January 15, 2008 Message from Chairperson to Board regarding End of Federal Monitorship
We have reached another milestone. The remedial progress made by UMDNJ has enabled the United States Attorney and the federal Monitor to end the federal monitorship as of December 31, 2007 and to return full responsibility for governance of this Institution to the Board of Trustees. On the occasion of this positive development, I would like to make some brief remarks.
First, I thank you all for your hard work and dedication, both at the Board and Committee levels. I also thank our talented and dedicated faculty, staff and administrative leadership for continuing to serve so faithfully and effectively during the period of travail and to maintain the excellence which characterizes UMDNJ. You, the members of the Board, and the greater UMDNJ family have made this possible. I also wish to thank the United States Attorney, the Monitor and his staff, and the Monitor's investigators -- Sobel and Company -- for their assistance in rehabilitating UMDNJ and in returning full governance to this Board. Working in tandem with the Board and staff, the Monitor's advice and services were of extraordinary value in achieving this goal.
These accomplishments notwithstanding, our work is far from done. We obviously must maintain the reforms and benefits which have been achieved. But we must also address key academic, financial and other matters that, due to the need to prioritize tasks over the past 2 years, could not be given full attention. Together with Dr. Owen and his staff, the Board shall now formulate a new prioritized agenda for action.
Initially, I wish to correct an inaccuracy in recent news articles and editorial comment about the Monitor's Report and the supervision of investigations at UMDNJ. These media accounts, mostly announcing the end of the monitorship, claimed that in his final Report the Monitor had questioned UMDNJ's capacity to conduct internal investigations. This is not factually accurate. There is nothing in the Monitor's Report to this effect. Indeed, the Monitor's Report is expressly to the contrary. The Monitor said that investigations have been well provided for by UMDNJ until a new chief Ethics and Compliance Officer is found and hired. The Monitor said:
"UMDNJ has undertaken steps to rectify these concerns [about compliance and conducting investigations]. They have put an experienced investigator in place to oversee the Compliance Office's investigation team. James Rowan, a current UMDNJ employee, who was integral in assisting the Monitor design the Compliance Office in 2006, and who has extensive experience in investigative matters, is now supervising Compliance investigations. We believe that this supervision along with Board oversight of the investigative process will provide sufficient resources and expertise to address any shortcomings until a new Chief Ethics and Compliance Officer is hired."
It is noteworthy to add that we have hired the Monitor's forensic investigative and accounting staff -- Sobel & Company -- to stay on and to continue their investigative work with us. This means that pending investigations of matters turned over to us by the Monitor shall proceed seamlessly without missing a beat.
The Monitor made positive statements about UMDNJ in his final Report. I shall not take your time to note them all. But here is a representative sampling:
"It is the conclusion of both the Monitor and the United States Attorney, in consultation with the UMDNJ Board of Trustees that UMDNJ is not an institution that requires continued federal oversight by a Monitor." (p. 1)
"We are gratified to report that UMDNJ is a much-changed institution. The changes at UMDNJ -- though still in progress in many respects -- are noteworthy. From the top down, UMDNJ has undergone major personnel, policy, and cultural changes." (p. 1)
"The Board of Trustees -- numbering six at the inception of the Monitorship -- is now a robust 18 members strong. The membership includes a mix of experienced leaders from educational, medical, business, legal, and financial disciplines. The Governor, Speaker of the General Assembly, and the Senate President have taken care to appoint strong members to the Board. The historical use of the UMDNJ Board as a prominent political patronage position has subsided. The Board makes use of its members' expertise and oversees operations with a new and involving Committee structure.
The administrative leadership has undergone a significant overhaul as well. The new President of UMDNJ is a strong, determined leader committed to continue the changes that have begun in the past two years." (p. 2)
"We will reiterate, one last time, something that we have stated in previous reports - it should be clear to the thousands of hard working employees of UMDNJ, to the thousands of dedicated health professionals who serve our most vulnerable populations, and to the hundreds of students of UMDNJ, that they are working and learning in an exceptional institution. Our findings over the past two years speak to the moral, ethical, and leadership short-comings of a very few at UMDNJ. Unfortunately, those about whom we were forced to report due to various lapses in judgment often were in decision-making positions.
While attention was appropriately paid to those few individuals who exhibited unethical and even fraudulent behavior, our continuous interaction with the larger administration and staff of UMDNJ leads us to conclude that the institution as a whole is genuinely committee to a principled course and are deserving of the public's trust and financial support. For every self-serving individual that UMDNJ has had the misfortune to employ, there are hundreds of selfless professionals, physicians, nurses, and professors that UMDNJ should consider itself fortunate to employ. The institution has been making strides in restoring itself to the standing which the New Jersey community expects; and we believe it has reemerged from its past tumult better for having been excised of those who have done it harm." (p. 3)
I hasten to emphasize again that we must take the laurels in stride and continue on. There is no room for complacency. There is more still to be accomplished. Generally, in addition to maintaining and implementing reforms to date, we must continue to create and impose requisite financial controls, hire a full complement of staff for investigative and audit work and, concurrently, maintain the academic excellence of the Institution. Dr. Owen will tell you about some of the initiatives which we must pursue. But let me name just a few:
(1) With respect to the compliance function, we have initiated a nationwide search for a new Chief Ethics and Compliance Officer and have engaged a nationally recognized search firm, Korn & Ferry (which undertook the search which produced our exceptionally talented new President, Dr. William Owen), to assist us. We must, and shall, expedite the process.
There is also currently underway a review and evaluation of our compliance structure by a national compliance expert whom we engaged last month. We expect to receive his report very soon. We shall then consider his recommendations.
(2) We have initiated nationwide searches to fill vacancies in the office of Dean at some of our institutions. We shall continue to expedite the process.
(3) We must continually act to assure the UMDNJ family that proper and ethical conduct is the norm, that improper or illegal conduct will not be tolerated, and that we will not only investigate and pursue all allegations of irregularity but will also protect sources of information, all as set forth in the policy we adopted last December. In this regard, let me reiterate the theme sounded by Mr. Terracciano some months ago and repeated in my June 15, 2007 Report to legislators, that the level and intensity of oversight and review will inevitably identify past problems which need to be -- and will be -- remedially addressed and will also identify new matters which demand attention. Experience has taught us that when irregularities are detected, remedies are put in place and then both the problem and the remedial action are publicly announced, publicity tends to be negative with a focus on the wrong rather than upon the conscientious effort which detected and corrected it. This is unfortunate to put it mildly. But if this is the price of reform and success, we shall pay it. Nothing will deter us from doing the right thing, from probing, from discharging our responsibilities.
The Board's commitment to reform is rooted in a recognition that the Board and the executive administration must continue to probe, must continue to identify all past and present problems, must continually scan the environment for potential risks, and must move systematically to address not only individual instances of wrongdoing but also the broader organizational, administrative, and cultural characteristics that permitted them to arise in the first place. And, importantly, all of this must be achieved while supporting the mechanics of providing high-quality educational, clinical, research, and service programs.
Finally, I would like to address recommendations made by the Monitor in his final Report and to advise you of what action has been or will be taken with respect to them:
Office of Ethics and Compliance: The Monitor recommended prompt action, by way of a nationwide search to find a new Chief as expeditiously as possible. The search is underway and we shall press for a prompt resolution.
Subcommittee of Audit Committee: The Monitor recommended that a subset of the Audit Committee be created and "charged with oversight of the investigative side of the Compliance Office," adding that the subcommittee would then be able to better keep the Board apprised of ongoing investigations. This is a fine idea. With your concurrence, we shall create and staff such a subcommittee.
Compliance Office Personnel: The Monitor recommended that we "commit the resources necessary to hire experienced investigators to conduct thorough investigations of issues that come to the Compliance Office." This initiative is underway under Mr. Rowan's guidance. And, significantly, as stated at the outset, we have engaged Sobel & Company, the Monitor's forensic accountants and investigators, to continue their work for us and the firm shall stay in place until the necessary investigative staffing is completed.
Trusteeship Committee: The Monitor recommended that we form a Trusteeship Committee "to identify persons of suitable stature . . ." for future appointment to the Board and to pass those recommendations on to the appointing authorities. This too is a fine idea. With your concurrence, a Trusteeship Committee will be promptly constituted. The Committee will be asked to compile a "bank" of talented, potential Trustees whose names and qualifications can be shared with appointing authorities as appropriate from time to time and assuredly when vacancies occur.
Document Retention Policy: The Monitor has suggested that a document retention policy be put in place.
Soon after I joined the Board I asked our then temporary General Counsel to frame such a policy for Board consideration. We were advised by him at a Board meeting that there was a uniform Retention Policy promulgated by the State of New Jersey which we were obliged to follow. He added that this constituted our policy and that it would be superfluous to draft another. However, in view of the Monitor's comment, we should take another look. Fortuitously, I am advised that Mr. Aron, our new and permanent General Counsel, has already started a further review of this subject and will advise us if in his view further action concerning Retention Policy on the Board's part is necessary or desirable and, if so, to prepare whatever he deems appropriate for Board consideration.
Thank you again for your service and dedication in the past and for your commitment to the future wellbeing of UMDNJ.
Robert J. Del Tufo, Esq.
Chair, Board of Trustees