In a previous post, we described how to create workplace culture, as well as a fraud prevention program, that would limit the amount of employee dishonesty. As a leader, if you find your company in a fraud situation, it’s important to consider outsourcing the investigative process.
Engaging a forensic professional can speed the creation and implementation of effective policies and procedures related to fraud prevention. The creation of policies and procedures is difficult and no one size fits all. An organizational review is often best accomplished through independent eyes. There are hundreds of ways to steal from an organization, and knowledge of how fraud has occurred in other organizations will greatly inform the process to strengthen internal controls.
The procedure must be particularly clear and on target as to what happens when an incident is suspected or discovered. Because the stress level is very high, governments often take the wrong actions when placed in this position; whereas, a third party will be objective. Leaders must consider employee rights and preserve significant amounts of evidence. They must discover facts and present them in ways that require great skill in examination and interviewing. There are extensive legal concerns, from employment to criminal law, and most Board members and administrators are not well equipped or trained to handle these issues. All at once, these parties must construct a road that properly considers and protects legal rights, conducts an appropriate and thorough investigation that does not destroy vital evidence, maximizes restitution and financial recovery, complies with insurance contracts, communicates effectively with the public, and fixes the problem so it will not happen again. And through all this, these parties must run the functions of government and continue their day-to-day responsibilities—no small task.
Engagement of a forensic professional, particularly one knowledgeable in the unique requirements and environment of local government, is essential when an incident is reported or suspected, and this professional should be included in the investigation from the very beginning. Much of what needs to be done when investigating an issue should not be completed by line management because it is accusatory and very unpleasant. As things said in an argument cannot be taken back, it is difficult to re-establish cordial working relationships with staff if the investigation is not conducted by an outside party. When the dust settles, the outside party can go home and the organization is better able to heal.
We know that people steal from their employers or the organizations with which they do business because they believe that they can without getting caught. The risk/reward equation tells the fraudster that it is a victimless crime that probably has no consequences. The answer to this view is a system that becomes dedicated to saying no to this type of behavior—a system that makes it very clear employees are monitored and the organization values and demands integrity. There is no need to reinvent the wheel in this regard because countless organizations have met this challenge and have become stronger as a result. It takes purpose, a solid program and the will of determined leadership.