“Always on Duty,” by Kevin M. Alvero, CFE (Fraud Magazine January/February 2020), discusses key traits that make whistleblower hotlines effective for fraud prevention. Importantly, whistleblower hotlines provide an anonymous method for concerned personnel to report suspicions. This is a game changer for those who wish to speak out against unethical practices but fear retaliation. Thus, whistleblower hotlines are a key tool for ending unethical practices and promoting transparency in the workplace.
“Always on Duty” cites statistics from the ACFE that found fraud losses to be 50% smaller in organizations that use whistleblower hotlines. Furthermore, the ACFE reported that tips were the number one initial step for uncovering fraud in 2018. The relatively small cost of accessing whistleblower hotline services can easily save an organization from great financial loss.
For a hotline to be effective, all individuals with access must be properly informed and trained according to their roles. Designated case managers and senior leaders must be familiar with all the Hotline’s functions and best practices for handling reports. The hotline must be well advertised to employees. Advertising to external parties, such as vendors who have the potential to uncover cases of unethical behavior, can also be essential. Everyone should understand the intended purpose of the hotline as well as any concerns that should be handled through alternative methods, for example, emergency situations.
All employees and relevant external parties should understand the process that occurs once a report is filed, such as who reports are routed to. It is important for all individuals to understand the level of anonymity that will be honored. Some effective hotlines, such as Red Flag Reporting, allow whistleblowers to choose their desired level of anonymity. In fact, these services allow whistleblowers to anonymously provide further important details to their report and to monitor progress as their report is being processed and resolved. “Always on Duty” explains that hotlines are more effective when reporters can count on timely and appropriate responses to their concerns.
Finally, “Always on Duty” discusses critical case management practices that help boost the effectiveness of hotlines. It is important to remember that independent reports can serve as clues to a larger, underlying problem. Case management systems, which are provided by some whistleblowing hotlines such as Red Flag Reporting, gather data and trends, all while maintaining whistleblower confidentiality. This allows investigators to not only solve individual cases, but to find root causes and suggest preventative measures. Employing a whistleblower hotline and case management system with the above characteristics is an excellent way to protect your organization.