The Catholic University of America

Summary of Federal Laws

Miscellaneous Laws

The Sarbanes Oxley Act of 2002 (SOX)

Public Law 107-204

This is a law designed to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws. It applies to publicly traded companies, and, with a few exceptions noted below, does not apply to institutions of higher education. University governing boards deal with similar issues in corporate activities, and thus universities are looking to this law as a framework for evaluating financial risks. 

The two sections of SOX that apply to non-profit entities are the following:

No person may

(1) knowingly, with the intent to retaliate, take any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense, see Sarbanes-Oxley Act § 1107 (codified at 18 U.S.C.A. § 1513(e)), or

(2) knowingly alter, destroy, mutilate, conceal, cover up, falsify or make a false entry in any record, document, or tangible object with the intent to obstruct or influence any U.S. governmental investigation or administrative procedure before any U.S. department or agency or any contemplated or filed bankruptcy proceeding, see id. § 802 (codified at 18 U.S.C.A. § 1519).

Note that SOX contains criminal penalties, and thus issues such as retaliation which might have been a civil tort matter may now become a criminal matter. Adoption of records retention programs and training on same will assist in ensuring compliance with Section 1519.

Related Issues: See Proposed FAR Rule on Contractor Code of Ethics

Resources

AGB Board of Directors' Statement on the Fiduciary Duties of Governing Board Members, issued August 1, 2015.Association of Governing Boards of Universities and Colleges Statement on Board Responsibility for Institutional Governance: Approved by AGB Board of Directors on January 22, 2010. The principles set forth are intended to guide boards in the governance of colleges, universities, and systems, inform them of their roles and responsibilities, and clarify their relationships with presidents, administration, faculty, and others involved in the governance process.

Compliance Guide for 501(c)(3) Public Charities, IRS Publication 4221. Includes responsibilities of a 501(c)(3) as well as an overview of activities that might jeopardize the tax exempt status of the organization.

DOJ Field Guidance on Sarbanes Oxley

2005 JCUL Article by Carl Oxholm III:Sarbanes Oxley in Higher Education: Bringing Corporate America's Best Practices to Academia 

***

updated 12-17-18 mlo