Hotlines are Key to Success of Anti-Corruption Initiatives
“Anti-corruption hotlines are proving to be the most successful detection method at the disposal of organisations in the fight against institutional fraud and corruption,” says Deloitte Associate Director in Risk Advisory Forensics, Mimi Le Roux.
CAPE TOWN, 12 December 2012 - Hotlines dedicated to anti-corruption initiatives are achieving great results in the detection, and prevention of fraud and corruption. The various Deloitte managed hotlines and reporting lines, for the past six months, recorded an astonishing total of 41 500 calls, of which 8080 led to actual reports for investigation.
The proven confidentiality and anonymity guaranteed by the reporting lines are encouraging employees and members of the public to take a more active role in combating fraud and corruption. The protection afforded to people reporting incidents of suspicious behaviour, activities or practices are instilling a confidence not only in their own safety but also in the organisation’s ability to tackle and deal with these issues.
“The proof that the systems are working and concerns are being taken seriously is encouragement to step forward and report suspicions. We have been able to actively detect suspected fraud and corruption across both public and private sector clients with the help of employees and members of the public who are using the reporting lines effectively to rid their workplaces and our society of fraud and corruption,” says Le Roux.
Hotlines are definitely one of the most effective mechanisms of allowing anonymous reporting as callers are not required to provide their identity and, if the hotline is managed independently a further assurance of anonymity is provided. Deloitte, which operates independent hotline and reporting line services, has seen a surge in the number of people using the various services.
Once a voluntary exercise hotlines and reporting lines have evolved into must-have preventative controls for public and state-owned companies in terms of the Companies Act. This is now regarded as best practice with the publication of the King Reports on Corporate Governance.
Le Roux cites The Association of Fraud Examiners’ (ACFE) Report to the Nations on Occupation Fraud and Abuse (2012) which reports that 43.3% of frauds are detected via tips and points out that it makes a compelling argument to regulate the requirement of having a facility available to employees and other stakeholders.
“Employees are the eyes and ears in the fight against fraud and are essentially an organisation’s first line of defence in preventing and detecting fraud and corruption. Empowering employees through the provision of anonymous (and other) ways of reporting fraud and corruption can only benefit an organisation,” says Le Roux.
“Simply put, you cannot address a problem you are unaware of. Hence, it goes without saying, you cannot fight fraud and corruption if there are not multiple channels available for employees, suppliers and citizens to report suspicions in this regard. Hotlines also relay a clear message that an organisation is providing an additional mechanism aimed at addressing reports or tip offs that are made regarding fraud and corruption,” she says.
South African legislation impacting on hotlines, The Protected Disclosures Act, broadly requires organisations to ensure protection of the whistleblower and to provide a procedure for disclosure. The Companies Act, however, has taken it a step further, making the establishment of a facility for reporting compulsory for public and state-owned companies.
About the United National International Anti-Corruption Day Campaign
Fighting corruption is a global concern because corruption is found in both rich and poor countries, and evidence shows that it hurts poor people disproportionately. It contributes to instability, poverty and is a dominant factor driving fragile countries towards state failure.
Governments, the private sector, non-governmental organisations, the media and citizens around the world are joining forces to fight this crime. The United Nations Development Programme (UNDP) and the United Nations Office on Drugs and Crime (UNODC) are at the forefront of these efforts.
The 2012 joint international campaign focuses on how corruption hinders efforts to achieve the internationally agreed upon MDGs, undermines democracy and the rule of law, leads to human rights violations, distorts markets, erodes quality of life and allows organised crime, terrorism and other threats to human security to flourish.