Monday, July 19, 2010

Reminder to Display Hotline Poster

We have written in the past about the requirements for contractors to have written codes of business ethics and conduct, to maintain an ongoing ethics awareness and compliance program and to implement related internal control systems. Generally, these requirements apply to contracts over $5 million with a performance period longer than 4 months (FAR 52.203-13). For contractors under this threshold, there is a requirement to display hotline posters (FAR 52.203-14). Hotline posters provide a confidential '800' number for company employees to report fraud, waste, and abuse. It's probably a good idea for contractors above the threshold to display the poster as well. The hotline poster could be part of the ongoing ethics awareness and compliance program.

The contracting officer is required to insert the source for the hotline poster in the contract clause. Most agencies have their own poster. The DoD hotline poster can be ordered or downloaded here. If the "source" is left blank in your contract(s), you should contact your contracting officer for specific sources. The contract clause also requires that contractors display an electronic version of the hotline poster on the company website if one is maintained for providing information to employees.
Auditors will not schedule a specific audit to test for compliance. But, as part of another review (e.g. labor floorcheck, proposal evaluation, incurred cost audit, voucher review) will check for compliance with this contract requirement. Failure to comply could factor into the auditors' overall risk assessment and increase the level of audit activity.

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