How Effective and Efficient is Your Process?
In-house investigation teams are expected to be agile to be able to help organizations in addressing cases that come from whistleblowing channels and sustaining the ethical standards of the organization. By supporting your investigation teams with measures to assess effectiveness and efficiency you can help make the teams more agile and enable them to deliver better results.
The efforts of in-house investigation teams are integral to upholding organizations’ ethics and compliance. These teams must navigate through mazes of evidence to uncover violations and take appropriate disciplinary actions. With more cases, evolving case trends and increased expectations of senior management and boards of directors, investigation processes need to be dynamic, effective and efficient. However, unlike other processes, measuring effectiveness or efficiency in this process can be difficult.
Measuring effectiveness means assessing whether the efforts of the investigation team result in visible changes in the ethics environment or types of cases it sees. Measuring efficiency means assessing how long it takes to close the case and recover from fraud losses.
Organizations can use these tips to evaluate the effectiveness and efficiency of their in-house investigation processes:
1. Monitor Case Trends Within the Organization
Case trends remain the key point to observe and understand the impact of efforts taken by the investigation teams. They are also a clear reflection of whether disciplinary actions and recommendations arising from investigations are resulting in trend changes for those cases.
Here are some steps for analysing cases:
- Observe the pattern of case types (financial misreporting, bribery and corruption, harassment, etc.) and case categories (sexual harassment, incorrect order booking resulting in financial misreporting, etc.).
- Review the changes in trends (decreases in sexual harassment cases, increases in bribery cases, etc.) in specific regions or segments that indicate patterns.
- Eliminate patterns caused by known case type trends (for example, there may be a rise in concerns on harassment by managers around performance management cycle).
- Understand the trends of disciplinary actions taken on misconduct.
2. Measure the Timelines of Case Closure
While the in-house investigation team monitors timelines for closure of cases, they don’t always measure the specific factors affecting those timelines. For example, a timeline might be delayed because an investigator has a large caseload or has difficulty connecting with whistleblowers.
Also consider these actions:
- Review overall timelines of case closures and case types and observe how they changed for investigators.
- Monitor the number of investigator caseloads to avoid extended timelines.
- Analyze lead times for allocating cases to investigators, for contacting whistleblowers and for investigation follow-up after the case closes.
3. Review the Process of Handling Whistleblower Concerns to Improve Efficiency
Certain case types are high volume based on the industry. For instance, the concerns around corruption may be higher for an infrastructure firm than other concerns, as the industry works with various third parties. Sometimes standardizing the kind of key evidences required to close the case helps in enhancing efficiency. Also, skill-based case allocation could help in efficiency. For instance, in many organizations, investigations are handled by professionals from varied backgrounds. Involving people with relevant backgrounds aid significantly in the process (e.g., using professionals with a background in human resources for cases involving recruitment or using people with a background in supply chain for inventory / transportation fraud). A conscious approach in allocating the cases based on the skills / professional background of the investigators can contribute to efficiency.
4. Gather Whistleblower Feedback
Try to include whistleblowers in entire investigations. If they’re willing, they can become ethics champions / ambassadors.
- Seek feedback from whistleblowers on overall investigation processes for substantiated cases.
- Reach out to whistleblowers a few months following investigations to evaluate improvements in the processes of handling whistleblowers, including issues around timely communication to them.
5. Measure Trends of Actions on the Basis of the Concern Received
Disciplinary actions and policy / process changes help to set the tone of your organization’s internal controls review and address systemic vulnerabilities. Delays, lapses or ineffective action might create more damage to the organization.
- Observe trends of disciplinary actions recommended, such as written warnings or counselling.
- Monitor how long it takes to implement disciplinary actions.
- Besides disciplinary actions by the committee or the board, there are inputs provided by the investigators to the business. These inputs are intended to guide the business to look again at their business process / internal controls. A periodic interaction with the stakeholders on the changing case trends not only helps the stakeholders in determining ways to strengthen internal controls, but also in avoiding ethics deviations at early stages.
6. Measure the Effectiveness of Insurance Claims Management for Fraud Losses
Organizations are increasingly using insurance claims to compensate for fraud losses. However, the conditions and coverage of insurance policies vary and require constant revisiting to receive benefits. Consider these steps to enhance the effectiveness of the claims management process:
- Observe the trends of claims against case types.
- Understand policy conditions and opportunities for inclusion or negotiation for revision.
- Review how long it takes to initiate and submit a quantification and receive claim approval.
7. Conduct Benchmarking Studies on Your Investigation Processes
In-house investigation processes don’t have one-size-fits-all mechanisms. However, other companies / organizations’ methods can help improve your approaches to handling concerns and disciplining employees.
Consider these actions when you’re devising your benchmarks (be careful to protect information that is private and confidential to your organization when adopting these actions):
- Understand the process of closing concerns: reporting to ethics and/or compliance committees with recommendations, communicating disciplinary actions to stakeholders, etc.
- Review investigators’ skill sets, tenure with the organization and seniority.
- Record what worked best so you can use those practices in future cases.
Be Shrewd in Your Planning
You want to continually improve your in-house investigation mechanisms, resources and technology, so of course you need to measure their effectiveness and efficiency. By measuring, the organisation aims at preventing fraud losses and reducing the cost of in-house investigations. Use these tips to help ensure your organization is astutely perceptive in its efforts to prevent and detect fraud.