Consulting and Solutions
Fraud Prevention and Risk Management Solutions
Perhaps your organization has been a victim of fraud. You might have a regulatory requirement to implement anti-fraud measures. Maybe you believe in the value of a strong governance program. You may be considering a transaction with an unknown party and require background research as part of your due diligence regime.
Whether your concerns are enterprise wide, or related to a specific process,we can help. We have helped organizations of various sizes in the private, public and not-for-profit sectors protect themselves against fraud and wrongdoing through our fraud risk mitigation services.
If you are a representative of a Canadian Federal Government Department, click here to learn about how we work with the Federal Public Service.
A government ministry wanted to strengthen its fraud awareness regime, but didn’t know where to start. We were retained by the department to help and in partnership with them we developed a program that was both effective and tailored to that ministry’s operational environment.
We started by reviewing the ministry’s internal files to properly identify the biggest gaps that were previously discovered. We also spoke with individuals within the organization that had a deep knowledge of its various lines of business and fraud risk exposures.
We then did an environmental scan of other public sector agencies that had similar problems. From this, we asked key questions about the risks they faced, how they mitigated against them and what circumstances led them to become victimized.
As a result of the work, we identified the fraud risks that the client was facing and helped them prioritize their risks from business line to business line.
Step two was to address some of the largest risks we identified on an enterprise level. One of which was fraud risk awareness. We developed train-the-trainer materials for their staff to deliver fraud awareness training to departmental staff in the regions. It was a cost-effective approach to mitigating the fraud awareness risk.
Awareness in the C-Suite
The head of an internal audit realized that they needed to get executive buy-in, in order to have the organization make changes to the way they approach fraud risk.
We consulted with the audit staff, finance and corporate counsel to develop an awareness session for the organization’s senior management. We delivered the session, and as a result issues were identified with payment processing. A discussion ensued about the department’s major fraud risks and ultimately new initiatives were undertaken to properly address those risks.
The Charity’s Challenge
Not-for-profit organizations have great challenges and often very little resources to address them. As stewards of their donors’ money, the reputational risk they face if fraud or malfeasance takes place is very high.
We were retained by a religious organization to examine their current expenditure policies. We found the board did not have sufficient financial literacy and they had a deeper concern towards the origin of the money, rather than how it was spent. This meant that the charity allowed their executive director to write cheques to a company he was related to.
We worked with them to change policies and procedures and to close the gap.
Not-for-profits are unique environments and often the culture of these organizations is one of the major draws to attracting and retaining talent; however, the lessons of corporate governance and fraud risk management apply to the not-for-profit sector as much as to any private business. There are certainly approaches that can be taken to helping charities practice good governance,all while maintaining their important organizational culture.
In a survey conducted by the Association of Certified Fraud Examiners, over 40% of all fraud was discovered by a tip. What’s more important, employees accounted for almost half of the tips that led to the discovery.
Guaranteed high returns with no risk; offshore investment tax schemes, investment opportunities that are exclusive and are referred by family or friends; the promise of access to exclusive, insider information; and high pressure tactics are all known red flags for investor fraud according to the Canadian Securities Administrators.
A robust Fraud Policy and Code of Conduct; a comprehensive fraud control plan; prudent employee, and third party, due diligence; regular fraud awareness training; and fraud-related controls for activities with a high fraud risk exposure are among numerous factors identified by The Australian National Audit Office for fraud control in government entities.