We May Have a Fraud Issue. Now What?

Business man wearing gloves and using computer - fraud conceptBy Vicki Pero, SPHR

When the term “audit” is used in the parking industry, it covers three functional areas: loss prevention, fraud investigation, and location (internal) audit. The fraud investigation component sometimes presents a challenge because many organizations don’t have a documented process defining roles and responsibilities. Establishing a process all employees follow in these situations can save your organization time and money.

The first step is to put someone in charge. Common roles that take on this responsibility include the head of audit, HR, or a combination of those. Without this, every manager is likely to handle these investigations on her own, resulting in lost time, inadequate documentation collection, and loss of quality control. This can also jeopardize investigation independence, leading to more problems down the road if employees dispute the investigation’s conclusion.

Next, establish policy and procedure. Without a fraud investigation policy and procedure, each time an issue arises feels like the first time. Valuable time can be lost while employees determine an appropriate course of action. In addition, the rights of employees may be violated depending on how the investigation is conducted which can result in payment of lost wages during a suspension or due to a termination where reinstatement is required.

Communicate the policy and procedure to all employees within the organization and ensure everyone has easy access to it by posting it on a company intranet or other location. Provide training support that correlates to employee responsibilities.

Next-level: Establish a fraud hotline where employees can anonymously report fraud concerns and other policy and procedure violations. This can be a 1-800 number, online portal, or both. The key to a hotline’s success is ongoing communication regarding its existence from the top down and program that truly offers anonymity with an established protocol to respond accordingly.

Fraud is a potential reality for all companies. Making sure your company has a plan to deal with it when it arises will set you apart from the competition and help you avoid lost time and money.

Vicki Pero, SPHR, is a principal with The Marlyn Group.

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