Working With the Federal Government? US Regulatory Compliance 101

These days, many companies, especially those that work with the federal government must navigate an intricate web of regulations and rules. While meeting US regulatory compliance standards is a legal requirement; it is also a critical component of protecting sensitive data and ensuring the efficiency of operations. Topics like what regulatory compliance entails, the challenges businesses face involving compliance and how businesses can ensure they meet compliance standards will all be discussed in these blogs.

What Is Regulatory Compliance?

US regulatory compliance includes adherence to laws, guidelines and standards relevant to a business’s operations. For organizations working with the U.S. government, this means ensuring that they comply with a range of legal requirements, from data protection laws to cybersecurity protocols. When you fail to meet these requirements it can result in severe penalties, including legal actions, fines and reputational damage.

To ensure your organization’s compliance, you must operate within the bounds of federal and state laws. These can include the Health Insurance Portability and Accountability Act (HIPAA), the Sarbanes-Oxley Act (SOX), the Payment Card Industry Data Security Standard (PCI DSS) and the Federal Information Security Management Act (FISMA), among others. Regulatory laws govern everything from how your data is stored and protected to how businesses interact with federal agencies. 

Challenges Facing Government IT Compliance

There are unique challenges that happen when working with government entities. Especially when it comes to US regulator compliance, here are some of the most common ones: 

1. Cybersecurity Threats  

Cybersecurity is one of the bigger challenges your organization may face if you work with any government agency. Municipal governments handle sensitive data daily, making them prime targets for cyberattacks. Ensuring that the data is protected according to US regulatory compliance standards is crucial to avoid breaches that could have local or national security implications.

2. Outdated Technology  

A lot of government entities rely on legacy systems that are not only inefficient but also more susceptible to cyber risks. You may be thinking that maintaining old technology would be more cost-effective, however, that is not the case. It can be much more expensive in the long run when factoring in the risks of noncompliance and data breaches. 

3. Seamless Data Integration  

There are a variety of systems that government agencies use to handle their operations. The variety of systems can make it harder to communicate securely and efficiently, therefore your IT infrastructure must be thoughtfully designed. Data must be exchanged across platforms in a way that adheres to US regulatory compliance standards, which can be complicated without the right IT infrastructure.

4. Citizen Access to Digital Resources  

Citizens need to have easy access to digital services, which government agencies are responsible for upholding. For some communities, particularly lower-income populations, it can be a significant hurdle. Governments must also protect this access in compliance with regulations, ensuring personal data is handled securely and responsibly.

5. Data Protection and Privacy  

Citizen data is incredibly valuable and ensuring it’s collected and stored following all US regulatory compliance is essential. Everyone has a right to have their personal information protected, stored securely and used only for its intended purpose, with limited access strictly enforced.

Key Regulations for U.S. Government IT Compliance

Many different regulatory frameworks govern data protection and security. Here’s a look at some of the most critical regulations you need to be aware of:

1. HIPAA  

HIPAA laws govern the protection of health information. Any organization that handles sensitive health data must ensure that the information is stored, transmitted and processed securely. This isn’t just for healthcare providers but any third-party vendors that work with healthcare providers or personal health information. 

2. SOX (Sarbanes-Oxley Act)  

SOX is focused on protecting the public from corporate fraud and ensures transparency in financial reporting. Most public companies in the U.S. must comply with these requirements, the main one being securing sensitive financial data.

3. PCI DSS  

PCI DSS protects customer financial data. Companies that have to comply include any that take credit card payments. If your organization processes or stores cardholder information, then compliance with this is mandatory. 

4. FISMA (Federal Information Security Management Act)  

U.S. federal agencies have to comply with FISMA, which outlines standards for safeguarding sensitive government information and IT systems. It requires compliance with the National Institute of Standards and Technology (NIST) cybersecurity framework, which helps federal agencies manage risks. 

5. CCPA (California Consumer Privacy Act)  

While the law focuses on California, the CCPA has national implications, particularly for businesses that collect personal data on any California residents. US regulatory compliance for organizations working in California means adhering to strict rules on data transparency, privacy and consumer rights. 

The Importance of Compliance for Businesses

Why is regulatory compliance so important? Aside from avoiding penalties and fines, compliance is critical for protecting customers, clients, employees and assets. When your organization demonstrates a commitment to following regulatory guidelines, it fosters trust with its customers and partners. 

Failure to meet compliance standards can have disastrous consequences. Long-term damage to your reputation can come from data breaches, legal action and loss of public trust. Moreover, government contracts may be terminated if an organization fails to comply with key regulations. This makes it vital for businesses to understand and implement compliance measures effectively.

Common Obstacles to IT Compliance

Meeting regulatory compliance requirements can be challenging for businesses, especially when dealing with evolving technology and complex regulations. Here are some common obstacles: 

1. Prevalence of Bring Your Own Device (BYOD)  

Allowing your employees to use their own devices for work can improve flexibility and reduce costs. However, if you don’t have a robust BYOD policy, businesses risk failing to meet compliance standards, as personal devices may lack the security protocols required for handling sensitive data. 

2. Third-Party Vendors  

Many businesses use third-party vendors as they are often essential to business operations. However, transferring data to and from them can open up vulnerabilities. Many US regulatory compliance standards have laws in place to ensure vendors comply with them to avoid any breaches or other cyberattacks.

3. Software Updates  

Software updates don’t always just mean new features and technological advancements. They frequently mean that new security measures are put into place to patch vulnerabilities. However, if your business struggles to stay current with the updates it will leave you vulnerable to security risks and noncompliance. 

4. Internet of Things (IoT) Devices  

Many organizations are starting to use IoT devices, which poses additional compliance challenges. Many IoT networks lack robust security measures, meaning businesses must be diligent in testing devices and networks to avoid vulnerabilities. 

Steps to Ensure US Regulatory Compliance

How can businesses working with government entities ensure they are compliant? Here are some practical steps:

1. Conduct Regular Audits  

Your organization, or a trusted IT company like OrlanTech, should regularly audit your IT systems to ensure they comply with the latest regulations. Compliance requirements often change, and staying proactive is key to avoiding penalties.

2. Employee Training  

Employees are typically the first line of defense when it comes to cybersecurity. They’ll need to be trained on compliance standards and cybersecurity, like handling sensitive data and adhering to security protocols to meet whatever US regulatory compliance standards your industry requires.

3. Update Cybersecurity Protocols  

Cyber threats evolve constantly, and so should your defenses. Regularly update your cybersecurity measures, including firewalls, encryption and antivirus software.

Need Compliance Help?

Working with federal and state governments requires strict adherence to regulatory standards, and understanding US regulatory compliance standards is essential for protecting sensitive data and maintaining operational efficiency. To ensure your business is fully compliant, book a meeting with our experts today and get the support you need.