Developing an Integrated Anti-Fraud, Compliance, and Ethics Program

Transcription

1 Developing an Integrated Anti-Fraud, Compliance, and Ethics Program Implementing a Whistleblower Helpline 2018 Association of Certified Fraud Examiners, Inc.

2 Discussion Questions 1. Does your organization have a formal reporting mechanism (i.e., a helpline)? If so, how do you incorporate it into in your compliance and ethics program? Who receives and responds to reports? 2. Does your organization have a formal whistleblower policy or program? How has that been communicated to employees? 3. Does your organization have a separate policy to protect whistleblowers from retaliation? 2018 Association of Certified Fraud Examiners, Inc. 2 of 27

3 An important gauge of the compliance and ethics program s success is how free employees feel to raise questions and concerns. Introduction 2018 Association of Certified Fraud Examiners, Inc. 3 of 27

4 Detection Method Why Implement a Helpline? Initial Detection of Occupational Frauds Tip Internal Audit Management Review By Accident Account Reconciliation Other Document Examination External Audit Notified by Law Enforcement Surveillance/Monitoring IT Controls Confession 5.6% 5.5% 5.5% 3.8% 3.8% 2.4% 1.9% 1.3% 1.3% 13.4% 16.5% 39.1% 0% 10% 20% 30% 40% 50% Percent of Cases 2018 Association of Certified Fraud Examiners, Inc. 4 of 27

5 Why Implement a Helpline? To proactively detect and address misconduct To identify areas that might need improvement To reinforce an ethical corporate culture To comply with laws and regulations To encourage internal reporting of concerns To mitigate fines and penalties 2018 Association of Certified Fraud Examiners, Inc. 5 of 27

6 Establishing the Reporting Mechanisms Objective is to remove all possible barriers to reporting Provide a variety of channels that: Are free to use Are easily accessible Are available 24 hours a day, 365 days a year Facilitate two-way communication with the reporting party 2018 Association of Certified Fraud Examiners, Inc. 6 of 27

7 Establishing the Reporting Mechanisms Telephone Online form Mail (e.g., PO Box) In-person reporting Suggestions and concerns box 2018 Association of Certified Fraud Examiners, Inc. 7 of 27

8 Establishing the Reporting Mechanisms Internally managed or third-party helpline? Costs (e.g., training, operations, technology) Coverage (i.e., 24/7/365 or part-time) Accessibility Competency of individuals who staff the helpline Perception of trustworthiness and independence Desire and capability for anonymous reporting Effect on organizational processes 2018 Association of Certified Fraud Examiners, Inc. 8 of 27

9 Considerations in Implementing the Helpline Support from senior management: Embraces and understands whistleblowers Designates a senior-level helpline champion (CECO) Available to internal and external parties Anonymity and confidentiality Publicizing the helpline 2018 Association of Certified Fraud Examiners, Inc. 9 of 27

10 Addressing International Differences Legal and regulatory issues Language barriers Cultural differences Accessibility of reporting mechanisms 2018 Association of Certified Fraud Examiners, Inc. 10 of 27

11 Creating a Culture of Whistleblower Support Whistleblowers face numerous real and perceived risks. Management must foster an environment where employees feel comfortable reporting concerns Association of Certified Fraud Examiners, Inc. 11 of 27

12 Creating a Culture of Whistleblower Support Effect of government whistleblower programs (e.g., Dodd-Frank) Anti-retaliation policy Rewards for whistleblowers Recognizing known whistleblowers 2018 Association of Certified Fraud Examiners, Inc. 12 of 27

13 Collecting Information from Whistleblowers Intake staff should receive training in how to ask questions without interrogating. Process should include ability for each report to be easily located and tracked Association of Certified Fraud Examiners, Inc. 13 of 27

14 Collecting Information from Whistleblowers Unique identifying number Report date Source and contact information (if provided) Whether anonymity is desired or waived Details of the allegation Any other information provided Recommended action based on initial assessment of the report 2018 Association of Certified Fraud Examiners, Inc. 14 of 27

15 Collecting Information from Whistleblowers Use of case management software Security considerations for records access 2018 Association of Certified Fraud Examiners, Inc. 15 of 27

16 Communicating with Whistleblowers Establish a protocol for keeping whistleblowers informed. Maintain confidentiality even after the report has been closed. Provide whistleblowers a case number to use in future communications. Provide anonymous callers a specific time or phone number to use for follow-up reports Association of Certified Fraud Examiners, Inc. 16 of 27

17 Responding to Tips Response protocol often determines the overall success of the whistleblower program. CECO has oversight of the helpline but typically delegates first line intake to other staff: Coordinate intake with legal, HR, and internal audit. Incoming reports should go to at least two parties: Designate a party and hotline champion. Must balance confidentiality concerns Association of Certified Fraud Examiners, Inc. 17 of 27

18 Screening Tips Assess the merit of the facts and source: Document and set aside meritless reports. Assess the type of issue involved: Determine investigation procedures and party. Escalate high-risk reports to an oversight body: Establish a protocol for determining risk level of reports. Address reporting abuses Association of Certified Fraud Examiners, Inc. 18 of 27

19 Assessing Whistleblower Program Effectiveness The program must include a formal assessment of its effectiveness. A low volume of reports is not the goal. Methods: Employee surveys Metrics and benchmarking 2018 Association of Certified Fraud Examiners, Inc. 19 of 27

20 Assessing Whistleblower Program Effectiveness Complaints per period Average number of complaints per employee Complaints by reporting mechanism or method Complaints by location or division Complaints by claim type 2018 Association of Certified Fraud Examiners, Inc. 20 of 27

21 Assessing Whistleblower Program Effectiveness Percent of anonymous complaints Repeat versus first-time reporters Reports of retaliation 2018 Association of Certified Fraud Examiners, Inc. 21 of 27

22 Assessing Whistleblower Program Effectiveness Average cost per complaint Percent of complaints substantiated Percent of complaints investigated Length of time to investigate and close reports Changes in complaints received after new awareness efforts Changes in the number and type of complaints after compliance and ethics refresher training 2018 Association of Certified Fraud Examiners, Inc. 22 of 27