Is this what you look like when it comes to preparing investigation reports? Writing investigation reports doesn’t have to be daunting. A standardized reporting structure improves the consistency of reports amongst investigators. Standardized reporting provides investigators with a reporting format to follow and reduces the time spent preparing investigation reports. This information is all fine and dandy, however, a question we frequently receive is, what information do I actually need to put in an investigation report?

 Here is our answer to that question:

1. Information to Identify the Case:

Begin the report with case specific information that identifies the case the report is related to. Include information such as the investigator’s name, case number, the date the case was entered and the date it was assigned to the investigator.

2. Referral Source:

The next section should include the complainant’s information. The complainant’s work phone number, e-mail, employee number, office location, department and job title help identify the person lodging the complaint.

3. Allegation Details:

Harassment, discrimination, retaliation — what type of allegation is under investigation? In this section, be sure to include as much detail as possible about the initial complaint.

• Identify the type of case.
• Who the alleged victim is- may or may not be the same person as the complainant.
• How the complaint was received- hotline, face-to-face, web form, etc.
• Allegation details- what happened, where, when and any other information provided in the initial complaint.

4. Information About the Subject:

The information required for this section of the report is similar to that of the “Referral Source” section. However, it’s the subject’s (the accused person’s) information being documented this time. Include their name, e-mail, work phone number, office location, department and job title.

5. Investigation Scope/ Purpose:

Include a statement that describes the mission and objectives of the investigation. Answer the question “what is the investigation trying to prove?”.

6. Case Notes:

The case notes section should include an overview of the tasks assigned and action taken throughout the investigation. Be sure to include a brief description of the task, steps taken to complete it, who completed the task and when.

7. Interview Summaries:

List the investigation interviews that took place throughout the investigation. Make sure the list is in chronological order, beginning with the first interview, ending with the last. Summary details are short and sweet, outlining:

• Name of the interviewer- also include the names of any other people who sat in on the interview.
• Name of the person interviewed and their role in the investigation- complainant, subject, witness.
• Interview location.
• Date of interview.

In this section of the report, there’s no need to go into detail about the events of the investigation- that’s what the next section is for!

8. Interview Reports:

Interview reports are brief summaries of each of the investigation interviews. In addition to the information in the above section, this part elaborates on the investigation interview to include:

• Credibility Assessment- Certain factors will determine the credibility of an interviewee’s statements. We cover the topic of determining credibility in our post “Investigation Interview Questions to Determine Credibility“. This section of the report should list any indicators that contribute to the belief that the interviewee is or isn’t a credible source.
• Investigator Notes- Summarize the introduction, incident overview and conclusion of each interview. In the introduction, outline the explanation of the interviewer’s role in the investigation, the purpose for the interview, efforts to maintain confidentiality and retaliation protections. The incident overview section should include the interviewee’s description of events related to the incident, whether or not they are aware of any witnesses, where/when the incident occurred and any background information linking the involved parties. Notes to be made about the interview conclusion should include thanking the interviewee, reiteration of confidentiality concepts, review of statements made and interviewee singing of investigator notes.

9. List of Evidence:

As simple as it sounds- list the evidence collected during the investigation. For the sake of the investigation report, include information such as:

•  Type of evidence collected- interview, video, photo, audio tape, e-mail, etc.
• Name of person who presented the evidence, as well as their role in the investigation.
• Date the evidence was collected.
• Location of the evidence.

10. Recommendations:

Conclude the report with recommendations. After reviewing all of the investigation materials, what type of action should be taken? Does evidence support the violation of workplace policies? Make sure recommendations are backed up by the consequences outlined in the company code of conduct or other policies governing employee behaviour in the workplace. Include a plan of action, identifying next steps in taking corrective action.

Reporting With a Case Management System

Case management solutions simplify the investigation reporting process, creating reports with the click of a button. Initially, a report template needs to be developed, outlining the sections of the report. Information from the investigation is pulled from the case file, automatically filling in each of the sections in the report. The report is then ready for export, with the investigator choosing the desired format for the report (PDF, MS Word document, etc.).

Workplace investigations vary between industry sector and must be tailored to the incident under investigation. In the financial services industry, there is an increased number of risks companies face, especially during tough economic times. Fraud, money laundering and compliance issues are only a few basic examples of financial crimes that require timely, thorough investigations. Financial crimes not only impact the reputation and sustainability of companies, but these crimes also have severe social impacts that change the lives of investors and the public at large. For example, the Madoff ponzi scheme left hundreds of thousands of people without their entire life savings, and for some, bankruptcy.

Today, investigations in the financial services industry are incredibly complex, as schemes cross multiple borders and are global in scope. This post covers some of the challenges investigators encounter during financial investigations, as well as some solutions for implementing flexible reporting systems that make it easier to conduct investigations on a global scale.

Financial Services Investigations

As with any type of investigation, once a tip or information pertaining to the presence of a financial crime has been received, a preliminary investigation must be conducted immediately to determine if the information warrants a full-fledged investigation. If the allegations lead to suspicious activity, the case must be assigned to the appropriate investigator in order to conduct the investigation in a timely manner. Gathering evidence and conducting interviews are challenging in a financial crime investigation. According to the IRS:

“Financial investigations are usually very document-intensive. Specifically, they involve records, such as bank account information, real estate files, motor vehicle records, etc., which point to the movement of money. Any record that pertains to or shows the paper trail of events involving money is important. The major goal in a financial investigation is to identify and document the movement of money. The link between where the money comes from, who gets it, when it is received and where it is stored or deposited, can provide proof of criminal activity.”

Managing the large volumes of evidence associated with financial crimes investigations can be overwhelming and difficult to track. i-Sight simplifies evidence management by allowing evidence to be attached directly to the case file. Electronic evidence- e-mails, documents, images, video and audio clips; can be attached directly to the case file. To manage physical evidence, i-Sight generates printable barcodes that can be attached to the exhibit and records information in the case file.  Exhibits are automatically numbered and categorized (witness statement, interview video, etc.). Investigators can also describe the contents of the exhibit for easy reference within the case file.

Compliance with state and federal laws are mandatory requirements for all financial crime investigations. Compliance standards are built into the workflow rules in i-Sight to ensure compliance with laws such as the Bank Secrecy Act, Sarbanes-Oxley, Basel II and the Patriot Act. As laws and regulations are amended, changes can be easily made to the i-Sight system to reflect the updated laws. 

Manually reporting on financial crime investigations is incredibly time consuming, as there’s a lot of information to sort through. Investigation software drastically reduces reporting time by extracting information and evidence from within the case file and placing in a customized investigation report template at the click of a button. Information gathered during a financial crime investigation usually needs to be shared with members from other agencies and regulatory bodies. State agencies and other regulators can be granted access to specific cases in i-Sight as needed, allowing them to view and print the data required to support criminal proceedings. This feature makes it easier to share information. Privacy is maintained as case access can be granted and restricted as needed.

Lastly, implementing a web-based investigation software system helps investigators overcome geographic barriers during investigations. i-Sight stores cases in a centralized location, making them accessible from any location. Since many financial crimes involve cross border transfers of money, investigative teams overseas can collaborate on investigations with investigators in North America- all that’s required is an Internet connection. Web-based solutions reduce the amount of time spent on investigations, while also reducing investigative costs, as the amount of travel requested of investigators is greatly reduced.

i-Sight Investigation Software for Financial Services

Regulatory drivers including the BSA, Patriot Act, Basel II and Sarbanes-Oxley have created a demanding mandate for financial institutions. i-Sight Compliance Investigation Software provides financial institutions with a workflow driven solution for managing compliance investigations. i-Sight is fully customizable, designed to ensure compliance with the above mentioned regulations and legislation. i-Sight provides investigative units with a system to quickly respond to suspicious claims and other fraud alerts. i-Sight uses a workflow engine to ensure proper assignment of cases and escalation of cases or tasks that are overdue. Investigators are able to record contacts, notes, activities, evidence, and generate emails, template letters and to-do’s.

In order for a workplace investigation to be credible, investigators must deploy certain tactics to verify the accuracy of interview responses. In a previous post, Investigation Interview Questions to Determine Credibility, we reviewed the EEOC’s 5 factors to consider when determining statement credibility during investigation interviews. One of the toughest challenges to overcome during investigation interviews is the fact that witnesses may withhold or modify their responses to protect the subject- or the complainant and possibly even themselves. As investigators are often pressed for time when conducting internal investigations, they cannot afford to get hung up on determining who is correct in the “my story vs. their story” battle. We have compiled a list of simple tips and techniques investigators can use to determine investigation interview credibility.

Please note: It’s unlikely that the occurrence of a single deception indicator means that the interviewee is lying. Therefore, investigators should carefully observe for multiple deception indicators during interviews when determining statement credibility.

1. Consistent Statements

When asking questions related to the timeline of events involved in an incident, watch for inconsistencies or vague responses. This can be done by asking the interviewee to repeat or recall the order of events at different times throughout the investigation. Ask interviewees to go into greater detail about the incident-related events.  In the “Black Book of Lie Detection,” author Martin Soorjoo states that “when digging deeper, do so in an ‘interested’ manner rather than accusatory. Lying about detail requires a lot of thought and concentration.”

2. Body Language

Controlling physical actions is extremely difficult- hence the phrase “actions speak louder than words”. Pay attention to the physical tendencies displayed throughout the interview. Observe facial expressions and listen to the variations of pitch and tone in their voice. Body language that signifies lying varies across different cultures. Some of the common physical gestures exhibited by someone who is lying include: nail biting, touching their face- usually rubbing nose or covering mouth, avoiding eye contact, stroking the back of their neck, sweating, turning red in the face and fidgeting. In the “Black Book of Lie Detection,” author Martin Soorjoo states that “if an investigator believes the interviewee to be lying, don’t let on about it. Innocent people may become defensive if accused of lying and will demonstrate signs of stress through nonverbal and vocal cues- which can be mistaken as lying.”

3. Consider Your Own Bias

Investigators must remain neutral and refrain from making prior judgments in any investigation. Biases not only shape the attitude an investigator has towards the individual being interviewed, but can also influence the types of questions asked during investigation interviews. In the Business Management Daily article “Assessing Witness Credibility in Workplace Investigations,” they recommend bringing an additional investigator into the interview so that there’s an extra person to compare impressions and notes with. If personal bias is too difficult to overcome, consider asking an investigation manager to reassign the case to someone else to avoid sacrificing the accuracy of the investigation.

4. In the Eyes

Martin Soorjoo, author of the “Black Book of Lie Detection,” provides great insight into how an interviewee’s eyes can give them away. According to Soorjoo, an increased blink rate is often consistent with telling lies. Looking away and avoiding eye contact is tricky, as it may not always signal a lie is being told. When people lie, their pupils tend to dilate, which can be a useful indicator, as the body has no control over pupil dilation.

The free guide below includes an interesting “eye” test that can be used to decipher whether or not a lie is being told.

5. Incorporate Background Questions Into Interviews

At the beginning of an investigation interview, it’s beneficial to ask general background questions as a way to ease the interviewee into the environment. It’s likely that the person being interviewed will expect the questions to be based solely on the incident, therefore, background questions can be used to gauge the ‘normal’ responses and physical tendencies of the respondent. When investigators begin asking difficult, case-related questions it’ll be easier to accurately measure and monitor behavioral changes that indicate lying.

Investigators must be cautious during investigation interviews. People often mistake physical manifestations of stress as being indicators of lies being told. This sometimes happens to innocent people standing trial in a criminal case for a crime they didn’t commit. The irony is, the guilty defendant will have had plenty of time- sometimes years, to rehearse their lie. The innocent person will not have rehearsed because they are telling the truth and are scared because they have a lot to lose. Take this advice into consideration throughout ALL investigation interviews.

Now, more than ever before, companies are held liable for their actions and are closely monitored to ensure they’re conducting business in a socially responsible manner. When companies face allegations warranting a workplace investigation, it becomes difficult to control costs, as the company can’t afford to cut corners throughout the investigative process — without facing serious consequences.

There are several solutions available that can help companies control the cost of workplace investigations, while ensuring compliance with federal and industry laws and regulations. From policy development to investigation management systems, investigative teams now have the opportunity to spend less time on paperwork and more time actively in the field conducting investigations.

Workplace Investigation Money Saving Tips

Company policies, reporting mechanisms and investigative processes each impact the time and costs associated with an investigation. These three components must be examined together to help control costs and maintain high quality investigations. Reducing redundancies and establishing clear reporting lines can help reduce confusion internally, which can also reduce investigation costs by reducing the time it takes to complete investigative tasks.

Workplace Policies

Policies must be easy to understand, documented and distributed to employees, communicated and discussed with all staff, as well as given the appropriate amount of time when it comes to training employees. When employees understand company policies and the consequences for violating them, investigation costs can drop, as the number of violations reported may decrease. Understanding company policies also helps reduce conflict in the workplace, therefore reducing occurrences of workplace misconduct. It’s important for employers to spend extra time working with employees to help them understand the reason for implementing policies and the importance of following them while at work. The tone at the top significantly impacts the ability of employees to adopt company practices.

Policies that are clearly defined make investigations run smoother, as ambiguity is reduced and proper penalties for violating policies are clearly defined. Policies must be developed to guide decision making surrounding whether or not certain allegations require further investigation. Conducting a full-fledged investigation into allegations that can be resolved on simpler terms wastes both the time of the investigator and company money. At the same time, dismissing allegations and not following through on an investigation can cause a company to incur significant costs if the case escalates and the claimant decides to take the issue to another level. Companies should develop a policy outlining the steps to take when conducting a preliminary screening of all cases before making a decision regarding the investigation. A pre-screening policy helps maintain consistency between each member of the investigative team and helps avoid decisions that could potentially increase investigative costs.

Investigation Software Solutions

The proper management of case loads also helps reduce the costs associated with workplace investigations. Implementing a system, such as i-Sight Investigation Software, allows companies to complete cases in a centralized system that can be accessed from any location, as long as there’s an Internet connection available. i-Sight is a flexible, fully customizable solution, combining  functionality with affordability. Outdated processes, such as the use of spreadsheets, slows down the investigative process and can be a nightmare to update when new regulations and laws are implemented to govern particular industries. i-Sight helps reduce redundancies throughout the investigation process– for example, i-Sight can pull information from previous cases or employee databases to save time by automatically populating the data into the case file.

With i-Sight, investigators receive case and task assignment alerts via e-mail, and if tasks are left inactive, another alert is sent to the investigator, drawing attention back to the case. The use of customized workflow rules allows investigation managers to maintain control over each investigation and check in on case progress when using i-Sight dashboards, drilling down to the case level. Setting deadlines for tasks during assignment allows cases to be completed on time, reducing the costs associated with investigations that drag on longer than necessary. Incoming cases can be assigned manually or automatically, either way, each case must be accounted for, reducing the risks and costs tied to cases that get abandoned once reported.

Properly managing investigations greatly impacts the costs of workplace investigations. i-Sight provides companies with the ability to identify trends and pin point problem areas within the organization for prompt correction. i-Sight helps reduce the time spent on each case by allowing investigators to collaborate on cases in real time, having centralized access to case information and evidence attachments. This function reduces communication time, allowing each investigator to complete their part of the investigation without waiting on work from other team members.

It seems to be that each week is busier than the last. Here are some of the things we blogged about this week- as well as some other pieces that caught our attention regarding internal investigation, human resources and ethics:

Monday:

• Blog Post- Employee Relations and Ethics Best Practices: General Mills

“In 2009 alone, General Mills received over 20 awards recognizing the company for their corporate reputation and human resource and employee relations leadership - including awards for managing diversity, working mothers, ethics and corporate citizenship. General Mills was listed to the Glassdoor.com “Employees’ Choice -50 Best Places to Work” and after reading employee comments and rankings for General Mills on the Glassdoor.com website, employees consistently give the company high ratings and praise the company for employee benefit and wellness programs, rates of pay, flexibility for employees with families, commitment to employee development and growth and its supportive culture.”

Tuesday:

• Blog Post- Corporate Responsibility Magazine’s Black List

“The Corporate Responsibility Magazine Black List has arrived! The 30 companies that have found themselves on the Black List have landed there due to a lack of transparency when providing the public with important information related to company practices. Included in the list are American retailer Abercrombie & Fitch, Weight Watcher’s and Fidelity National Financial. The CR Magazine reported that 161 of the companies listed on the Russell 1000 large-cap firms did not provide any public information regarding basic employee benefit programs. With consumer demands for company information and the competition striving to become as transparent as possible with their practices, companies cannot afford to dismiss the importance of providing the public with basic company information.”

• Blog Post- 5 More Tips for Conducting Risk Assessments

“Before you start designing and implementing policies within your workplace, it’s important that you conduct a proper risk assessment to make sure that your policies and procedures help to reduce the risks of potential threats within the workplace. Each company faces different threats based on factors such as location and industry type, but there are certain elements that need to be included in all risk assessments. Similar to conducting a basic SWOT analysis, risk assessments make you think harder about different threats and opportunities for your business, allowing you to define clearer goals and make your investment in the risk analysis worthwhile.”

Wednesday:

• Blog Post- Top 12 Compliance Concerns From Global Companies:Part 1

“Integrity Interactive Corporation conducts an annual study identifying the trends and concerns faced by today’s business leaders. As issues of compliance and ethics become a focal point of businesses and policy development, these 12 concerns are the areas that business leaders from around the world feel are the greatest concerns for any globally active company. As laws and cultures differ between both countries and businesses, the number of risks has greatly increased. Here are concerns #1-6 from their list, as well as a discussion surrounding some of the main concerns with in each of these areas and some of the solutions that companies have been using to help mitigate the risks associated with global business.”

Thursday:

• Blog Post- Top 12 Compliance Concerns From Global Companies: Part 2

“Integrity Interactive Corporation conducts an annual study identifying the trends and concerns faced by today’s business leaders. As issues of compliance and ethics become a focal point of businesses and policy development, these 12 concerns are the areas that business leaders from around the world feel are the greatest concerns for any globally active company. As laws and cultures differ between both countries and businesses, the number of risks has greatly increased. Here are concerns #7-12 from their list, as well as a discussion surrounding some of the main concerns with in each of these areas and some of the solutions that companies have been using to help mitigate the risks associated with global business.”

There has been an increase in observed misconduct over the past year. There’s a whole variety of reasons for this, but I think part of it can be attributed to an increase in accessible reporting tools, allowing employees to anonymously report any issues and making it easier to provide feedback.

Many executives and senior level managers are actually encouraging employees to report misconduct, which also means that your compliance and HR departments will need to tackle a growing numbers of investigations. Investigations need to be conducted carefully, as there are many risks that influence the success of your investigation.

Here are some internal investigation techniques that can be implemented in any workplace in order to avoid investigation pitfalls and reduce the risk of unethical behaviour in the workplace:

1. Go Public

Go public with your ethics policy and reporting tools. Train employees to use the reporting tools to make complaints or report misconduct. Also, communicate the importance of the system to employees and reiterate the fact that they can report these actions anonymously. It’s also important to discuss with them that there are policies in place to protect whistleblowers and complainants from retaliation- this aids the investigation process because it puts the complainant at ease and likely leads to better cooperation throughout the investigation. Going public about the reporting tools and ethics policies lets employees know that you- and other employees for that matter, are all paying attention to the actions of those around them. When someone knows that there’s an increased chance of being caught for misconduct, they will likely think twice before following through on their plan.

2. Thorough and Fair Interview Process

In two of our previous posts- Investigation Interview Tips: Questions for Subjects and Witnesses and Complainant Investigation Interview Questions, we outlined the questions and procedures that are part of successful investigation interviews. Investigation interviews are crucial components to the internal investigation process as they are the greatest source of information- allowing you to ask questions, get answers, collect evidence and gain greater insight into the allegations. Ensure that the interviewer doesn’t act in a bias manner, remain impartial. Plan ahead when determining the interview schedule and questions, in order to ensure that you ask everything you need to the first time around. It’s also important to conduct interviews as soon as possible because many of the people you’ll interview have to recall the event based on their memory of the incident- the longer you wait, the more confusing and less detailed the stories could become.

3. Evidence Preservation and Collection

The most important part of this step in the investigation process is removing the subject from any source of evidence until you have gathered everything you need. If the subject has time to demolish evidence related to the incident, the case of the complainant becomes difficult to prove, and the subject could get away with their actions without  facing any consequences due to lack of proof. In the Ethisphere post “Tarun’s Ten Commandments for Conducting Internal Investigations,”  they state that “if an investigation becomes public or is voluntarily disclosed to the government, one of the first questions from a prosecutor or regulator will be: what did the company do within the first 24 hours to preserve and protect its electronic data and secure hard documents from employees and officers?” We outline some evidence collection tips in our previous post 8 Internal Investigation Tips.

4. Reward

When an employee gains the courage to come forward about an incident or observed misconduct, don’t make them feel like they are “being the bad guy”. Employees are able to catch issues while they are small- encourage them to voice their concern, as their actions could prevent your company from being the headline in tomorrow’s news. Create a reward program for the promotion of ethical behaviour and the reporting of incidents. Make sure to maintain consistency when rewarding employees for their proactive, ethical behaviour. Although incentives may not necessarily be the main contributing factor motivating an employee to bring an issue forward, it’s best to praise ethical acts in order to demonstrate your commitment to compliance and ethics in the workplace.

5. Stick to Your Policies… Always

Make no exceptions. Ethics codes and workplace policies for behaviour and reprimanding actions are more than words on a piece of paper- but you are responsible for making that happen. If employees feel they can avoid punishment for their actions, they will try to get away with whatever they can. A lot of time is invested into developing a code of ethics, training employees and informing them of the consequences of acting against workplace policies. Employees know what the consequences are, and it should also be common knowledge that, no matter what, ”the punishment fits the crime.” You as a manager, and your policies, will be taken in a more serious manner if you adhere to the policy at all times and refuse special treatment of justifying a lesser punishment for an employee.

This is the second part of the Workplace Theft Prevention Tips we published yesterday.  Chances are, if you know you are going to get caught, you won’t do it. At the same time, employees need a clear outline as to what is acceptable and what isn’t, so that they can refrain from activities that are not allowed at work. In some cases, it’s necessary for managers to assume the “Big Brother” role within their organization in the fight against fraud. When employees know someone is holding them responsible for their actions and that consequences are enacted on those who do otherwise, you will notice a difference in the decisions they make.

In continuation to our post yesterday, here are recommendations 5 through 10, to help you prevent theft and fraud in the workplace.

6. Audits

Conduct both scheduled and random financial and accounting audits. In the article “Top Ten Ways to Prevent Employee Theft”, forensic accountant/ fraud examiner Tracy Coenen points out that “when employees are aware that there will be random checks of their areas, they’re more likely to be honest.  Also, they will not feel singled out when it’s their turn for an audit.” Make these audits part of company policy- this way it demonstrates to employees that you are taking the necessary measures to protect the company against theft and fraud. When audits are part of company policy, employees expect audits to take place, therefore, audits are also an investigation tool, as they can be a great source of evidence.

7. Pay Attention to Change

A key investigation technique is to be aware of changes in employee actions. There could be multiple reasons to cause an employee’s pattern of behaviour, but you may want to monitor these changes in case something happens down the road- these changes should be documented, as they can be used as a source of evidence if an investigation occurs. In this article on “Preventing Employee Theft” Sherrie Bennett writes that it is important to pay attention to employee problems, “if possible, make sure your employees feel comfortable enough with management that they can come to you if they’re having financial difficulties that might tempt them to take from the company.”

8. Consistent Investigation of ALL Tips

It’s best to investigate, or at least make an inquiry into every incident reported regarding theft or fraud. In order to address the matter quickly and show your commitment to the workplace anti-theft/ anti-fraud policies, action must be taken immediately. The faster you look into the incident and can resolve it, the better your chances for avoiding repeat problems or snowballing into BIG problem that could tarnish the reputation of your company.

9. Lead by Example

Set the tone from the top- this tends to be the trend everywhere for 2010 and beyond. In this article, fraud examiner Larry Cook writes that “every employee — regardless of position — should be held accountable for their actions.” In order to get your employees to believe that you are committed to fighting workplace theft and fraud- and get them to commit to honest practices as well, you need to make sure that all of your actions send the right message. If you’re going to take the time to get employees to follow anti-theft and anti-fraud policies, they will only take you seriously if everyone is held accountable for their actions and there are no acceptions made for any incidents.

10. Continuous Improvement

In the article “Top Ten Ways to Prevent Employee Theft”, Tracy Coenen writes that “management should be constantly looking for ways to improve policies and procedures. Fraud prevention is an ongoing, dynamic process that requires continuous evaluation and improvement.” Stay current on changes made to financial and accounting laws and regulations- train employees and notify them of the changes so that they are aware of the update.

Develop a training schedule in order to train new employees, as well as provide training to present employees, to continue demonstrating your commitment to an honest, open workplace. Communicate regularly with employees and stick to audit plans- if you make changes, cancel or cutback on any of the established control measures, employees will notice and it could begin to seem that you have lost your focus regarding the prevention of workplace theft and fraud.

Chances are, if you know you are going to get caught, you won’t do it. At the same time, employees need a clear outline as to what is acceptable and what isn’t, so they can refrain from activities that are not allowed at work. In some cases, it’s necessary for managers to assume the “Big Brother” role within their organization in the fight against fraud. When employees know someone is holding them responsible for their actions and that there are consequences, you will notice a difference in the decisions they make.

Here are some tips to integrate into your workplace to help prevent internal theft and fraud:

1. Smart Hiring

Sherrie Bennett wrote this article on lawyers.com, recommending businesses to follow through with background checks of potential job candidates. Conduct police reports, reference checks and personality testing. Ask previous employers about any reasons for concern regarding the candidate. Make sure that you are hiring the candidate that is the right fit for your company and demonstrates a clean history.

2. Training and Education

Internally, it’s usually your employees who are aware of fraudulent actions or theft taking place while at work. Remain upfront with employees. Train them on company policies regarding fraud and theft and make them aware of the consequences they face should they commit such acts. Give employees the proper tools and techniques to report an incident. It’s also important to let employees know the risk that theft and fraud place on a company. This article by fraud examiner Larry Cook also suggests that you should have employees sign a terms of agreement form to acknowledge that they have been given and understand the information presented.

Share with employees the effects of fraud and theft, and that even the smallest acts can lead to large consequences. Your company name is riding on the backs of your employees- they are your ambassadors, let them know that.

3. Establish a Reporting System/ Hotline

As mentioned above, employees are your number one resource for fraud detection. As time goes on, it has been recognized that employees are speaking up more frequently when they detect suspicious acts at work. This article by forensic accountant/ fraud examiner Tracy Coenen, suggests the implementation of hotlines because “the ability for anonymous reporting of fraud encourages employees to look out for the best interests of the company, without fear of reprisal.” i-Sight Investigation Software is a great system that is easy to use and allows you to track these tips as they come in and keeps all details in one place as you carry out your investigation.

4. Positive Work Environment

Develop a mutual respect between employer and employees. This article by Tracy Coenen encourages managers to establish an open door policy. The physical act of leaving your office door open during times where you are able to meet with employees makes it much easier for employees to communicate with you. Give employees time to speak with you and don’t play favourites.

This article by Larry Cook states that “a positive work environment encourages employees to follow established policies and procedures, and act in the best interests of the organization. Fair employment practices, written job descriptions, clear organizational structure, comprehensive policies and procedures, open lines of communication between management and employees, and positive employee recognition will all help reduce the likelihood of internal fraud and theft.”

5. Internal Security Policies

Establish and assess the fraud and theft prevention tools that you have put in place. Make sure that you are meeting laws and regulations, accurately documenting expenses and accounting documents and make sure to stay on top of anti-theft and fraud training. Make sure that employees are following policies, address any questions or concerns that they encounter with the policies and update policies as time goes on to ensure compliance with changing laws and regulations.

In this article by Larry Cook, he lists three types of controls to put in place:

In one of our previous posts, “Complainant Investigation Interview Questions“, we reviewed how to initiate the internal investigation interview process and outlined important questions to ask the complainant. When you conduct your own investigation interviews, you will also need to interview the subject (the one accused of committing the incident) and any witnesses.

The EEOC created a list of questions to ask during the subject and witness interviews. Depending on the type of incident being investigated and the allegations made by the complainant, other questions that contain greater detail and are more case specific will need to be addressed.

Interviewing the Subject:

In most cases, the subject will be interviewed after the complainant has already been questioned. It’s natural for a person who has been accused of misconduct to behave in a defensive manner. When interviewing the subject, you will need to make sure that the investigator assures due process to the subject.

The investigator should be careful not to convey the impression that they are out to get the accused or have predetermined the subject’s guilt.  At the same time, the investigator should make it clear that the company takes the complaint seriously and intends to conduct a thorough, impartial investigation. The subject should also be reminded that the company has a legal obligation to investigate.

This is the perfect time to reiterate any corporate rules, zero tolerance mandates, and to advise that if found to have committed the reported offense, the subject can face discipline up to and including immediate termination.

Mandatory questions to ask the subject, as outlined by the EEOC in this report, consist of the following:

• What is your response to the allegations?
• If the harasser claims that the allegations are false, ask why the complainant might lie.
• Are there any persons who have relevant information?
• Are there any notes, physical evidence, or other documentation regarding the incident(s)?
• Do you know of any other relevant information?

Interviewing Witnesses:

After meeting with the complainant and the subject, the investigator is usually faced with a “he said/she said” situation. The truth often lies somewhere in between, and other witnesses are integral sources of information to balance the facts. Interviewing witnesses is similar to interviewing the complainant and accused. Consider carefully what the purpose of the meeting with each witness is and tailor the interview and the questions asked to that purpose- you will also want to limit the information revealed about the situation to the greatest extent possible.

Mandatory questions to ask witnesses, as outlined by the EEOC in this report, consist of the following:

• What did you see or hear?
• When did this occur?
• Describe the alleged harasser’s behavior toward the complainant and toward others in the workplace.
• What did the complainant tell you? When did they tell you this?
• Do you know of any other relevant information?
• Are there other persons who have relevant information?

i-Sight Investigation Software

i-Sight uses an electronic case file to store all case related information – including interview notes and witness statements.  Investigators can quickly add new contacts to the case file – subjects, complainants and others.  Once the contact exists in the case file the investigators can quickly add notes or attach files - many i-Sight customers will attach witness statements, or audio/video interviews.  As the investigations proceeds all the case related information is  captured and stored for reporting purposes.

Any errors, even the smallest of ones, can ruin your entire workplace investigation. Internal investigations are necessary, regardless of the size of business you operate. We have provided you with “8 Internal Investigation Tips” in one of our previous posts, and today we wanted to list some of the common workplace investigation mistakes that you will want to avoid. The articles “Five Common Mistakes in Internal Investigations” by Tim Mohr and Nidhi Rao and “The Top 5 Pitfalls to Avoid When Conducting Workplace Investigations” by Julie A. Vogelzang have helped us shape our list of the most common workplace investigation mistakes.

Mistake #1: No Reporting System

Employees need to know the process for making a complaint and investigators need to know the company policies on handling complaints, as well as whom to report to. Once a complaint is made, employers are obligated in investigate the claim, but if there is no system in place regarding what to do next, how can any investigation run smoothly?

Majority of the time, human resources conduct the investigation process (individually or in teams) and provide a report of findings to management to decide on the appropriate action to be taken and how to implement it. To conduct a proper investigation, establish clear lines of communication, roles for each team member and an outline of that they are responsible for. A reporting system makes it easier to assign cases, check the progress of each investigation and ensure that no case gets left behind.

Mistake #2: Waiting…

When a complaint is made, it needs to be investigated immediately- waiting will not make it go away. If you leave the complaint, chances are, it will grow to be a larger issue and will have a higher probability of ending up in court. It’s also important to note that employers are responsible for demonstrating a prompt response to all complaints made. The solution to avoiding this mistake is simple- don’t wait!

Mistake #3: Improper Evidence Collection and Analysis

Once an investigation starts, you want to make sure that the subject doesn’t have access to any of the evidence supporting the case. If they do, they could destroy it or modify it, making it irrelevant. Tim Mohr and Nidhi Rao also recommend abiding by company policy when collecting evidence in order to avoid potential accusations. Tim Mohr and Nidhi Rao also suggest the following from their article during this phase of the investigation:

Preservation Order: Firstly, determine which documents may be relevant during the investigation. Depending on the scope of the investigation, an organization may need to issue a document preservation order. If an organization neglects to issue a preservation order in a timely manner, a possibility exists that pertinent information and evidence may be destroyed.

Collection of Evidence: A crucial component of evidence gathering is ensuring that the chain of custody is documented. This documentation should include a description of how the information was obtained, when it was collected, who has handled it, where and how it was transported, and where it’s stored and maintained. Improper documentation of the chain of custody during the collection process may result in information becoming inadmissible in court.

Mistake #4: Poor Team Member Selection

Ensure that the investigation team is comprised of individuals that do not have any connection to the situation or the people involved in the incident. This helps to eliminate any bias during the process. It’s also important to assign investigators to cases that they can handle. You want to assign experienced investigators to complex cases, and smaller cases to those who are starting out. If the investigation is conducted by those connected to the incident, their personal opinion will get in the way of the case. Also, they could fall victim to retaliation from others in the workplace based on the outcome of the investigation.

You might also benefit from adding professionals from outside of the organization to your investigative team to ensure that the investigation is conducted properly.

Mistake #5: Poor Interviewing

Investigation interviews are crucial to the success of the investigation. In the article “Five Common Mistakes in Internal Investigations“, they focus on the importance of interviews during the investigation process:

“Interviews are the greatest source of information for any investigation. Interviewers must be experienced, as inexperienced investigators may act in a combative or unknowledgeable manner that serves no purpose. Investigators should review applicable evidence and interview individuals who may have knowledge related to the allegation prior to interviewing the suspect. This will assist the investigators in asking pertinent questions when they interview the subject and allow them to refer to relevant and potentially incriminating documents during the interview. It is recommended that two investigators be present during an interview so that one can act as a witness and be responsible for documenting the findings from the interview. The investigative team should also ensure that interview notes are documented in writing, are sufficiently detailed and capture the relevant content of the conversation.”

Mistake #6: Complainant Punishment

The complainant already feels violated or stressed about their workplace situation, don’t make it worse by removing them from their position and placing them in a different department. Try to make it “business as usual” to the greatest extent for the complainant, punishments go to the subject.

Mistake #7: Ineffective Conclusions

Make sure the punishment fits the crime. To ensure that the incident does not happen again, properly train the subject to correct their action and explain to them why they are being reprimanded the way they are. Inform them that you enforce your policies and those who choose not to abide by them will face the consequences. Not all cases are the same, therefore, solutions should be concluded on a case by case basis.