for achieving compliance is in existence.
Processes and procedures for identifying and managing compliance breaches,
-Initial identification of the breach and notification to the relevant persons supposed to contain
the breach
-Actual containment of the Breach using the set rules and procedures
-An investigative assessment of what exactly caused the breach is done and a proper corrective
mechanism put in place
- Documentation and recording of all breach control activities done to provide reference in case
of an occurrence of a similar issue.
Processes and procedures for meeting compliance reporting requirements
- Establishing the rules and guidelines for compliance reporting.
- Planning of periodical system reviews for carrying out analysis of the existing compliance system
- Actual system review and analysing the existing compliance system
- Recording and reporting on the findings of the review.
- Implementation of the recommendations from the report
Processes and procedures for internal and external liaison
- Determining the key partners stakeholders to cooperate with in the process and clearly highlight
the compliance issues required
- Establishing common objectives and goals of the liaison
- Develop a roadmap on all the compliance activities which require liaison
- Identify and allocate the necessary resources needed to implement the formulated road map
- Implementing the roadmap

- Monitor and evaluate all the liaison activities properly documenting the outcomes.
Performance indicators to be measured by the system
i. individual compliance/non-compliance
- individual records indicating frequency of compliance breach
ii. training numbers
- training budget; measuring set training budget against the actual budget used
- increase in compliance due to increase in trained personnel
iii. numbers of complaints
- number errors or mistakes in service delivery
- number of products returned due to none compliance
- number of visitation by external compliance enforcement bodies
iv. numbers of breaches
- frequency of breach control activities
v. Ratio of payroll errors/breaches to number of transactions.
- Number of complaints lodged by employees
- Frequency of errors/ breaches highlighted in the Audit reports

ADMINISTRATION
Budget for the implementation of the compliance management system
Activity Cost $
Development of Compliance Management
system 3000
Selection and training of compliance
management team 5000
Implementing the CMS 2000
Monitoring, auditing and reviewing of the
CMS 1500
Maintenance of the CMS 2000
Total 13,500
Gantt chart showing Action schedule
May June July Aug Sept Oct
Development of the CMS
Selection of staff
Training programs for the selected staff
Testing of the CMS
Improvement and implementation of the
compliance system
Audit and review of the CMS
Maintenance of the CMS

Task 3: Establish, monitor and review plan
EXECUTIVE SUMMARY
This report is aimed at detailing the results of the monitoring and review processes carried out on
the implemented compliance management system. The from the monitoring and review process,
it was established that the system was able to help the organization realize internal, external and
industrial compliance requirements. The compliance team put in place were able to receive
proper training which enabled them to implement the system seamlessly with very little backlash
from the employees and the customers alike. It can however be noted that the system needs to e
given more time to function in order for the whole organization to embrace it fully and its tenets
imprinted as part of the organizational culture.
ESTABLISHMENT OF SYSTEM
The system was implemented in a procedural manner and the steps taken to implement it are as
described below.
The system was first developed taking into consideration the organizations’ existing policies and
the legal framework in place.
A selection process of identifying the operational personnel ensued where personnel from
various organizational departments were chosen with specific individual qualities being looked
for during the selection process.
Training of the selected personnel followed suit using different training approaches depending on
the employee skills at the time of selection. The training was meant to build the capacity of the
selected personnel, for them to be able to implement the system in the manner prescribed.
Initial testing of the system ensued where it was identified that the compliance management
system integrated well with other existing systems. A few areas were identified for improvement
before final enrollment of the system was done.

MONITORING METHODOLOGY
From the implementation of the system, processes of monitoring and reviewing how the system
worked was put in place. The main purpose was to establish potential areas or improvement and
whether the system worked efficiently to ensure maximum compliance.
Some of the approaches used to monitor the system included observation of key activities in
relation to adherence of compliance. Observation of work place documents and related evidential
documents to ascertain the compliance of the organizations employees was also done
Questioning of various personnel from within the organization on, how they feel about the
compliance system, and if they have seen a substantial change in organizational performance
after the implementation of the compliance mechanism, was also a technique used to monitor
compliance. .
There was also review of assessment reports written by the compliance management team. The
reports clearly indicated the various compliance requirements and instances of breach.
Observation of external stakeholders and how their response to the implementation of a
compliance system was also a method used to monitor how effective the system was.
RESULTS AND ANALYSIS
From the monitoring process, it was ascertained that the compliance mechanism was working as
planned. The positive feedback received from both internal employees and external stakeholders
was indication enough that the system was efficient in ensuring compliance requirements are
met.
The reporting system was also functioning as established showing that the CMS had started
integrating in a synergistic manner with other organizational functionalities.
It is however to be noted that more time needs to be given for the whole CMS system to fully
integrate with other organizational systems. It was also noted that some employees were still
reluctant to embrace the system which was a potential impediment to the implementation of the
system.

CONCLUSION
A compliance management system is an important system in ensuring that an organization
strictly adheres to the set standards and regulations both internal and external. Management
oversight of the system needs to be enhanced so as to ensure the success of the CMS
implementation. It was identified that there was laxity by some of the employees to embrace the
system; this issue is left to the management to communicate the advantages of having a proper
compliance system in place. Another area which can be improved is the quality management
strategy which should be enhanced to meet the ISO standards compliance requirements

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