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skills training

Fraud Prevention Tip #32: Provide ‘How-to’ Anti-Fraud Skills Training

All right. Buckle your seat belts. Here’s the single most important thing you need to do to fight fraud.

Teach every employee, supervisor, manager, executive and
board member the skills they need to fight fraud.

So simple. So ‘common sense’.

Yet as my business results coach continually reminds me – too often common sense is not common practice in business.

Let me give you some interesting statistics. Several years ago I was instructing a skills training Webinar covering fraud prevention and detection. With over 1,400 people on the line from just about every time zone in the world, I asked the following question:

“The following four actions are part of an effective Anti-Fraud Campaign. But if you could only choose one, which one would have the greatest impact?”

Here were the choices:

1. Implement a Policy on Fraud Responsibilities

2. Conduct an organization-wide Comprehensive Fraud Exposure Analysis

3. Provide awareness, prevention and early detection Skills Training for managers and staff

4. Catch and Prosecute Wrongdoers

Which option would you pick? Remember, you only get one choice.

Well, through the wonders of modern Internet technology, each participant in the Webinar was able to vote using their keyboard. We had their responses compiled in seconds. And the winner was:

Skills Training for Managers and Staff

This option got 62% of the votes. That’s almost two-thirds of the anti-fraud experts on the Webinar screaming loud and clear that teaching anti-fraud skills is the

Fraud Issues & Answers for Managers and Key Control Employees

Fraud Issues & Answers for Managers and Key Control Employees

Organization leaders who are serious about managing the risks of wrongdoing, misconduct and fraud are waking up to the fact that most supervisors and employees simply lack the necessary skills. This ‘how to’ program fills in that gap – it shows participants exactly what to do to manage the fraud risks in their areas of responsibility. In this interactive workshop, executives, managers, supervisors and employees will learn the specific steps to take to prevent wrongdoing as part of their daily duties. And when prevention efforts occasionally fail, they’ll find issues faster and handle them more effectively.

single most important action organizations can take to manage fraud risks. Nothing else even comes close.

And here’s where simple common sense falls apart. Ever since that Webinar I’ve been asking the participants at my live programs if their organization provides the skills training needed to fight fraud. Not just ‘awareness’ sessions – real, useful, meaningful, day-to-day skills training. Result: less than 5% have ever raised their hands in response. And I’ve probably asked 20,000 or more in just the last two or three years.

5%. One in 20 employees who feel they know how to manage fraud.

Yikes! No wonder fraud is exploding in business.

How would your employees respond to this question?

Don’t expect team members to be able to handle their fraud risks if they’ve never been taught how to do so. Sponsor or conduct skills training programs specifically addressing what your team members need to know to prevent, detect and handle fraud.

Meaningful skills-based anti-fraud training is what we do. It’s our core business.

Let us know if we can help you.

John J. Hall, CPA

John J. Hall, CPA

John J. Hall, CPA, is an author, speaker and results expert who presents around the world at conventions, corporate meetings and association events. Throughout his 35-year career as a business consultant, corporate executive and professional speaker, John has helped organizations and individuals achieve measurable results. He inspires audience members in corporations, not-for-profit organizations and professional associations to step up, take action and “do what you can.”

 

 

scam fraud prevention

Fraud Prevention Tip #31: How to Support Employee Anti-Fraud Behaviors

Cheryl asked me for ideas on what she could do as a manager to support her staff’s anti-fraud behaviors. Here’s the quick list we developed. Think about how these suggestions might apply in your own work.

Pride

First and foremost, supervisors and employees must have a true sense of pride in their work. They must feel that what they do each day is important, that it adds

pride

“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything – all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important.” ~ Steve Jobs

value to the organization and to those the organization serves. Pride in doing things well, to the best of an individual’s ability is the foundation of any business risk model, including effectively managing fraud risks. Every day, supervisors at all levels must reinforce the importance of the work and each employee’s role. Instilling and supporting a sense of pride in work quality is critical in managing fraud exposures.

Skills

Second, make sure all staff know how to do their job through meaningful skills training and one-on-one coaching. Not mentoring – skills coaching. Few employees, managers or executives come to the organization with deep knowledge of fraud prevention. And most organizations do a horrible job of filling the gap. How can your staff prevent and promptly detect wrongdoing if they don’t know how to do it? Managers must teach their staff exactly what wrongdoing and fraud looks like in the transactions and activities they see every day. It’s so simple. Everyone must know what can go wrong and how to respond. And it’s every manager’s job to make sure that happens.

Attitude

Third, encourage every employee to think like an owner when reviewing and approving transactions. If each employee thought, “What if this was my money we’re spending here?” they would be much more likely to react to the strange, odd and curious in what they see – before putting their good name on the document.

Openly encourage an attitude of “Fraud? Not on my watch!” Attitude is important. When managers are able to blend pride, skills and attitude, fraud gets pushed out the door. Those intent on committing wrongdoing will look at an employee group that is motivated to fight this problem and realize, “These folks aren’t messing around. If I try it here, I’ll get caught right away.”

I’ve always believed we should hire for attitude and train for skills. What is the attitude of your team when it comes to fighting fraud? Are they motivated, proud and skilled? If not, get them there fast. Or you’ll be an easy target for those looking to commit wrongdoing and fraud. Let us know if we can help.

John J. Hall, CPA

John J. Hall, CPA

John J. Hall, CPA, is an author, speaker and results expert who presents around the world at conventions, corporate meetings and association events. Throughout his 35-year career as a business consultant, corporate executive and professional speaker, John has helped organizations and individuals achieve measurable results. He inspires audience members in corporations, not-for-profit organizations and professional associations to step up, take action and “do what you can.”

 

 

Create an Anti-Fraud Presentation for Delivery by Every Supervisor

Fraud Prevention Tip #30: Create an Anti-Fraud Presentation for Delivery by Every Supervisor

Create an Anti-Fraud Presentation for Delivery by Every Supervisor

Auditors are expected to master many skills – including communications, data testing, cause diagnosis, and motivation. But are these expectations reasonable? Is it fair to assume that every internal auditor should be a master at surfacing hidden problems and unexplored opportunities? And when issues are identified, is it really the auditor’s job to convince managers to act? Unfortunately for many auditors who are unprepared, most executives believe that the answer to these questions is a resounding “Yes!” This seminar teaches participants how to enhance the likelihood that the real cause of issues is identified – while dramatically increasing the probability that the management team will take corrective action.

Help every supervisor train their team by giving them the “train-the-trainer” tools they will need to successfully share the anti-fraud message with their subordinates. Presentation aids should include: suggested agenda, the CEO call-to-action video, supervisor talking points, presentation slides (PowerPoint or similar with talking points for each), and relevant handout materials (brainstorming guides, Hotline materials, how-to articles).

Here’s an example agenda to get you started:

• What do we mean by wrongdoing and fraud (tailored to the organization’s fraud exposures – not necessarily a legal definition)
• Who commits fraud and why they do it
• Our new Policy on Fraud Responsibilities (positive, inclusive call to action)
• Relevant example of risks in our department (theft, results reporting, shadow deals)
• Brief risk brainstorming group exercise (with handout)
• Reporting options (include Hotline: how it works and who answers the calls)
• Expectations in our work group (distribute supervisor’s tailored Expectations)
• Frequently asked questions and guidance on suggested answers
• Open discussion
• Call to Action and Next Steps

Help supervisors spread the news and recruit their team into your Anti-Fraud Campaign. Make it easy for them to lead a discussion. Give them the tools or offer to come out and present with them.

John J. Hall, CPA

John J. Hall, CPA

John J. Hall, CPA, is an author, speaker and results expert who presents around the world at conventions, corporate meetings and association events. Throughout his 35-year career as a business consultant, corporate executive and professional speaker, John has helped organizations and individuals achieve measurable results. He inspires audience members in corporations, not-for-profit organizations and professional associations to step up, take action and “do what you can.”

 

 

Countering Risks from Third-Party Relationships

Fraud Prevention Tip #29: Countering Risks from Third-Party Relationships

One risk area of special concern comes from relationships with third parties. Here’s why.

Your organization’s relationship with employees is governed by law, policy, and operating procedures. There exists a daily ability to supervise, monitor, reward, and discipline individuals. Information needed for these tasks is available with few barriers. Employees generally share the organization’s ethical standards. Deviation in individual behavior from those standards is often detectable.

Your organization’s relationship with third parties is determined in large part by the documents governing the relationship. Examples include contracts, purchase orders, engagement letters, loans, leases, sales agreements, standard terms and conditions, and other documents. Third parties have legitimate business interests that may at times be at odds with those of their customers and clients. If wrongdoing by third parties is suspected, it may be difficult or impossible to obtain records needed to prove or disprove the suspicion.

Suspected fraud by those third parties with a trust relationship can be extremely challenging to pursue. Be as prepared as possible for these challenges. Make sure that the document that defines the relationship is clear on matters of fraud and other wrongdoing.

Countering Risks from Third-Party Relationships

Managing Fraud Risks in Procurement and Contracting – This program addresses the fraud risks inherent in procurement and contracting, and will present solutions for managers and auditors interested in guarding their organizations against the costs and other negative consequences of misconduct and fraud.

Where appropriate, make your organization’s Code of Conduct an integral part of any third-party relationship documents. Consider having the third party acknowledge their awareness and compliance with your Conduct standards.

Also include appropriate Right to Audit language in third party ‘deal documents’ – again, where appropriate to do so. We recommend strong Right to Audit language in:

  • Requests for Proposals
  • Contracts (including the requirement for your Right to Audit be included in any sub-contacts or suppliers to the contract)
  • Purchase Orders
  • Engagement Letters with your professional service providers
  • Any leases you sign as lessor where there is a cost pass through provision
  • Standard Terms and Conditions

One last thing. Don’t just have Right to Audit provisions. Perform detailed audits of third parties performed by subject matter experts. If you’re not quite sure where to start, reach back to me. I’ll walk you through it.

John J. Hall, CPA

John J. Hall, CPA

John J. Hall, CPA, is an author, speaker and results expert who presents around the world at conventions, corporate meetings and association events. Throughout his 35-year career as a business consultant, corporate executive and professional speaker, John has helped organizations and individuals achieve measurable results. He inspires audience members in corporations, not-for-profit organizations and professional associations to step up, take action and “do what you can.”

 

 

criminal background checks

Fraud Prevention Tip #28: Seven Tips for Small Business, Small Government and Not for Profits

Fraud Issues & Answers for Not-for-Profit Organizations

Fraud Issues & Answers for Not-for-Profit Organizations
The not-for-profit business environment has many unique fraud risks – including fund raising pressures, proper use of donated funds and government grants, the need to report positive program results, and plain old theft and abuse. The need to balance a mission focus, public scrutiny, inherent trust, and limited staffing all combine to create exposures to wrongdoing that demand vigilance. As a result, many not-for-profit Board members, managers and staff are finding they simply don’t have the skills (or time!) necessary to fulfill these responsibilities. Leaders are waking up to this shortfall in skills and teaching everyone what they need to know to handle fraud challenges. This program does just that – shows participants how to manage their fraud risks in the not-for-profit business environment.

Smaller organizations and many not-for-profits face the inherent risk of insufficient staff and limited control resources. These special challenges require special effort by anti-fraud leaders. Here are seven ideas that will help.

1. Create a written Code of Conduct that addresses routine and non-routine situations staff will encounter in performing their work. Provide examples, short cases and answers to Frequently Asked Questions. Be wary of boilerplate terminology. Focus instead on meaningful real-world guidance for conduct.

2. Due to limitations in staffing and inadequate segregation of duties controls, managers should compensate by spot checking and re-performing the work of subordinates. Make this ‘quality check’ a daily habit.

3. Require that approvers carefully review all disbursement documentation prior to approval. Verify details, ask questions, and when in doubt, choose to doubt and follow up until a valid verifiable conclusion is reached.

4. Have bank account and credit card statements sent unopened directly to the chief executive. This executive should review all statements in detail as soon as they are received.

5. Verify the existence and legitimacy of all first-time payment recipients.

6. Make everyone take uninterrupted vacations or other time away from their jobs. Have other staff fill in for them and complete their work while they are away.

7. You simply must perform meaningful criminal background checks on employees and many volunteers. There’s no easy way around this one. Those terminated for cheating at past employers know they need a new job right now. No delay. And prime targets for new jobs for these folks are the smaller business, governmental entity or not-for-profit that everyone knows has limited resources and staff to check backgrounds.

Comply with the privacy, anti-discrimination and other applicable laws. Get competent legal advice and find a way to get these reviews done! (see Consideration of Arrest and Conviction Records in Employment Decisions for one source of guidance)

John J. Hall, CPA

John J. Hall, CPA

John J. Hall, CPA, is an author, speaker and results expert who presents around the world at conventions, corporate meetings and association events. Throughout his 35-year career as a business consultant, corporate executive and professional speaker, John has helped organizations and individuals achieve measurable results. He inspires audience members in corporations, not-for-profit organizations and professional associations to step up, take action and “do what you can.”

 

 

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