While the previous post included some interesting statistics, it also highlighted some key issues your organisation may be faced with in relation to how to deal with and manage the fraud once it has been detected.

Once you suspect has fraud has occurred then it is important to undertake a confidential investigation to determine whether there is evidence that fraud has actually occurred. Ensure you obtain key documents, computer records and files that may include, for example, receipts, transaction records, bank statements, contracts, reports or emails.

If, upon this initial investigation, there is strong evidence fraud has occurred then it must be referred to the police.

There are two main reasons for this.

The first reason is that you are in effect seeking independent advice in relation to the issue.  If the fraud is of a material nature then the police will take further action which is also independent of the organisation as the investigation is at arm’s length and takes away the responsibility of the board, management or other staff to be directly involved.

The second reason is that the police may deem the issue to not be material and advise that you deal with the matter internally.  This may be due to the belief there was an honest mistake or maybe poor judgement.  Under these circumstances it may be decided to commence formal disciplinary action that could result in significant changes to the person’s role or responsibility or even dismissal.

Once the fraud has been reported to police it is also imperative to secure the key documents, computer records and files so the person under investigation cannot access, change or destroy them.