Numerous organizations simply check the box when it comes to implementing a hotline without focusing on the hotline’s effectiveness. This can be even more detrimental to the culture of an organization than not having a hotline at all. An effective hotline can bring your organization tips that can help your organization identify and mitigate fraud.
This blog post will cover the five “A”s to make sure your hotline stays HOT.
- Awareness – First, people must be aware of the hotline’s existence. Spend a little time branding or marketing the hotline. Display posters in high traffic areas in all office locations, provide hotline information on customer invoices and purchase orders sent to vendors, and include it in all employee email signatures.
- Alternatives – Providing options is important for a hotline to be effective. With regard to cases discovered through tips that were analyzed by the ACFE, almost 40% of the tips received were by telephone, 34% were by email, and 24% were captured via web-based or online forms. Some tips were received by letter and some even by fax. The more options available to people, the better.
- Audience [1] – Hotline awareness should focus on any person who could provide a tip, which means going beyond the organization’s employees. Employees are a great start since they made up 51.5% of the tips received related to fraud. Customers made up 17.8%, and vendors came in at 9.9%. There were several other groups who provided tips as well, including the people who chose to remain anonymous.
- Anonymous – This is a must for an effective hotline as evidenced by the fact that 14% of tips came from anonymous sources. However, it can be challenging to create a hotline that collects enough information from an anonymous party to be useful while also protecting the source’s anonymity. In today’s world, it is harder and harder to remain anonymous. Organizations should educate people on ways to remain anonymous by explaining, for instance, that if an anonymous source wants to call the hotline from their phone, they could dial “*67” prior to entering the number. This will hide the number from the person receiving the call. Also, an anonymous caller can be given a unique identifier to use when contacting the hotline. This allows the caller to call back into the hotline to get a status report and the organization to collect more information from the caller to further the investigation while maintaining their anonymity.
- Active – Finally, tips received from hotlines should be reported to employees and others. They could be publicly available on the organization’s website. It is important to show the tips received along with other stats related to issues reported, researched, and resolved. By doing so, the organization provides transparency and accountability, which can provide reassurance to people who may choose to call the hotline. As an example, the United States Securities and Exchange Commission (“SEC”) reports back to Congress every year related to the Dodd-Frank Whistleblower Program. For FY 2016,[2] the report provides a lot of information related to 4,218 tips received and rewards totaling $57 million paid to 13 whistleblowers. However, there is practically no information to reconcile the two numbers. It would be much more beneficial if there were some quantification and reporting of the tips that led to opening a new investigation, contributed to an ongoing investigation, were passed along to another agency, or were deemed unwarranted.
While maintaining an effective hotline is important, you shouldn’t forget about tips coming in from other ways. See points two and three from my prior blog related to increasing your chances of catching fraud.
If you haven’t evaluated the effectiveness of your hotline, then you should look to the five “A”s to keep your hotline hot.
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[1] https://www.acfe.com/rttn2016/docs/2016-report-to-the-nations.pdf
[2] https://www.sec.gov/whistleblower/reportspubs/annual-reports/owb-annual-report-2016.pdf