Hotlines help fraud and corruption detection!

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Clayton Thomopoulos | Director & Certified Fraud Examiner | Deloitte Risk Advisory | cthomopoulos@deloitte.co.zawww.deloitte.com |


A fraud and ethics hotline remains a critical mechanism in detecting fraud and corruption through anonymous tip-offs from both employees and external parties.

Research continues to indicate that a hotline is one of the most effective detection mechanisms in combatting fraud and corruption. The successful implementation and publicity pertaining to a hotline service is merely the first step to unlocking the true benefit of the anonymous reporting facility.

The management and response to cases is a vital element in creating trust, understanding and credibility of the hotline service and ultimately the organisation’s stance toward fraud and corruption. Efficient management of cases begins with the effective response to allegations received and timely resolution of cases.

Approach

Whilst it is difficult to initiate a comprehensive investigation into all allegations received via the hotline, it is imperative to have a defined response process of addressing each respective allegation in a manner that is consistent, auditable and recorded.

Reports pertaining to fraud, theft, corruption and ethics violations require immediate attention in accordance with a documented response plan, which should, amongst others, dictate timelines and accountabilities for such matters.

Forensic Triage is an effective method of obtaining an initial assessment of all hotline and whistle blower reports received, and serves to provide a high-level overview and assessment of the following:

  • Type of allegation and the purported responsible parties
  • Reporting protocols applicable to the respective allegation and individuals allegedly implicated
  • Completeness of information contained in the whistleblower’s tip off
  • Further information that may be required from the whistleblower (should they make contact with the call centre again)
  • An early assessment of the allegation(s) received through the review of applicable source documentation, data and preliminary investigative steps relevant to the allegations at hand
  • Documented feedback on preliminary findings and next actions required, if any.

The seamless approach to addressing allegations of fraud and corruption becomes increasingly important when one considers the technology enabled infrastructure, which organisations and business are leveraging to deal with their clients and vendors.

Risk

The ability to mobilise Forensic experts immediately upon receipt of an allegation via the hotline is often a difficult task for many organisations with limited or no internal Forensic capacity.

Forensic Triage provides an avenue for “on call” Forensic experts to be engaged as and when required whilst allowing you to maintain an “in control” approach to mitigating fraud risk. The benefits of this on demand service include access to an independent diverse set of skills, which is essential in ensuring the ability to respond to all allegations reported.

These skills include Certified Fraud Examiners and experts in cyber forensic, digital forensic, forensic investigation, fraud risk management, forensic data analytics and anti-corruption. Outsourced and co-sourced capabilities allow for greater agility and flexibility, and access to the latest methodologies, global best practice and tools.

Specialised skills are required in Forensic Triage services for a number of reasons including:

  • The capacity to independently assess the initial veracity of the allegations through analysis of information received and obtained as part of the preliminary assessment is paramount
  • Evidence collation (including digital evidence) and securing in accordance with best practice and legal parameters
  • Legislative considerations including reporting obligations must be borne in mind when conducting these Forensic Triage services
  • Addressing the preliminary assessment without prejudicing a potential full-scale investigation requires experience in prioritising the Forensic Triage steps and garnering of further evidence
  • Application of historical experience and investigative steps into allegations of a similar nature
  • Identification of key risks which have a direct/indirect bearing on the organisation and may require immediate bespoke forensic assessment in parallel with the Forensic Triage.

A further consideration in successfully leveraging the full value of a hotline service is tracking, reporting and analysing statistics. In order to manage emerging fraud risks the whistleblower reporting trends must be subjected to analysis on ongoing basis in conjunction with organisational risk management initiatives.

A secure, online Case Management System enabling allocation of tasks and feedback in respect of inbound tip offs will allow for efficient access to statistical data and progress monitoring of active and resolved matters. It will also enable the organisation to focus prevention and detection initiatives in key areas of the business where fraud risk reporting is prevalent.

A critical element to managing fraud and corruption risk is to “close the loop” on any associated risks identified through the implementation of mitigating controls, testing of such controls and training of employees.

For more information on how you can mitigate fraud risks for your business go to https://www2.deloitte.com/za/en/services/risk/fraud-risk.html?icid=nav2_fraud-risk |