Using Employee Trips Referrals To Detect Fraud

By i-Sight Software

The goal of workplace fraud prevention programs is to establish a system with the ability to stop fraud before it happens. Companies want to hire honest employees that have beliefs and ethics similar to those of the company to create a culture where it's mutually understood that fraud and unethical business practices are unwelcome. Ending corporate fraud altogether can be very difficult and slightly unrealistic. Therefore, many companies set their sights on earlier detection of fraud and focusing on a decrease in the number of cases and expenses tied to corporate fraud on an annual basis.

When companies invest in reporting channels and internal measures to prevent workplace fraud, it becomes harder for employees to commit fraud, as they know that they are being watched and there are fewer chances for the fraudulent act to take place and remain unnoticed. In 2008, the weapon of choice when it came to reporting issues of internal workplace fraud or misconduct was the use of tips/ complaints from employees, vendors, customers or another source that had information regarding the activity.

The ACFE Report to the Nation on Occupational Fraud and Abuse:
The Association of Certified Fraud Examiners 2008 Report to the Nation on Occupational Fraud and Abuse shows not only an increase in the use of tips as a fraud detection source since 2006, but it also depicts just how many more fraud cases are detected through this particular method. The data in the graph below comes from the 2008 Report to the Nation on Occupational Fraud and Abuse, showing the percentages of cases reported through specific channels, as well as any changes in their usage when compared to the respondent results from the survey in 2006. The 2008 Report to the Nation on Occupational Fraud and Abuse also found that of the cases identified through hotline tips in particular, approximately 58% of them were tips provided by employees of the company. The next largest group providing tips were company customers, reporting almost 18% of cases detected through the use of hotlines.

Gathering Tips
With the above statistics, it's easy to see the importance of the role that your employees play in the detection of fraud. Hotlines and other anonymous reporting tools are methods that make it easier for employees to communicate any observed fraud activities or misconduct that they encounter. Internal audits and internal controls are other important contributors that lead to the fact that the easiest ways to detect fraud come from within- you just need to have tools in place that allow these forms of internal detection to occur.

Solutions such as i-Sight Investigation Software allow you to receive notifications of new cases or complaints made through multiple channels- including your hotline provider, internal webform, or directly from employees. This type of hotline integration means that new cases are instantly funneled into i-Sight and placed in the New Referrals Queue, then a manager can review the details and decide on the next steps. Another option is to send e-mails to i-Sight. Many teams operating without an enterprise investigative case management system rely heavily on e-mail. Employees or local HR staff send e-mails into shared folders where they’re reviewed to determine the next steps. i-Sight allows you to keep that process– you don’t even have to change the e-mail address being used. These e-mails get redirected to i-Sight and a new case is automatically generated.

i-Sight is a web based software and uses a web form to record new cases. Many of our clients place a simple referral form on their intranet or vendor/customer portal. This is an easy way to collect tips and referrals, and you decide what information to ask for- you can also make one available through your website. All of these options are flexibile and easy to implement in order to better manage incoming tips and the investigation process.

i-Sight then makes it easier for investigation teams to manage cases, proiritize cases based on risk, identify repeat offenders and track trends based on the nature of the allegation. i-Sight provides investigators with the following benefits:

- Meet regulatory and legal guidelines
- Improve communication across the enterprise
- Centralize case information
- Effectively manage milestones and key dates
- Automate reminders and other alerts
- Identify and understand trends
- Accelerate the case resolution cycle time

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