Is your whistleblower program effective against COVID-19 risk?

Working remotely has become the norm due to the disruptions caused by COVID-19. Organisations need to refocus their whistleblower policies in light of staff working from home en masse for the first time ever.

Working from home raises the threat level of many business risks including workplace fraud and corruption. It is natural for people to have a more relaxed approach when working remotely which may impact how closely operational procedures are followed. The physical presence of supervisory and management personnel who would normally make detailed person-to-person enquiry about proposed or processed transactions is completely absent. Unusual behaviours that would normally trigger misconduct concerns are more difficult to observe and anyone observing the behaviours may find it more difficult to raise their suspicions.

Add into the mix employees who are financially distressed and may rationalise workplace fraud or corruption on the basis that they are only ‘borrowing’ the funds to get them through a tough period, and it is easy to see that fraud and corruption cases are sure to rise during the current pandemic. Incidents that are likely to increase include:

  • Insecure handling of commercially sensitive information;
  • Short-cutting procurement procedures with a consequent fraud and corruption risk;
  • Manipulation of supplier bank account details by external scammers;
  • Falsification of financial reporting to make it appear that targets are being met;
  • Bribery initiated by suppliers desperate for work in a depressed market including unjustifiable contract variations;
  • Staff removing commercially sensitive information immediately prior to termination; and
  • Fraudulent claims for workplace injury in anticipation of redundancy.

Organisations need to look carefully at their whistleblower policy to ensure it is relevant to the changed working arrangements. It is more important than ever for organisations to encourage their workforce to come forward with reports of wrongdoing – the organisation may have only one chance to identify a major fraud or corruption incident and experience shows the report is often received from a member of the organisation’s own workforce who works closely with the perpetrator.

A robust whistleblower program will help Australian businesses ensure they come out of the COVID-19 in as good a shape as they went in. We recommend that organisations:
Regularly communicate the organisation’s whistleblower policy reminding the workforce of the range of internal and external reporting channels;

  • Confirm the operational readiness of reporting channels;
  • Make a declaration that the workforce continues to be afforded protection if they make a disclosure even if they wish to remain anonymous;
  • Implement a program of regular one-on-one check-in meetings, preferably by video link, so that staff can raise integrity concerns informally; and
  • Refresh the organisation’s whistleblower policy to make specific mention of the COVID-19 outbreak and changes in current remote working arrangements.

Since the introduction of Australia’s Whistleblowing legislation we have seen an increase in reported incidents and have assisted clients manage these sensitive and confidential matters.

AUTHORED BY

Ben Cheah

Ben Cheah
Manager, Melbourne
T: +61 3 9038 3106
E: bcheah