Internal Investigations: A Basic Guide Anyone Can Use

Internal Investigations A Basic Guide Anyone Can Use KH Spencer Pickett

A John Wiley and Sons, Ltd., Publication

Internal Investigations

Internal Investigations A Basic Guide Anyone Can Use KH Spencer Pickett

A John Wiley and Sons, Ltd., Publication

Published in 2008 by

John Wiley & Sons, Ltd, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ, England Telephone (+44) 1243 779777

Email (for orders and customer service enquiries): [email protected] Visit our Home Page on www.wiley.com c 2008 KH Spencer Pickett Copyright  All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, Saffron House, 6-10 Kirby Street, London, ECIN 8TS, UK, without the permission in writing of the Publisher. Requests to the Publisher should be addressed to the Permissions Department, John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ, England, or emailed to [email protected], or faxed to (+44) 1243 770620. Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The Publisher is not associated with any product or vendor mentioned in this book. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the Publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought. Other Wiley Editorial Offices John Wiley & Sons Inc., 111 River Street, Hoboken, NJ 07030, USA Jossey-Bass, 989 Market Street, San Francisco, CA 94103-1741, USA Wiley-VCH Verlag GmbH, Boschstr. 12, D-69469 Weinheim, Germany John Wiley & Sons Australia Ltd, 42 McDougall Street, Milton, Queensland 4064, Australia John Wiley & Sons (Asia) Pte Ltd, 2 Clementi Loop #02-01, Jin Xing Distripark, Singapore 129809 John Wiley & Sons Canada Ltd, 6045 Freemont Blvd, Mississauga, Ontario, L5R 4J3 Canada Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Cataloging-in-Publication Data A catalogue record for this book is available from the Library of Congress British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN 978-0-470-77968-2 (HB) Typeset in 11/13pt Times by Integra Software Services Pvt. Ltd, Pondicherry, India Printed and bound in Singapore/Great Britain by TJ International, Padstow, Cornwall This book is printed on acid-free paper responsibly manufactured from sustainable forestry in which at least two trees are planted for each one used for paper production.

This book is dedicated with love to my wife, Jennifer Maureen Pickett A special thanks goes out to Stuart Wilson, Charlotte Revely and Bryan Dennis

Corporate Accountability

RESULTS

TOR

BASIC STAGES: INITIALPLAN PLAN INITIAL TOR: TOR:

Diary of the Investigation DATE ITEM

TASK

Begin Investigation

DATE

Sign-Off FIELDWORK – SUMMARY SCHEDULE FIELD WORK –Summary Schedule TOR: TOR: ISSUES

EVIDENCE

IMPLICATIONS

Evidence Schedules Issue: Aim

Technique Results

Ascertain Issues Substantiate Claims Infer Implications

Quality Assurance

REPORT DRAFT/FINAL TOR

Communicate

FINDINGS

Results

Timeline of Events DATE EVENT

Risk Management Impacts

RESULTS

TOR

Contents 1 The context 1.1 Why investigations? 1.2 Investigate what? 1.3 The line manager’s role 1.4 A Basic standard 1.5 Using the Basic standard 1.6 To close Basic guidance

1 1 2 3 4 4 6 6

2 Corporate accountability 2.1 Why accountability? 2.2 Links to governance 2.3 The outline TOR 2.4 Focusing on results 2.5 How big is the issue? 2.6 Complaints 2.7 Staff discipline 2.8 Fraud 2.9 Health and safety 2.10 Breach of procedure 2.11 Whistleblowing 2.12 To close Basic guidance

9 9 11 11 12 14 15 17 18 20 21 24 24 25

3 Initial planning 3.1 Why planning? 3.2 Fact finding 3.3 The quick fix 3.4 Setting the detailed TOR 3.5 Locating hot spots 3.6 Establishing tasks 3.7 The sponsor

27 27 28 29 31 32 34 35

viii

Contents

3.8 Appointing the lead investigator 3.9 Other roles and responsibilities 3.10 Resources 3.11 Access rights 3.12 Planning and control 3.13 Publicity 3.14 A short example 3.15 To close Basic guidance

37 39 40 42 43 45 47 48 48

4 Basic fieldwork 4.1 Why fieldwork? PART 4.I ASCERTAINING THE ISSUES 4.2 Considering the issues in more detail 4.3 Understanding the processes and operations 4.4 Practical examples 4.5 Diary of the investigation 4.6 Exploring Example 10 4.7 Moving to the next stage PART 4.II SUBSTANTIATING THE CLAIMS 4.8 Considering claims 4.9 What is good evidence? 4.10 Sources of evidence 4.11 Dirty tricks? 4.12 Using samples 4.13 Setting an aim for the exercise 4.14 Further practical examples 4.15 Rules of evidence 4.16 Establishing the context 4.17 Exploring Example 10 4.18 Moving to the next stage PART 4.III INFERRING THE IMPLICATIONS 4.19 Getting to the implications 4.20 What about politics? 4.21 The Evidence ‘C’ Scale 4.22 Other considerations 4.23 Further practical examples 4.24 Exploring Example 10 4.25 To close Basic guidance

51 51 52 52 54 55 60 61 62 63 63 63 65 67 69 70 71 76 77 77 81 81 81 82 83 84 85 92 93 93

5 Basic fieldwork tools – interviewing 5.1 Why interviewing? 5.2 Four dimensions of rapport

95 95 96

Contents

5.3 Open forum inquiry panels 5.4 Interviews and the Basic model 5.5 Preparing the interview 5.6 More on structure 5.7 Getting results 5.8 Exploring Example 10 5.9 Is it that easy? 5.10 To close Basic guidance

ix

99 100 102 104 107 110 112 114 114

6 Communicating results 6.1 Why communications? 6.2 Types of reports 6.3 Structuring the report 6.4 Timeline of events 6.5 The investigator’s opinion 6.6 Recommendations 6.7 Recommending better internal controls 6.8 Risk management 6.9 Exploring Example 10 6.10 To close Basic guidance

117 117 118 121 122 123 126 128 130 133 134 136

7 Quality assurance 7.1 Why quality assurance? 7.2 Ensuring consistency 7.3 Establishing a Basic approach 7.4 Quality assurance checklists 7.5 Standardised documentation 7.6 It’s basically simple 7.7 To close

139 139 139 141 149 174 186 187

8 Beyond basics 8.1 Why a risk management culture? 8.2 Risk scanning 8.3 Establishing conduct 8.4 Establishing controls 8.5 Corporate reputation 8.6 To close

189 190 192 193 194 195 197

Index

199

1 The context

All organisations need to carry out investigations from time to time and all managers need to be able to perform an investigation or participate in some way in an ongoing investigation. Some organisations set out guidance on how internal investigations should be undertaken. In some cases, a small number of employees may receive relevant training at some point in their career. An even smaller number of businesses ensure that all internal investigations are carried out by trained specialists (or external parties) who will employ their own professional approach. This final type of organisation is outside the remit of this book, while all others should receive some benefit from our approach to making sure internal investigations are entirely credible. In this chapter we discuss the type of issues that may need to be investigated and introduce an approach that does not undermine the role of the line manager. Each chapter of the book will identify a Basic Principle and our first such principle is stated as follows:

BASIC PRINCIPLE ONE The board should prepare and implement a corporate standard covering the way internal investigations will be conducted within the organisation.

1.1 WHY INVESTIGATIONS? Businesses, public sector organisations, not for profit entities, educational bodies and, for that matter, all types of organisations set out to achieve their stated aims in a way that meets the needs of their key stakeholders. When all goes well, the focus falls on surging forward and being successful. But along the way, there will always be stumbling blocks that get in the way and which need to be removed before they really hinder progress. Many large and powerful businesses have been hurt by an embarrassing incident that was left to simmer and then got out of control. Moreover, employment tribunals are able to award large amounts of compensation to employees who have been unfairly treated. This is why good organisations make sure all non-routine problems are addressed at an early stage. Any failure to tackle an allegation made about an aspect of a business undermines corporate values and could

2

Internal Investigations

result in claims of cover-up, negligence or even conspiracy against senior management and the board. Any such failure could also open the door to civil suits against the executive management team where regulations or legal provisions have been undermined. Even worse, criminal charges can arise when a known irregularity is not properly addressed by those responsible for running an organisation. It is difficult to visualise any type of entity in this day and age that could justify not having a formal standard on the way it conducts its internal investigations. We offer one such standard, designed to be used as a Basic, but important, new management tool.

1.2 INVESTIGATE WHAT? An internal investigation is a structured response to a non-routine problem that seeks to protect the corporate values and overall reputation of an organisation. Serious problems relating to major fraud, significant health and safety breaches, breach of regulations and accounting practices or claims of corporate negligence will tend to be investigated by external specialists who have access to their own professional standards and well-developed approaches. Less serious issues may be investigated by the organisation itself through the use of a suitable employee to conduct the necessary inquiries. There are many issues that, although non-routine, may arise from time to time in even the best run organisations. Non-routine issues may include, for example: • • • • • • • • • • • • • •

Claims of bullying/harassment. Staff misconduct. Complaints made by external parties. An increase in certain types of processing errors. Inappropriate behaviour by some teams within the company. Grievances raised by a staff member who feels they have been unfairly treated. Claims by trade unions of unfair working practices. Poor staff morale in one part of the organisation. Reckless business decisions. Breach of procedure and/or unclear procedures. Missing data or files. Allegations of unsuitable business practices. Improper use of business resources. Unexplained trends in statistical data.

At times, a problem may arise in similar organisations where an unforeseen set of circumstances impacts the business, which leads to an investigation

The context

3

to assess whether this problem could happen elsewhere. For example, an employee may inadvertently hire illegal immigrants and then suffer fines as a result. A separate employer operating in a similar business sector may want to instigate an internal investigation to determine whether their hiring systems are robust enough. Another industry may experience product misselling practices which may lead a company within this same sector to assess whether it has a similar problem. However, an internal investigation will be of little or no use unless it is carried out in a professional and sensible manner.

1.3 THE LINE MANAGER’S ROLE An investigations standard is designed to protect the organisation and promote corporate values and in turn support a more successful business. Well-delivered investigations help an organisation address special problems that would otherwise be left unattended. When an organisation employs a large team of in-house investigators to examine the behaviour of its workforce and business practices, there is a good chance that this organisation is badly managed. Unfortunately, it is those badly managed organisations which employ demotivated staff that stimulate the need to carry out a large number of internal investigations as the norm. Using a large internal investigation/compliance team may also blur the line management role, where certain types of issues should really be investigated by the management team itself. Issues relating to performance, capability, staff conduct, attendance and systems functioning fall firmly within the line management remit. In examining these types of issues, the line manager will want to adopt a professional standard regarding the way non-routine inquiries are progressed. An investigator who works outside the management chain of the work area subject to the investigation should only be used where, due to the nature of the investigation, there is a clear need for some impartiality. Where a member of staff has raised a grievance against their line manager, it is pointless asking the same manager to investigate the matter. Where a complaint has been received that suggests all levels of management failed to deal with the matter, again there will need to be an impartial person in charge of the subsequent inquiries. When establishing the terms of reference for the investigation it should become clear whether the work is a line management role or whether it will have to be resourced from outside the line. The guiding principle is to give the investigation to the relevant line manager unless this approach would undermine, or appear to undermine, the credibility of the investigation. Although sometimes, it is a good idea to use a manager from outside the line role as a form of peer review – to bring a fresh perspective on the problem at hand.

4

Internal Investigations

1.4 A BASIC STANDARD This book aims to deliver a Basic standard for conducting investigations. We have developed one detailed model to set the context for the book and we will use each of the remaining chapters to explain this model and how it may be adopted by any organisation and used by anyone who has been asked to conduct an internal investigation. Figure 1.1 is a rather busy template that sets out the Basic standard and how it relates to planning, performing and presenting an internal investigation. Do not be put off by the detail in the model, as by the end of the book we aim to give you a sound understanding of each aspect of the template and how you can use it to best effect. Corporate Accountability

RESULTS

TOR

BASIC STAGES: INITIALPLAN PLAN INITIAL TOR: TOR:

Diary of the Investigation DATE ITEM

TASK

Begin Investigation

DATE

Sign-Off FIELDWORK – SUMMARY SCHEDULE FIELD WORK –Summary Schedule TOR: TOR: ISSUES

EVIDENCE

IMPLICATIONS

Evidence Schedules Issue: Aim

Technique Results

Ascertain Issues Substantiate Claims Infer Implications

Quality Assurance

REPORT DRAFT/FINAL TOR

Communicate

FINDINGS

Results

Timeline of Events DATE EVENT

Risk Management Impacts

RESULTS

TOR

Figure 1.1 Template representing the Basic standard.

1.5 USING THE BASIC STANDARD We now need to whiz through the template in Figure 1.1 and explain how the Basic standard fits in. We have already mentioned that all investigations, both large and small, must involve at least three main steps, which fall on the left of the template:

The context

5

1. Planning the investigation. 2. Performing the fieldwork. 3. Presenting the results. On the right of the template sits the Basic standard, which sets out the five main steps that fall under our approach to performing internal investigations, as follows: Planning: 1. Beginning the investigation. Performing: 2. Ascertaining the issues at hand. 3. Substantiating the claims. 4. Inferring the implications. Presenting: 5. Communicating the results. The Basic standard uses several documents that summarise the entire process of conducting the investigation by recording the detailed results of the work that was carried out. Our standard uses these documents to underpin a professional approach to dealing with problems in the workplace. We will examine the standard documents in some detail in later chapters, but at this stage it helps to present a brief outline of some of the key documents in Figure 1.1: • Initial Plan. This document sets out the terms of reference (TOR) and resources for the investigation. It should be signed off to authorise the work and allow access to the relevant information and documentation. • Diary of the Investigation. The investigator is required to complete a log of everything they do during the investigation – to record progress and decisions made. • Fieldwork Summary Schedule. This all-important document summarises the analysis carried out to ascertain the claims, the verification of the evidence surrounding the claims and what this means for the organisation. • Evidence Schedules. These documents support the Fieldwork Summary and record the detailed interviews, document analysis and examination of evidence gathered during the investigation. • Report. The draft and final reports set out what was found against each aspect of the terms of reference that have been set for the investigation. • Timeline of Events. The final document is a record of the actual events that led up to the investigation in the form of a timeline that should be attached to the report as an appendix.

6

Internal Investigations

An internal investigation entails establishing the TOR and documenting the results of the work carried out to discharge this, which is then formally reported. The context for the work is set firmly within the need to promote corporate accountability by quickly sorting out internal problems before they need to be addressed by external regulators and other agencies. The final report will need to comment on any aspect of the organisation’s risk management framework that needs improving to deal with any newly defined risks that led to the problem that had to be investigated – using the ‘let’s ensure this never happens again’ approach. As already mentioned, while the template may appear complex at first sight, in the remaining chapters we will be explaining how the template and our Basic approach can be broken down and used by absolutely anyone.

1.6 TO CLOSE To close this chapter we need to make clear that in dealing with internal investigations, most organisations either tell their managers to use their common sense or they may employ a specialist in-house or external team of professional investigators. We propose a third approach that involves developing a formal standard on internal investigations and ensuring most managers are able to use this whenever appropriate. Our first Basic Principle is repeated below, as follows:

BASIC PRINCIPLE ONE The board should prepare and implement a corporate standard covering the way internal investigations will be conducted within the organisation.

BASIC GUIDANCE When developing a standard for internal investigations you should consider the following five-point guidance: 1.1. Assess the way that existing internal investigations are carried out and determine whether this is the most effective way of dealing with nonroutine problems that need to be examined in some detail. 1.2. Assess trends in terms of complaints, grievances, civil actions, reports of improper work practices and other issues that affect the organisation or which affect similar organisations in the relevant sector.

The context

7

1.3. Emphasise the importance of ensuring a capacity to undertake internal investigations by redefining the management role to include undertaking investigations in relevant areas of responsibility and also assisting, when required, in investigations initiated in other parts of the organisation. 1.4. Develop and publish a suitable standard on internal investigations, locate suitable guidance on the intranet and train a pool of managers in using the Basic standard. 1.5. Monitor the way internal investigations are conducted and seek ways of improving the efficiency and effectiveness of these investigations. Note that Chapter 7 contains several checklists to support the abovementioned guidance. Our approach to conducting internal investigations will be examined in some detail throughout the book as each chapter deals with an aspect of the Basic standard. In practice, bad things can happen to good organisations but it is the way we manage these problems that helps good organisations learn, make progress and become even better.

2 Corporate accountability

Corporate accountability is now an all-consuming force that affects all types of organisations. Companies that do not make enough profit get hotly scrutinised by a doubtful investment community, while companies that make too much profit are equally targeted with claims of exploitation and sharp business practices. As well as needing to hit earnings targets in a fair and acceptable manner, corporate executives are told they must adhere to reams of regulations and legislation that tend to run counter to achieving their targets. The public sector is told to innovate, take risks and constantly reform itself, but receives intense press coverage whenever it gets it wrong. Board members and public sector officials are kept awake at night with visions of civil suits, regulatory investigations, employment tribunals, health and safety probes and security breaches. Meanwhile, ‘saving the planet’ is seen by many stakeholders as the most important issue that all organisations need to grapple with, or be publically chastised for ‘destroying the planet’. The reach of corporate accountability is fast becoming so vast it generally means that all organisations are accountable to everyone for more or less everything they do, or fail to do. In this chapter we discuss the different types of issues, including breach of procedure, that can affect an organisation’s accountability. Each chapter of the book will identify a Basic Principle and our second such principle is stated as follows:

BASIC PRINCIPLE TWO Internal investigations should be based on natural justice and should take on board all relevant policies and procedures in promoting corporate accountability.

2.1 WHY ACCOUNTABILITY? Corporate accountability sits right at the top of our investigations template in Figure 2.1, as it is the main driver for making sure a clear standard is in place that means all internal investigations are carried out properly. Unfortunately, this overarching concept is often missing from many policies on

10

Internal Investigations Corporate Accountability

RESULTS

TOR

BASIC STAGES: INITIALPLAN PLAN INITIAL TOR: TOR:

Diary of the Investigation DATE ITEM

TASK

Begin Investigation

DATE

Sign-Off FIELDWORK – SUMMARY SCHEDULE FIELD WORK –Summary Schedule TOR: TOR: ISSUES

EVIDENCE

IMPLICATIONS

Evidence Schedules Issue: Aim

Technique

Results

Ascertain Issues Substantiate Claims Infer Implications

Quality Assurance

REPORT REPORT Draft/Final DRAFT/FINAL TOR

Communicate

FINDINGS

Results

Timeline of Events DATE EVENT

Risk Management Impacts

RESULTS

TOR

Figure 2.1 Investigations template.

investigations. The equation is simple; most scandals and disasters develop from smaller issues that are not properly addressed at an early stage by an organisation. Many industrial disputes arise from a minor misunderstanding or a complaint from staff that is ignored by the management team. Many corporate scandals pop up after several near misses, which could have alerted management to a possible problem, were ignored. Good internal investigations address complaints, near misses, allegations of potential problems and breach of procedure in such a way that enhances corporate accountability. Good managers are proud to say they have a method in place to make sure minor problems are investigated and addressed before they have a chance to accelerate and emerge as major problems. The worst thing a company can do is know there is a problem, but fail to quickly sort it out or even worse, try to cover it up. Most politicians and senior executives resign not because they made a mistake, but because they failed to admit their error as soon as it came to light. Or because they failed to investigate the matter quickly and effectively, to make sure it cannot happen again. All good internal investigations must start with the statement, ‘What do we need to do to make sure this problem does not hurt our reputation for good corporate accountability?’

Corporate accountability

11

2.2 LINKS TO GOVERNANCE Corporate accountability is a subset of good corporate governance. A great deal has been written about corporate governance, but it is enough to say it is mainly about integrity, transparency and making sure the adopted approach to managing risk is clearly defined and properly communicated to all key stakeholders. In essence, good governance practices ensure that people who deal with an organisation are able to appreciate the risks the business faces and are happy with the extent to which these risks are being dealt with. Which, in turn, breaks down into the well-known concept that suggests risk-taking businesses may earn more than risk-averse ones, but they will be less secure. Meanwhile, public sector bodies which need to try new approaches will attract more risk than those who have adopted a more traditional approach to service delivery. We argue that internal investigations address non-routine issues so that they do not become unmanageable risks, if left unattended. A staff member who makes a formal grievance may have a legal claim against a company that does not bother to investigate the grievance. A patient who complains about their doctor may launch a legal claim if their allegation is not properly examined. An organisation that makes sure all internal investigations are carried out with due regard to the principles of natural justice will be better able to promote a culture of corporate integrity, which means investigations will have to ensure: 1. The fair treatment of all parties to the investigation. 2. That the investigation is conducted by someone who is both impartial and professional. 3. All parties have a chance to put their case forward and respond to all evidence that affects them. 4. There is a right to appeal against any ruling that adversely impacts any party to the investigation. Where these four principles are in place we can argue that the organisation may be well governed both in times of calm and, more importantly, when problems need to be addressed. Where these principles are not in place we can argue that, unbeknown to key stakeholders, additional risks to the governance of the organisation may well materialise.

2.3 THE OUTLINE TOR Returning to our template in Figure 2.1, we have included a link between the two concepts of TOR for the investigation and Results of the investigation. This is a short-cut which sums up the entire template and in turn

12

Internal Investigations

establishes the Basic standard that this book is about. We need to ensure that an internal investigation means the terms of reference set for the work lead to a result that makes sense and satisfies the principles of natural justice that we outlined earlier. Note that our template ends when the results of the investigation meet the criteria set by the original terms of reference set for the work as a bottom-line concept. The TOR–Results box sits within the Corporate Accountability box of our template, so we can argue that true accountability really means what we said we would do – we actually do achieve. If we attach such importance to the TOR of the investigation we need to get these terms right, at the outset of the work. Extending the concept of natural justice we can set out the wider aims of our efforts to carry out internal investigations as follows: • Address the matters that are subject to the investigation. This topic will be developed further in the next chapter on initial planning. • Ensure that the investigation is non-discriminatory and meets all regulatory and legal provisions relating to employment law, human rights and other legislation. • Promote the prompt resolution of outstanding issues. • Take on board the views and expectations of relevant stakeholders as far as this is practicable. • Adopt the use of a transparent methodology that ensures all relevant parties to the investigation are heard. • Align the work with all relevant corporate procedures relating to staffing, resources, health and safety, security, information systems and general management practices. • Adopt rules of confidentiality that acknowledge sensitivities and relevant legal provisions. The aim of an internal investigation is to complete the terms of reference and also ensure that a good job is done by everyone involved in the investigation.

2.4 FOCUSING ON RESULTS When something goes wrong the standard response is for the organisation to state that it has launched a full investigation and will await the results before making any further statements. While this response generally sounds good when delivered with a serious tone and by worried-looking executives, there is generally a hope that the problem will simply die and disappear as the public’s attention is focused elsewhere when the next scandal pops up. It is not enough to say there will be a full investigation. Our template suggests that it is the results of the investigation that are important, even if

Corporate accountability

13

most people have forgotten about it as the work drags on and time marches forward. If an investigation is not properly concluded, it means that senior management: 1. Does not really care enough about the matter in question to make sure it is fully concluded. 2. Condones the actions (or failure to act) that led to the problem in the first place. 3. Oversees such a chaotic set-up that it does not realise the matter has been left, or there are so many other problems in hand that it has lost count. The more severe the issues under investigation, the more impact they will have on relevant stakeholders, and there is more chance that the corporate reputation will be damaged. If there are clear allegations that our overseas sales people are bribing certain government officials to win procurement contracts, but this matter is not investigated, there will be an integrity risk. There must be an attempt to check out the allegations, or risk giving out the message that bribery claims are not taken seriously by the organisation. Where there is no need to launch an investigation due to the nature of the allegation, then this decision must be publicised along with the reasons. Most law enforcement agencies would rather have the company attempt to sort out its problems through an internal investigation before law enforcement needs to get involved, unless there was an obvious cover-up. The results that are expected from an internal investigation should always be kept in mind by the appointed investigator; they should be to: • Assess the allegations in terms of their severity so that the most appropriate resources can be applied to the investigation. • Make clear that the organisation responds to problems by ensuring they are fully investigated and addressed, and only issue the results once all issues have been clarified and examined. • Collect and analyse sufficient reliable evidence to determine the truth or falsity of the allegations. • Seek to minimise any disruption and gossip that may impact on staff morale. • Encourage and implement improved arrangements to ensure risks are better appreciated and managed. • Produce a sensible response that promotes good corporate accountability. Managers tend to respond to performance management systems that have set targets and set goals that must be achieved. Unfortunately, most organisations

14

Internal Investigations

do not have a measure for ensuring that issues that should be investigated are in fact fully investigated and resolved.

2.5 HOW BIG IS THE ISSUE? We have said that our approach to internal investigations applies to issues that are non-routine but which do not entail major fraud, gross misconduct or a significant breach of health and safety practices. However, even minor issues may escalate into more important matters as an investigation progresses. It is important to get a good fix on the types of issues in question when setting the initial terms of reference for the work. When setting the scope of the investigation we will need to consider several factors to work out whether it will entail a small or larger effort to Plan and Perform the investigation, and then Present the results: • Does the matter impact a small or large number of people within the organisation? • Is it a local or more important head office matter? • Does it involve junior or more senior people? • Is it an internal matter only or could there be repercussions for external parties? • Does the problem arise from a one-off incident or is it an ongoing concern? • Does the issue in question relate to a low-profile consideration or would it be a matter for public scrutiny and press interest if left unresolved? • Would a wide range of stakeholders be aware of and concerned about the issues in question? • Does the nature of the matter under review impact to a lesser or a greater extent on our corporate values and possibly our reputation in the market place? • Will the way we deal with the matter involve a local response or will it need to be dealt with by working with the media? • Does the incident involve a simple misunderstanding or does it mean there are problems managing important compliance routines? • Will the results of the investigation conclude the matter or possibly open the door to resulting claims against the organisation? • Does the investigation involve problems that suggest a worrying pattern of irregular behaviour that has occurred in the past? We will need to work carefully through the above before deciding on who best to carry out the internal investigation and what timeframe to work towards.

Corporate accountability

15

2.6 COMPLAINTS Many internal investigations arise from assertions that are made orally or in writing through the official complaints procedure. Some complaints are made anonymously, again either in writing or spoken over the phone. Each organisation will have a policy on complaints that will vary depending on their approach and regulatory framework, for example: 1. An inquiry may resemble a complaint but may simply be a request for further information that needs to be referred to the right team. 2. Some complaints relate to matters that need to be investigated elsewhere by, say, the entity responsible for the matter in question. 3. Issues that are subject to court proceedings will have to be set aside as there may be some confusion and/or legal advantage if they proceed to internal investigation. 4. Some policies argue that a complaint is stalled where the complainant refuses to provide information or the complaint is part of a long-term pattern from the same party that has proved fruitless in the past. 5. Some complaints are obviously without merit and need not be investigated at any great length. 6. In rare cases, a complaint may be impracticable to pursue because of the passage of time or the resources needed to investigate the issues would be entirely disproportionate. However, the majority of complaints will need to be fully investigated and concluded in a way that satisfies all parties. A good complaints procedure can be used as a market research facility to gather information on important new ways of making improvement to business practices. Clever organisations actually encourage complaints and, even if the statistics may look poor at first, there are long-term gains as well-managed problems can be used to make a good company appear even better, in the eyes of customers and clients. Before we get to the real investigation stage, there are a few pointers to do with managing complaints that should be noted: • The starting place is to hold the CEO responsible for the complaints policy and so establish the importance of making sure it is robust and properly applied. Moreover, any failure to cooperate with a complaints investigation could mean a senior manager intervenes and obstructive behaviour could possibly lead to a disciplinary offence. • Design a policy on complaints that says, for example, all complaints will reach fact-finding stage within 5 days and be resolved within, say, 20 days – or an interim report will be made to the complainant if this deadline cannot be met.

16

Internal Investigations

• Publicise the formal complaints procedure on the website and within brochures in a way that makes it accessible to people with disabilities and poor language skills. • Appoint an official complaints officer to administer the procedure and coordinate ongoing investigations so that there is only one investigation into each specific complaint and associated problems are fully understood. • On receiving the complaint, assign a case number and send out an acknowledgement and a copy of the corporate complaints procedure to the complainant. • Maintain a database of complaints using standard data and record action taken in a central location. Record the actual complaint but not any initial judgements made about it at this early stage. It is a good idea to make sure a record of compliments received from external parties is also held to maintain a sense of balance. The files should be kept for a standard time, up to say 10 years. • Record all verbal conversations using standard forms. • Offer to meet with the complainant and provide an idea of the action that will be taken to move the matter forward – although for practical reasons, a phone conversation may have to suffice. Meanwhile, indicate to the complainant any further action that they are entitled to take. • The complaints officer should pass the complaint to the relevant business manager for the area in question so that all the points raised in the complaint are addressed and all relevant persons are seen. Make sure the matter goes to a level of management higher than any persons being complained about. • Adopt a policy of early resolution at a local level as often a complaint results from a misunderstanding that a simple apology will resolve. The apology should relate to the misunderstanding and should not be taken as an admission of guilt. • Make clear the rules on confidentiality and the circulation list for progress reports and correspondence. Ensure access rights are in place so that the matter can be investigated promptly and fully. • If an employee is found to be negligent or worse, then ensure the disciplinary procedure is instigated as a separate matter. • Complainants should be given feedback on their complaint and they can be asked to indicate whether they are happy with the way it was handled. • It is possible to ask internal audit to review the complaints procedure from time to time to ensure it is sound and is being applied across the organisation. The above issues provide an introduction to the way complaints may be addressed and our Basic approach to planning, performing and presenting

Corporate accountability

17

investigations may be used by the investigating manager to resolve any complaints in a professional manner.

2.7 STAFF DISCIPLINE Most internal investigations will simply result in sorting out a problem and allowing the organisation to learn and move forwards. It is a sad fact of life that some investigations will provide an indication that the standards of behaviour of one or more persons employed by the organisation fall short of what is considered acceptable. Where this happens, we will need to turn to the corporate disciplinary procedure for help in ensuring the consistent and fair treatment of everyone in the organisation. Employees may, in turn, be protected by a grievance procedure where they can ask for problems such as bullying or discriminatory practices by their manager or work colleagues to be addressed. A clear policy should be in place that says an abuse of position to undermine, humiliate or injure with offensive, intimidating, malicious or insulting behaviour is not acceptable. Care should be taken with allegations of discrimination on the grounds of race, sex, disability, sexual orientation, age or religious belief. For certain types of problems, counselling is often brought in where an employee is experiencing work-related stress, while mediation can be used to rebuild poor working relationships. Managers must be prepared to carry out internal investigations into their staff where this is required, and where there are issues outside of general staffing arrangements that may affect the career or even the continued employment of a member of staff. Each organisation will prepare its own disciplinary procedure, but there are several simple rules that need to be adopted to ensure it is fair, including: 1. The employee must be told about the nature of the complaint or allegation. 2. The issues in question must have been thoroughly investigated by the employer. 3. Most disciplinary offences relate to minor misconduct issues that result in a first written warning. 4. Gross misconduct is about serious things such as theft, fraud, fighting, assault, deliberate damage, unacceptable alcohol/drugs abuse, serious insubordination and unauthorised computer use. These more serious matters may be seen as gross misconduct where the first breach may result in summary dismissal. Many organisations suspend the employee pending the investigation when the issues being examined are very serious. 5. There must be some attempt to meet with the member of staff to discuss the problem.

18

Internal Investigations

6. Where the issue relates to poor performance or substandard behaviour, the employee should be given notice to improve with clear timescales, along with details of the changed behaviour that is required. The consequences of failing to improve should be made clear and, if there is no real improvement, a final warning may be issued. 7. The employee must be given the opportunity to be accompanied by a union representative or work friend in case they feel intimidated by the procedure. The employee may assume other rights (say to be represented by a lawyer) where this is built into their contract of employment. 8. The employee has the right to appeal to an impartial person, if they disagree with the decision or remedy given as a result of the disciplinary hearing. If the above have been observed, it is more likely that an employment tribunal or other jurisdiction will find that the employer has acted fairly in their treatment of the employee – so long as the investigation has been carried out properly. This is a key point, as any employment tribunal will take the Human Rights Act into consideration where issues such as the right to a free trial, the right to privacy and respect for family life, freedom of thought, conscience and religion, freedom of expression, freedom of assembly and association and the prohibition of discrimination have been observed.

2.8 FRAUD We have made clear that allegations of fraud should be investigated by trained forensic investigators so that the results are fair, professionally examined and admissible in a court of law. Occasionally, what appears to be a fairly harmless internal investigation may turn into a formal fraud examination and it is a good idea to set out a brief account of fraud so that the manager will know when to refer the matter to a specialist if it grows into a bigger problem. Fraud is usually used to describe depriving someone of something by deceit, which might either be theft, misuse of funds or other resources, or more complicated crimes like false accounting and the supply of false information. Fraud can take many guises, including: Theft. Dishonestly appropriating the property of another with the intention of permanently depriving them of it (Theft Act 1968). This may include the removal or misuse of funds, assets or cash. False accounting. Dishonestly destroying, defacing, concealing or falsifying any account, record or document required for any accounting purpose, with a view to personal gain or gain for another, or with intent to cause loss to

Corporate accountability

19

another or furnishing information which is or may be misleading, false or deceptive (Theft Act 1968). Bribery and corruption. The offering, giving, soliciting or accepting of an inducement or reward that may influence the actions taken by the authority, its members or officers (Prevention of Corrupt Practices Acts 1889 and 1916). Deception. Obtaining property or pecuniary advantage by deception (Theft Act 1968) and obtaining services or evading liability by deception (Theft Act 1978). Collusion. The term ‘collusion’ is used to cover any case in which someone incites, instigates, aids and abets, conspires or attempts to commit any of the crimes listed above. The Fraud Act 2006 came into play for offences committed from January 2007, and this new legislation has clarified issues to some extent by creating the offence of fraud by: • False representation. • Failing to disclose information. • Abuse of position. There are also three new offences: 1. Obtaining services dishonestly. 2. Possessing, making and supplying articles for use in fraud. 3. Fraudulently trading, applicable to non-corporate traders. Fraud is a difficult area to investigate because it involves an intent to deceive. This intent means the suspect/s have a vested interest in ensuring that the truth does not come out and will hide or alter evidence, lie, intimidate witnesses, try to spread the blame and use other tactics to make the investigation difficult to complete. Our vision of internal investigations uses the template and the Basic model to help managers acquire a new skill in carefully checking out concerns and presenting the results in a credible manner based on the balance of probabilities. In contrast, fraud investigations may result in criminal prosecutions and even the loss of liberty for the suspect, and it is right that these investigations work to the more exacting standard of evidence-gathering based on proving the fraud beyond all reasonable doubt. Questions relating to the way evidence was obtained, assessed, stored, preserved and presented will need to follow a strict set of rules before they can be heard in open court. Moreover, suspects will have to be interviewed under caution and have a right to remain silent and obtain legal representation. This book will not teach the skills

20

Internal Investigations

necessary to work to the exacting standards required for conducting fraud investigations.

2.9 HEALTH AND SAFETY Internal investigations can throw up many problems relating to breach of procedure and unusual behaviour. Where matters come to light that suggest health and safety legislation may have been infringed, we need to refer the matter onwards to our trained representatives or even to the Health and Safety Executive. All employers owe a duty of care to ensure persons employed by them, or who use their services or facilities, are protected from avoidable harm. Health and safety rules are fairly straightforward and there is an abundance of guidance and training available from the authorities and specialist companies that provide support and help in setting up procedures to ensure suitable best practice is adopted in all high- and also low-risk industries. A brief summary of the relevant provisions follows: • People who carry out health and safety assessments must have had sufficient knowledge and training to undertake these duties, or the employer must have access to such people under the Health and Safety at Work Regulations 1992. • Specific work practices are required in many sectors and suitable notices of the relevant health and safety law should be posted in the workplace giving information, advice and warnings. Certain documents, such as the Certificate of Means of Escape in Case of Fire from the fire authority or fire brigade and a certificate of Employers’ Liability Insurance, should also be displayed. Certificates should be filed, verifying employees who have been trained to use a specific piece of relevant equipment. • Certain items of equipment have to be examined periodically by competent persons. These inspection reports and routine maintenance records should be filed. • Employees are required to report certain matters to the Health and Safety Inspector, including reportable accidents and reportable dangerous occurrences and certain work, for example dealing with asbestos. • The Health and Safety Executive can force employers to control risks and prevent harm. Responsible persons can be held to account for breaches of the legislation. Prosecutions may also occur where there is a serious breach of legislation with a history of poor practices in the past, and where false information has been knowingly supplied to inspectors. The important point is that due consideration should be made in any internal investigation as to the possibility that health and safety rules may not have been fully observed and whether there needs to be any urgent action

Corporate accountability

21

taken to address this problem. The investigator would also want to make sure the appropriate parties are notified and get involved where there is an angle that impacts on the welfare of persons who are owed a duty of care by the organisation.

2.10 BREACH OF PROCEDURE Where the matters under review relate to the way procedures are being applied either in parts of, or across the entire, organisation we need to take special care. Procedures are breached where: 1. One person, or a small number of people, decide to bypass existing procedures without reasonable justification. 2. It is common practice to ignore certain procedures because of poor training and a lack of awareness. 3. The procedures are out of date and/or poorly conceived and serve no useful purpose. Each of these situations should be addressed in the most appropriate manner, which could lead to disciplinary action, staff training or a revision to the procedures to ensure they actually make sense. Many internal investigations are based around the way procedures are applied and whether improvements can be made to the existing arrangements. For example, a large number of complaints may be received where phone customers are being cut off without having their concerns properly addressed. The resulting investigation may reveal that the call centre’s procedure covering time allowance per enquiry is far too tight, which means that the agents do not have enough time to deal with phone calls to the satisfaction of the caller. There are many standard corporate procedures that the investigator should bear in mind when carrying out their work. Some of these procedures may include, for example: • Financial regulations. Watch out for transactions and decisions that fall foul of the financial management arrangements that ensure the accounts are fair and budgets and spending are properly managed. It is a sad fact that many private sector scandals over the past decade resulted from the use of accounting techniques that failed to present a true and fair view of the business. Any concerns regarding the integrity of financial transactions should be referred to the Director of Finance. • Information security standards. The way people interface with their company systems and the way they store and move information may cause some concerns. Not only will there be a standard covering the way information is captured, filed and used, but there is also the need to comply with

22

Internal Investigations

detailed provisions of the Data Protection Act and Computer Misuse Act. Flippant use of CDs and removable USB drives, as well as holding sensitive data on laptops which are taken off-site, has led to many instances where important data has been lost or mislaid. Any concerns regarding the integrity of information systems and company data should be referred to the Director of Information Systems. • Scheme of delegation. Each employee will have a set limit affecting what they can authorise and what they can spend, and these limits must be strictly observed. Where any such rules are bypassed or misapplied it can lead to decisions being made that fall outside the authority of the decisionmaker, even though the results may well bind the organisation to a new contractual agreement. Allowing a junior staff member to make important management decisions is a recipe for disaster. Any concerns regarding the way transaction authorisation limits are being applied should be referred to the relevant director for the area in question. • Contract and procurement rules. Like the scheme of delegation, an organisation will set clear limits on the contracts that can be let and the way quotations and tendering arrangements are used to ensure the best value from sourcing decisions. Any breach of these arrangements will undermine procurement strategies and it is often the case that a local manager will let contracts without going through the right channels, and even form close relationships with local suppliers that do not stand up to scrutiny. History records numerous cases where tendering rules have been ignored and even cases where employees have given contracts to their own friends and family members. Bid rigging is another concern, where rival firms agree to keep their bids artificially high when competing for a contract. Any concerns regarding the way contracts are being agreed should be referred to the Head of Procurement. • Code of conduct. Investigations often uncover a situation where one or more employees have behaved in a way that falls short of the accepted standard of conduct. Where this occurs, the disciplinary procedure should swing into action to assess whether steps should be taken against the persons in question. The investigator will have to be careful about stepping too far into a case that may result in an internal disciplinary hearing. Worse still, the behaviour may be construed as an attempt to deceive the employer and may then become a fraud that will need to be reported to the police. In this instance, the investigator becomes a potential witness to the incident and their records may be used to support further action against the employee in question. This is particularly the case where the internal investigation includes an analysis of employees’ expenses, allowances and other personal claims. Human frailty can lead to the temptation to ‘milk the allowances system’, and this has led to the downfall of many a senior manager and politician. Any serious concerns regarding the possibility that

Corporate accountability

23

the code of conduct has been breached should be referred to internal audit, the director for the area in question and the Head of Human Resources. • Performance reporting. One pressing concern is the way information is reported against personal and team targets. Misreporting is often used to increase staff bonuses and career prospects, and is an infringement of the code of conduct and the performance reporting system. Where the investigator experiences any concerns regarding the way performance data is recorded and reported, there may be serious repercussions, particularly where this is widespread practice in parts of the business. Public sector organisations tend to be assessed on the extent to which they have met their set targets, and there may be some pressure to massage the results to provide the ‘best results’ without necessarily delivering the best services. Financial services consultants may earn huge bonuses based on short-term sales of personal products, which in the long term may be quite unsuitable for the customer. There are regular allegations against police services and hospital trusts that chasing performance targets has had an adverse effect on the way the respective services are being delivered. Any concerns regarding the way performance data is reported should be referred to internal audit, the director for the area in question and the Head of Human Resources. • Operational procedures. We mentioned above the three situations where operational procedures may be breached and the response depends on the circumstances in question. Any robust investigation will need to explore why set procedures are not working and how this can be remedied. Some investigations are flawed in that they focus on what went wrong, but fail to go any further in working out why this is happening. Any concerns regarding the way operational procedures are being applied should be referred to the director for the area in question. • Others. There will be other regulations that relate to larger organisations, many of which are specific to the business or agency itself. Environmental and ‘green’ policies, maximum working hours and minimum wages directives, along with international business protocols, are all aspects of the business environment that will get translated into corporate policies and procedures that need to be adhered to by the organisation. When considering the impact of procedures on the issue being reviewed, it is an idea to ask: ‘what happened, and why?’ And go on to ask: ‘how does management satisfy itself that its procedures are being properly employed? If it takes an investigation to uncover breach of procedure then what does this say about the state of management’s internal compliance monitoring arrangements?’ Many larger organisations are starting to employ dedicated Corporate Compliance Officers in recognition of the importance of effective compliance across the organisation.

24

Internal Investigations

2.11 WHISTLEBLOWING We should mention one source of information that affects the way the issues are assessed at the TOR stage of the investigation: whistleblowing. All larger organisations should have in place a suitable whistleblowing, or ‘speak-up’, policy which gives employees the opportunity to have their concerns heard and investigated in confidence and without fear of reprisal. The Public Interest Disclosure Act 1999 gives protection to employees who are prepared to speak up about wrongdoings. Employees should be told that they can still raise concerns under the staff grievance procedure, but they can also blow the whistle over suspect actions or decisions without fear of reprisal so long as the statements are not malicious, false or vexatious. When someone raises matters of concern which are then investigated, there will be three levels of disclosure relating to the ongoing investigation: 1. The fact that there is an investigation pending. This information should be given to the party making the allegations. 2. The precise terms of reference of the investigation. This information should be given to stakeholders who have an interest in the investigation. 3. The findings to date from progress reports and the final report. This information should only be given to authorised persons who have a role in monitoring the investigation and ensuring executive decisions are made in accordance with the set procedure. It is a good idea to make sure the whistleblower is interviewed to gain a full understanding of the allegations and then kept advised that the matter is being fully investigated. It is not possible to promise anonymity, only that we will seek to minimise the number of people who are made aware of the identity of the informant, as well as complying with any legal requirement to make known all relevant information to appropriate external third parties. The reality is that there is a public duty to report any suspect practices that suggest a breach of procedure, and whistleblowers should be made aware of this responsibility or they may be deemed culpable.

2.12 TO CLOSE To close this chapter we need to make clear that an internal investigation is more than a simple exercise involving a few interviews and a final report. Investigations are part of the broader corporate accountability framework, where we try to deal with our problems before they become of interest to external agencies and third parties. We should start with this ‘big picture’ thinking and then go on to formulate TOR to ensure we address the matters

Corporate accountability

25

under question and by so doing enhance corporate accountability. A simple misunderstanding can get blown into a major problem if left to simmer. Our second Basic Principle is repeated below as follows:

BASIC PRINCIPLE TWO Internal investigations should be based on natural justice and should take on board all relevant policies and procedures in promoting corporate accountability.

BASIC GUIDANCE To help promote corporate accountability through the use of internal investigations, you should consider the following five-point guidance: 2.1. Identify the principles of natural justice and make sure these will be met, and be seen to be met, when setting out the overall aims of an investigation. 2.2. Ensure that the complaints and whistleblowing procedures are being properly applied, and there are facilities to meet with the complainant, wherever possible, to obtain a good understanding of the issues. 2.3. Identify the staff disciplinary policy and ensure that it allows all staffing issues to be dealt with by the line manager if the investigation finds that the staff code of conduct has been breached. Ensure this policy is agreed with human resources personnel. 2.4. Identify the anti-fraud policy and ensure it allows issues that suggest serious irregularities to be referred to the Chief Internal Auditor. 2.5. Identify the health and safety policy and ensure that issues relating to serious breaches of safety arrangements will be referred to the relevant officer. Note that Chapter 7 contains several checklists to support the abovementioned guidance. Having set out the way corporate accountability acts as the main driver for internal investigations, we can get into more detailed material by examining the way we can establish an initial investigation plan in the next chapter.

3 Initial planning

When an internal investigation is badly handled, this can lead to inconclusive results which can, at worst, encourage interested parties to call for an investigation into the investigation. An investigation is not just an attempt to ask a few questions and then come up with a couple of useful suggestions. An investigation is an examination of defined issues by assessing the available evidence and drawing conclusions to fulfil the terms of reference in a professional manner. The big leap from ‘asking around’ to ‘conducting a formal investigation’ lies in adopting professional standards, but also in preparing a good plan for the work. We have discussed the way investigations support corporate accountability and we have addressed the need for big picture thinking to drive the concept of sorting out problems before they emerge as major concerns. We now get closer to the detailed work that must be considered as we turn to the need to prepare a robust plan before launching into the actual fieldwork. Each chapter of the book will identify a Basic Principle and our third such principle is stated as follows:

BASIC PRINCIPLE THREE All internal investigations should start with a fact-finding exercise, before suitable terms of reference and the initial plan are prepared and approved.

3.1 WHY PLANNING? As with all work projects that last several days, it is a good idea to formulate a plan. An internal investigation should not be started until there is a clear idea of what needs to be done and how we should go about gathering the right amount of evidence. We will need to prepare a formal document setting out the terms of reference for the investigation and an initial idea of the various tasks that will need to be completed to conclude the work. The terms of reference document should be approved by an agreed sponsor and then assigned to the most appropriate person to carry out the investigation, which could be the same person who worked on the fact-finding stage. Planning is placed near the top of our template because of its importance, as shown in Figure 3.1.

28

Internal Investigations Corporate Accountability

RESULTS

TOR

BASIC STAGES: INITIALPLAN PLAN INITIAL TOR: TOR:

Diary of the Investigation DATE ITEM

TASK

Begin Investigation

DATE

Sign-Off FIELDWORK –SUMMARY SCHEDULE FIELD WORK –Summary Schedule TOR: TOR: ISSUES

EVIDENCE

IMPLICATIONS

Evidence Schedules Issue: Aim

Technique Results

Ascertain Issues Substantiate Claims Infer Implications

Quality Assurance

REPORT REPORT Draft/Final DRAFT/FINAL TOR

Communicate

FINDINGS

Results

Timeline of Events DATE EVENT

Risk Management Impacts

RESULTS

TOR

Figure 3.1 The position of planning in the template.

3.2 FACT FINDING We saw in Chapter 2 that a complaint or allegation can arise from a variety of sources and once this is logged onto the appropriate system, the factfinding stage can be considered. The investigations standard will make clear how cases are assigned, depending on their nature and the seriousness of the matter in question: • Complaints should be referred to the business unit manager for the area subject to the complaint. • Allegations of irregularity should go to the internal auditors. • Issues concerning breach of procedure and general conduct should go to the manager for the area in question. • Grievances against a manager should go to a manager outside the area in question. It is important that the person making the claim is contacted and told that a fact-finding exercise will be carried out and given some idea of the timeframe involved and how the matter will be examined. The standard may well

Initial planning

29

say that all internal investigations will be completed within a set timeframe, say two months, unless there are unforeseen circumstances. Meanwhile, an interim report will be made within say 20 days to assess the progress that has been made. The initial fact-finding exercise may be given to an impartial manager, or even a defined person from the complaints or human resources team, who should make a quick assessment of the problem at hand that will normally involve: • Interviewing the person who has made the claim, allegation, complaint or grievance. • An examination of any documentation provided by the person above. • Interviewing the manager for the area in question. • Talking to any in-house people who may have a special interest in the matters under review. It is important not to drag out the initial fact-finding stage, and work should stop as soon as it is possible to make a recommendation for one of five possible decisions: 1. 2. 3. 4. 5.

Drop the matter. Deal with it informally through, say, an apology and/or a systems fix. Launch an internal investigation through the line manager. Launch an internal investigation using an impartial manager. Give the investigation to an internal or outside specialist.

At this stage, we need to get the story and ensure a quick and appropriate response. The decision on ways forward will be made based on the nature of the problem and how it should be best addressed, as outlined in Chapter 2. The main consideration is to ask how we can fulfil our corporate accountability duty and not spend time needlessly chasing around the organisation asking dozens of questions and stoking fires. As such, we should only launch a formal investigation if we really need to and there is no other way of living up to our corporate values. At fact-finding stage, Option 2 (‘Deal with it informally through, say, an apology and/or a systems fix’) should always be given serious consideration.

3.3 THE QUICK FIX It is tempting to move from the fact-finding stage straight into the investigation planning stage and start thinking about start dates and resources. But, if we were to do so, we may well have missed a bit. In between fact finding and full planning we need to consider whether there is anything that we need

30

Internal Investigations

to do straight away. History records the scandals that have arisen and the swift promise of a full and thorough investigation, only for further problems to arise while the investigation was being set up. By the time the investigation started, what was a minor problem may well have escalated into a much bigger issue. We need to provide a dynamic response that fixes obvious inadequacies at once. There is a danger that the ‘quick fix’ approach becomes a series of blunders resulting from kneejerk reactions that have not been properly thought through. The main problem is that one fix has a knock-on effect that leads to other related problems. However, the time gap between the problem emerging and the full investigation being conducted and reported should not result in inaction and culpability as a weakness in control remains. The quick fix stage should address 10 key questions: 1. Does the fact-finding stage suggest that there is an ongoing breach of procedure that leaves the organisation open to abuse? 2. Does the fact-finding stage suggest that one or more persons should be moved because they are at risk of harm or being disadvantaged and that this risk is still current? 3. Does the fact-finding stage suggest that a control is missing or so poor that there is scope for further problems to arise as well as the one that will be considered in the pending investigation? 4. Does the fact-finding stage suggest we need to seek urgent advice from an external specialist to avoid being open to potential legal action based on the failure to act in a timely manner? 5. Does the fact-finding stage suggest that the continued presence of an employee, customer, associate or contractor will lead to further problems when the full investigation commences? 6. Does the fact-finding stage suggest that immediate steps need to be taken to protect any corporate assets, information systems or other resources? 7. Does the fact-finding stage suggest that there are actions that should be taken straight away to mitigate an identified risk? 8. Does the matter in question have implications for our insurance policies and are there any steps that our insurers wish us to consider? 9. Have we made a careful consideration of the impact of actions taken to remedy problems uncovered in the fact finding to ensure we do not create further avoidable problems? 10. Have we discussed and agreed the actions that need to be taken with the manager responsible for the area in question? The 10 factors outlined above create an additional burden on the person who undertakes the fact-finding stage, which is why the assigned individual needs to be selected with care. When we have examined each of the items above, we can go on to prepare the initial investigation plans.

Initial planning

31

3.4 SETTING THE DETAILED TOR Getting to the right terms of reference (TOR) is extremely important as this sets the stage for the actual investigation. In one sense the TOR need to be flexible to deal with changes and new insights that may come to light during the course of the investigation. While at the same time the scope of the plan should provide direction and boundaries that the investigator will work within. Too loose and the TOR become a throw-away set of clichés along the lines of ‘Review the allegations and ascertain the implications and recommend suitable ways forward’ – which is, in fact, meaningless. Too tight, say to ‘Examine document x to ascertain whether it is correctly dated and authorised’, and the investigator may become boxed in and miss new directions that arise as evidence is uncovered. We need to set terms that are strong, clear but reasonably open to new, but relevant, avenues of enquiry. More useful TOR may appear as follows: To examine the claim of bullying made by A to ascertain whether: • There were verifiable incidents of bullying during the period x to y. • Such incidents fall under the remit of the corporate anti-bullying policy. • There is sufficient evidence to instigate the corporate disciplinary procedure. • Any changes to the corporate anti-bullying procedure are required to strengthen the existing arrangements. The fact-finding stage that we outlined earlier will enable us to form the terms of reference as this will hopefully provide sufficient background knowledge on the issues in question. The terms of reference will tell us about: 1. The incidents or issues that will be investigated. 2. The scope of the work, in terms of any corporate policies that may come into play. 3. The scale of the work in terms of whether it relates to one incident or a series of events or a timeframe that we will focus on. 4. Whether there will be an attempt to consider the need to make improvements as a result of the investigation. The resulting document should give us enough information to have a good understanding of what is being considered and the potential implications of the inquiry. As a failsafe, it is possible to add a ‘catch-all’ to the terms of reference along the lines of: 5. To consider any other matters that may come to light during the investigation that impact on the issues under consideration.

32

Internal Investigations

This catch-all should be used with care as it could lead to an open-ended investigation that could go almost anywhere. One further consideration is the need to establish who we will contact during the investigation, again arising from the fact-finding stage when we would have identified any specialists inside the organisation who will be interested in the investigation. For example, we may be considering the way e-mails are being used in the organisation and whether there are instances of bullying, intimidation or sexual harassment resulting from inappropriate e-mails. The Information Systems Manager and Head of Corporate Security may be concerned about this matter in terms of the overall effect on the way business systems are used. This consideration will tend to fall within what we have called item 4 in our earlier example of TOR, as we consider any improvements to existing arrangements. One word of warning – if, in our example of assessing e-mail use, we are responding to claims that one person is misusing the system, it may at first involve just this one person sending e-mails to a colleague. Our investigation may, however, uncover the widespread abuse of the system with people forwarding sexually explicit e-mails to other workers and so extend our investigation into overall working practices, rather than just the activities of one person. Good fact finding may isolate this possibility at an early stage. If not, then we will have to decide whether to incorporate the wider picture within our investigation or launch an additional investigation that looks at the organisation-wide picture. This latter approach may suggest a formal systems review, say by our internal auditors, is commissioned rather than the short investigation that was originally planned.

3.5 LOCATING HOT SPOTS All investigations are different. A simple allegation that absence records are being miscoded may lead to an investigation that uncovers a major problem with sick-leave recording, where records are being incorrectly filed to ensure business unit targets are met. Worse still, these targets may lead to cash bonuses being paid to line managers. What started off as a straightforward investigation may end up becoming a hot issue that could make the entire organisation look bad. The investigator should always be on the lookout for warm spots that will need to be carefully managed as they may well develop into hot spots. A real problem with managing internal investigations is when the wrong person is given the job. What appeared to be a simple job is assigned to a relatively inexperienced person but then turns into something much more complex. The danger is that the less experienced staffer may not realise that the investigation they have been given has these potential hot spots and mistakes are made. Each organisation will have their own interpretation of a ‘hot spot’ and their view will depend on their risk management

Initial planning

33

process – that is, what types of issues do management see as a risk to their business? For example: • A business operation may have a history of poor employee relations resulting in frequent disputes and strikes. Any investigation that impacts on the way employees are treated, including their benefits and working practices, may turn into a ‘disputes hot spot’. • A work team that has been affected by low staff morale may react strongly to an investigation that impacts on the way their performance is assessed. • A public sector body may have a low tolerance for any problems relating to the security of large amounts of personal data from members of the public. Any investigation that suggests flaws in the way such data is managed may create major headaches for the executives and may even become a political issue. • A financial services company may be very sensitive about a planned investigation into a complaint about the way some of their product sales personnel are giving advice to customers – which results in sales of inappropriate investment products. • An investigation into alleged safety breaches by a contractor employed by a building company may turn into a full-scale scandal where there is a lot of press interest in this type of problem. • A charity may be concerned about allegations that recipients of its services do not meet the assessment criteria and funding projects do not give value for money. • A pharmaceutical company may be concerned about rumours that its testing trials for newly developed drugs may be failing to identify all important side-effects which could go on to have an adverse impact on share prices. The list goes on and on. The important point is that the terms of reference and plan for the investigation should be set, having regard to any sensitivities that could affect the way the work is undertaken. We have called these sensitivities ‘hot spots’ – and it is the nature of real organisations that a certain amount of political manoeuvring will always be present as people seek promotion, chase bonuses, develop close associations and deal with conflicts in their jobs. Good investigations stick to the principles of fairness and transparency, but we must issue a warning that not everyone will welcome an investigation that encroaches on their area of work. While recognising hot spots, we must also recognise any impact on the independence of the investigation. In the end, anyone given an investigation who feels that they are being put under pressure to develop TOR that do not provide a clear and proper response to the issues at hand, should refuse to perform the task. When a hot

34

Internal Investigations

spot interferes significantly with the due progress of the investigation, there is no point in carrying out any work since the results will lack credibility.

3.6 ESTABLISHING TASKS The initial planning process is designed to ensure the investigation is rigorous, reasonable, prompt and seen as entirely professional. Planning says what we will do, and this covers the aim of the investigation, its scope, any special factors (or what we have called hot spots) and then a series of tasks that we will need to undertake to complete the investigation. At this early stage the ‘tasks’, as with the terms of reference, should be kept realistic as there will obviously be some adjustment as the work progresses. For example, when we interview a person, we can expect to be given suggestions regarding other people who can assist the investigator. The task at planning stage should be described as ‘to interview x, y and z along with others who may have information relevant to the investigation’, rather than ‘to interview x, y and z only’. The initial planning stage will identify the various tasks that will need to be planned and then completed as part of the full investigation, including: • Interviewing the person who is the source of the allegation/complaint/ issues. Although, in practice, some investigations result from concerns over a condition or problems from a similar organisation rather than a specific allegation from an informant. If a local authority in one area gives grants to a voluntary organisation which has been discredited as untrustworthy, another local authority may decide to launch an investigation into any funding that it has provided to the same organisation. • Interviewing people who may be witnesses to the matter or incident in question. This will hopefully provide statements that give a fixed position of the issues in hand which will then have to be assessed for their reliability. Where the investigation relates to issues that do not involve incidents as such, then there will be less need for witness statements. An investigation into the way a set of targets leads to poor decisions that impair the organisation’s overall performance does not involve specific incidents but is concerned more with the general theme of identifying barriers to good performance. Although there may be people who have examples of performance problems and who can give statements to this effect. • Interviewing employees who can provide information on the problem at hand. This may be line management, administrative support, team members and others. These people may also provide further information on some of the ‘hot spots’ we mentioned earlier. • Talking to external parties who interact with the company and who may have information that relates to the investigation. A consideration will have

Initial planning

•

•

•

•

35

to be made as to the practicality of this move, depending on where the person resides and their availability. Talking to people who have some expertise concerning the issues in question. There will be specialists who can provide advice on information systems, office security, financial accounts, human resource issues and so on, who can assist the investigator. Examining any documentation relating to the case. A consideration of the accessibility of this information will have to be made at an early stage to work out whether this task will pose any difficulties. Where possible, this consideration should be attempted at fact-finding stage. Extraction of any other relevant evidence that will impact on the case. This task is somewhat open-ended. It means gathering anything that is relevant to the case, much of which will be pointed out by various people who will be seen during the course of the investigation. Some evidence will be found by the investigator, particularly relating to e-mails, phone records, computer usage logs and other data contained in company information systems. Briefing authorised persons, preparing reports and generally arranging for the smooth running of the investigation.

The initial plan will help to clarify the allegation, identify the issues involved, work out the avenues of enquiry and establish the facts in question. It will also help to work out how to achieve the results and determine how any major decisions will be made, including the way evidence is collected and how other tasks are prioritised.

3.7 THE SPONSOR We have established TOR for the investigation and will need to identify a suitable manager to act as the investigating officer. There is a temptation to suggest we can now get going with the investigation. Wrong. What we now need to do is establish just who should be driving the investigation. This is probably the most important aspect of the investigation as it is this person, who we are calling the sponsor, who ensures that there will be a successful conclusion to resolving the problems we face. The board should be responsible for setting a policy on internal investigations, and it is the chief executive who should be asked to own and ensure that the policy is properly implemented. The sponsor for an internal investigation should be a senior manager from the area under review, someone who has sufficient authority to ensure the investigation is unhindered and that the results are fully acted on. The level of management should be at least two steps removed from anyone implicated by the problem to ensure they are impartial. If the investigation impacts

36

Internal Investigations

on the entire reputation of the business unit, then consideration should be made to identify a sponsor who is outside the operational area, again to ensure total impartiality. The sponsor has a number of set responsibilities, including to: • Secure a good understanding of the corporate policy on internal investigations. • Own the investigation and be responsible for the quality of the work, strategic decisions and final results. • Commission the initial fact-finding exercise in response to a notification that a matter has arisen that needs to be considered for formal investigation. • Review and approve the initial assignment plan. • Oversee the appointment of a suitable investigator having regard to the policy. • Ensure specialists (such as human resources) in different parts of the organisation provide an input wherever this is appropriate. • Deal with any obstacles that may arise to impair the ability to deliver an effective internal investigation. • Monitor any budget set for the investigation to ensure it is not overspent without reasonable justification. • Make impartial and reasonable executive decisions in response to the findings and reports prepared by the investigator. • Act as a source of advice and support so that the investigator does not have to work in isolation and is able to discuss any contentious matters with the sponsor. Some organisations nominate the Head of Human Resources as the main sponsor for those investigations that address the conduct of an employee and general staffing issues. Because human resource staff tend to be specialist advisors, where they act as sponsors they will need to secure an input from a senior manager who will be able to make executive decisions. Whatever arrangements are in place, all sponsors should have undergone suitable training, through say workshops or viewing an on-line presentation to ensure they are able to discharge the above responsibilities. For more complex and wide-ranging investigations, a monitoring panel may be established consisting of the sponsor, a human resource officer and a senior manager from the area in question. The monitoring panel will meet on a regular basis to oversee and make important decisions regarding the planning, performance and presentation of the entire investigation. Where there is no panel in use, the sponsor may ask a suitable staff member to act as a contact point regarding the investigation. This person can be used by the investigator as a friendly colleague, who is able to discuss the investigation whenever this might help the investigator deal with more difficult points.

Initial planning

37

3.8 APPOINTING THE LEAD INVESTIGATOR When we have worked out what we are looking at and how we will go about the task, the next stage is to work out who will conduct the investigation. The appointed person could be the same person who carried out the fact-finding work and derived the terms of reference for the investigation. If the fact finding was needed to determine the size, nature and scope of the investigation, it may only be after this has been done that we can work out who best should carry out the work. We have argued that the line manager is best placed to carry out most investigations that relate to the manager’s area of responsibility, unless there is a need to maintain a wholly impartial position. Where, for example, a customer complains about the way they were treated by a staff member, the unit manager may be asked to investigate the matter. If, after the complaint has been examined, the customer lodges a further complaint that the unit manager was extremely rude and dismissive, there may be a need to use someone from outside the unit to investigate the second complaint. Whoever carries out the investigation needs to be sure that they are equipped to do so, by considering five crucial factors: 1. No conflicts. The investigator should have no obvious or apparent conflict of interest that could undermine the credibility of the investigation. Where there are any matters that could influence the work, the person given the project should decline. A manager will not be able to undertake an investigation into whether second jobs held by employees are adversely affecting organisational performance when the same manager is financially dependent on a second job that they also hold. An employee cannot investigate a complaint against another employee whom they are romantically linked with. A senior officer cannot investigate whether value for money was gained from a project when they sat on the project board which involved approving aspects of the work. 2. Suitable skills. The investigator should possess the requisite skills to carry out the investigation. These skills should include the ability to organise the work, gather and analyse evidence and appreciate complex issues. Moreover, the investigator should have received suitable training based around the corporate standard covering the way internal investigations will be planned, performed and presented. 3. Emotional maturity. The investigator should have an emotional maturity that enables them to interview people, remain impartial and assume an air of credibility when dealing with experts and senior people. It can be difficult to deal with the emotional fallout from the investigation as different people may have their own vested interest in the outcome. The investigator should have a degree of gravitas so as to appear a credible witness if the matters being investigated need to be heard by an external third party or in any subsequent legal proceedings. One important attribute is based

38

Internal Investigations

around discretion, where the investigator is able to retain confidentialities and resist the real temptation to gossip about the events by talking to friends, family members and colleagues. 4. Sufficient clout. The investigator should have the time, resources and support that enables them to carry out a sound investigation. This means they will need a budget, access to all required information, explanations and expert advice as and when required. The person given the task should have an unimpaired line of communication to someone who has sufficient status in the organisation to ensure the work is seen as important and any reports are dealt with swiftly and effectively. 5. Open-minded. People tend to respond to first impressions, where they feel an issue that is presented to them is either essentially right or essentially wrong. An internal investigation is an opportunity to stand back from the ‘spin’ and find out the truth behind a claim. Being open-minded depends on being able to give information that is received later in an investigation the same consideration as that which was received at an earlier stage. Some people find it hard to move from a fixed position that is based on their first contact with a problem and the way it is presented to them. When considering the role of the appointed investigator it may be an idea to consider the five points we have listed above and decide whether or not this person fits the bill. We have set out what we look for in a good investigation and a good investigator. One point to remember: experience is important and it is a good idea to develop a pool of people who are able to conduct professional internal investigations and consider this task as part of a well-rounded manager’s role. Giving people a chance to carry out an investigation develops them and develops this skill as an asset to the organisation. We need to return to the decision on whether the line manager carries out the investigation or whether someone from a different unit is used for this task. We will need to carefully weigh up four points before making the right decision: • The need to ensure that the line manager’s responsibilities and authority are in no way undermined. • The benefits of using an investigator who understands the work environment and culture for the areas in question. • The extent to which the investigator has the necessary skills and experience to conduct a professional investigation. • The need to ensure the work is carried out in an impartial and fair manner. The decision is made more difficult when we suggest that the first two points support the line manager’s involvement, while the final two points tend to support the use of an outsider. In the final analysis, the last point on impartiality and fairness is probably the most important factor in the list.

Initial planning

39

3.9 OTHER ROLES AND RESPONSIBILITIES This short section sets out respective roles and responsibilities across the organisation. It is not enough just to prepare and publish a standard on internal investigations and assign a busy manager to carry out what may be seen as an onerous task of checking on and criticising colleagues within the organisation. What we need is a standard that ensures the tasks of solving problems and promoting corporate accountability are immersed within the organisation and everyone understands how they fit into the wider picture. One version of these roles and responsibilities is set out as follows: • The sponsor. This person owns the investigation and ensures it is carried out in a professional manner and the results are acted on. • The investigator. This person is responsible for conducting the internal investigation in line with the corporate standards and approved budget, while also ensuring that anything that impairs their ability to do so is brought to the attention of the assigned sponsor. • The line manager. The manager for the area affected by the investigation, if not conducting the investigation, should cooperate with the investigator and ensure their staff fully cooperate. The manager should also do everything in their power to ensure the investigator has access to all information and explanations that are relevant to the investigation. • The specialists. Specialist personnel from areas such as human resources, internal audit, information systems, security, legal and others should assist the investigator wherever appropriate. Specialists should bring to the attention of the investigator any matters that, armed with their expert knowledge, they feel should be addressed by the investigator to ensure the success of the investigation. • Witnesses. All persons employed by the organisation have a duty to provide evidence and statements to the investigator, which may assist the investigation. • The informant. Any persons supplying information regarding matters that should be subject to an internal investigation are required to cooperate with the investigator and provide evidence and statements which may assist the investigation. • The press office. This office, or equivalent team, is required to communicate internally and externally any information that needs to be publicised regarding the investigation, after having been appropriately briefed by the investigator and/or sponsor. • External partners. All partners, associates, contractors and other persons dealing with the organisation should be encouraged to cooperate with the investigator and provide evidence and statements which may assist the investigation.

40

Internal Investigations

All the above parties should have a clear idea of their roles and responsibilities in regard to internal investigations. They should abide by the set protocols on confidentiality and they should disclose any conflicts of interest that make it hard for them to discharge their responsibilities.

3.10 RESOURCES Corporate policies do not work unless they are supported by defined commitments from senior management. The easiest way to define this commitment is to set aside a budget for the implementation of the policy. When an internal investigation is launched, there must be a way of defining a budget for the work so that it can progress and does not become just a paper exercise for distracting attention away from the problem at hand. No one can tell when an investigation will be required, but there is a good chance that all medium and larger-sized organisations will have to carry out an investigation from time to time. As with all work products, there should be in place a policy on the efficient and effective use of resources in the pursuit of organisational objectives. In answer to the question ‘what budget do we need for this job?’, we will have to say ‘it depends’. The terms of reference that we discussed earlier will give us the aims and scope of the investigation. The bigger the scale, the more work required and the more the need to approve a formal budget. The smaller the investigation, the greater the opportunity to assign an investigator and simply use this person’s time as the main budget element. We can have a go at setting some kind of criteria to address the budgeting question as follows: • Small investigation. This task will simply be an extension of the factfinding stage and last a day or two for interviewing a couple of people. The assigned investigator will have to be extracted from their day job and it should be made clear that their time will be allocated to the investigation. There may well be little else to consider in terms of budget implications. • Medium-sized investigation. Where the investigation lasts for up to a week or even beyond we are talking about a bigger commitment in time and resources. Here the investigating officer will have to be taken off-line and there may be a need to find cover for this absence. There may be more work involved in briefing people, gathering evidence and talking to specialists and even external parties. It may be necessary to run on-line computer interrogations and seek external documentation to analyse and compare with other sources of evidence. Travel and expenses may be involved, where visits to witnesses or various company locations may be required to cover all the necessary tasks from the terms of reference. In this scenario official time off and an expenses budget may have to be approved to perform and conclude the investigation.

Initial planning

41

• Larger investigations. It is rare to use managers to undertake an extended investigation as these types of jobs will tend to be performed by in-house specialists such as internal audit or given out to brought-in consultants. Where a big job that lasts several weeks is given to managers we may need to develop a budget for the work. This may entail time off, support time from other employees or ad-hoc legal experts, travel and expenses, and even a separate office where the evidence can be stored and confidential conversations and team briefings conducted. The room can turn into a fully fledged incident room containing a visual display of the problem, pictures of people associated with the problem, along with flowcharts of related processes or incidents. Having said that, it would be better to employ a specialist investigator if we are dealing with a complex and time-consuming case. The assignment of resources depends on the nature of the issues and whether it is necessary to use specialist investigators. We can apply the ‘Role of Experts’ model that is set out in Figure 3.2 to help us make this decision.

Partnering Role 2 Complete Referral 1

Ad-hoc Tasks 3 No Role 4

100%

0%

Figure 3.2 The range of inputs from experts.

There are four main ways that specialist investigators from either inside or external to the organisation may be used: 1. Level 1: Complete referral. Where the investigation is either complex or very sensitive, it may be necessary to appoint a specialist investigator who will carry out the required work. As we have said earlier, issues such as major fraud, health and safety incidents, regulatory breaches and serious disciplinary cases will normally result in the use of professionally trained investigators. 2. Level 2: Partnering role. It is possible to appoint an internal manager and use a specialist investigator to work alongside this person to ensure the case is thoroughly investigated and any complex aspects are carefully handled. A case that may possibly turn into disciplinary charges or attract

42

Internal Investigations

the interest of external agencies such as law enforcement or the regulators may lead to this approach being used. 3. Level 3: Ad-hoc tasks. Some cases are investigated by an internal manager, but allow the use of a specialist for specific tasks and giving expert advice as and when required. Where there are, say, technical accounting matters to be examined, it is possible to bring in a specialist resource to perform the necessary tasks to be fed into the overall work of the internal investigator. 4. Level 4: No role. Here, the internal manager is expected to perform the entire investigation. The vast majority of straightforward cases can be carried out by a non-specialist person, say the line manager for the area in question, to avoid the need to set up a major investigation. It is a good idea to make a sensible selection from the levels of available options at the initial planning stage alongside the appointment of the lead investigator. Different investigations can become known as Levels 1, 2, 3 or 4 depending on the severity of the issues under review and the type of resources needed to perform the work. An investigation without a defined budget will be difficult to manage. Having established the scope of the project, we can ask for funding to suit. Progress reports on the investigation should contain simple reports that state what was approved for the investigation and what to date has been spent, along with a note on future spending needs so that the budget can be monitored.

3.11 ACCESS RIGHTS One issue that we need to sort out at the initial planning stage relates to good access rights for the investigator. We can follow a simple chain of logic to establish access rights as follows: 1. The board has a duty to establish a corporate policy on internal investigations. 2. The chief executive owns the policy and has to implement a suitable procedure to ensure investigations are carried out with due professional care. 3. An investigations charter will be agreed that sets out the full and unfettered access rights of an investigating officer backed by the chief executive’s office. 4. The investigating officer will be given a mandate to assume authorised access to all parts of the organisation in pursuit of the stated terms of reference for the investigation in question.

Initial planning

43

5. Any lack of cooperation by anyone in the organisation may result in an intervention by a senior manager and may act as a prima facie breach of acceptable standards of conduct. The above means the investigating manager has the full backing of the chief executive in carrying out the required tasks to complete the investigation. There are few people within an organisation, apart from the internal auditors, who have access to all parts of the business if this is required to discharge their responsibilities at work. An investigating manager is given great power if they assume equivalent access rights, having been assigned to the investigation. With this power comes a similar amount of responsibility. That is the need to be discreet, to maintain confidentialities, to restrict enquiries to the bare minimum, to protect the files and records gathered during the work and to refrain from abusing these given access rights. The investigator may need to access: • • • • • • •

People who work in the area in question. Customers, contractors and associates who need to be interviewed. Corporate and local information systems. Relevant documentation and records held by local offices and head office. Phone logs, data logs and e-mail records. Locations, buildings and offices where relevant evidence may be held. Any other sources of relevant evidence.

The planning stage provides a good opportunity to think through the information that is readily available, information that is harder to secure and other information that may be held by third parties – which is relevant to the inquiries.

3.12 PLANNING AND CONTROL We have said that the sponsor will want to ensure the investigation is carried out in a professional manner. Chapter 7 on quality assurance will go into some detail on ways that we can assess quality and set standards in this respect. Here we merely note that all those matters that we address during the planning stage will help us control the investigation and monitor the results. The bigger the investigation, the more the need to put in and use suitable controls. For larger investigations we can set out a control device as in Table 3.1 that breaks down the project into the Basic components that we have used throughout the book. For each stage of the investigation, the investigator will set out the sorts of tasks that are needed to get to the next stage and an estimate of the time

44

Internal Investigations

Table 3.1 Planning basic tasks Basic stage Begin investigation Ascertain issues Substantiate claims Infer implications Communicate results

Tasks involved

Budget hours

Actual hours

Comments

xx xx xx xx xx

xx xx xx xx xx

xx xx xx xx xx

xx xx xx xx xx

in hours that this might take. This information will accompany briefings and interim reports on the investigation and the results will be monitored by the appointed sponsor. A further key control over larger investigations is to set out the aims of the investigation and then brainstorm some of the risks that might impact on these aims and the progress of the entire investigation. The key is to work out how best to manage these potential risks as a way of exercising better control over the work, for example see Table 3.2. Table 3.2 Risk managing the investigation Aims of the investigation (from terms of reference): For example, investigate allegations of inconsistent use of the flexi-time scheme by team members in unit A. Risks (What impacts the aims?)

Risk assessment (Which risks are severe?)

RM strategy (How do we manage big risks?)

Uncooperative staff Poor staff morale

high medium

Breach disciplinary procedure Unclear procedures

high

Adverse publicity etc.

low

initial management briefing regular team briefings on the investigation contact human resources for advice ask audit to examine procedures no special action needed

medium

For these larger investigations, the adopted risk management strategy can be attached to the plan and approved by the sponsor. One final tool for controlling larger investigations is to establish a formal monitoring panel to oversee the results of the investigation as they emerge. The sponsor will chair the panel and will select two other parties, say a Human Resource officer and another manager. They would meet on a regular basis to hear briefing updates from the investigator and consider immediate action, and to endorse the tasks

Initial planning

45

for the next stage of the investigation. We can use the five Basic break points to coincide with briefings from the investigator to the monitoring panel and actions that the panel may take, as follows: • Begin investigation. Review and sign off the initial investigations plan. • Ascertain issues. Review interim reports on the way the issues have been defined and structured. • Substantiate claims. Review interim reports on the way evidence has been gathered in respect of the issues in question. Approve the latest budget. Deal with any access problems. • Infer implications. Review interim reports on the implications of the evidence and any actions and referrals as a result. Approve the latest budget. • Communicate results. Review the draft and then final report that concludes the fieldwork of the investigation and ensure suitable action is taken. There is no excuse for an investigation to go badly wrong if it is properly set up, reviewed and controlled. We should focus our efforts towards those investigations that are most sensitive and long-lasting to ensure the most appropriate control regime is applied. A poorly controlled investigation is a waste of time and resources as well as constituting what is likely to be a missed opportunity to enhance corporate accountability and improve the way we work.

3.13 PUBLICITY The first rule of an internal investigation is to observe confidentiality. An examination of conduct, errors, failures and other types of problems has great potential to cause embarrassment all round. We all have rights and an organisation has a duty to protect these rights and ensure it acts in a reasonable manner at all times. The whole point of an investigation is to examine the facts and arrive at the truth. At an early stage and during the investigation, it is dangerous to give an opinion before the work has been properly completed. Which is why people not involved in the investigation should not have access to any information that they are not authorised to receive. The investigator should not be allowed to divulge any information regarding the investigation unless it is required to facilitate the due progress of the work, or the person receiving the information has a statutory right to the information. While strict confidentiality is important, when people are aware that there is an investigation underway, and if there is some interest from the media or the regulators, then a lack of information will create a vacuum. This vacuum

46

Internal Investigations

may well allow misinformation to be spread across the organisation by all those parties who are interested in the results. Most people think an investigation is about finding evidence against someone but, in fact, it is about being in a position to prove or disprove the allegations/incident rather than seeking to victimise anyone. There is an argument for considering the term investigation and whether this is an emotive word that could be changed to say an internal review, examination, or inquiry to denote the impartial consideration of the facts rather than convey the feeling of a penetrating interrogation of certain individuals. Building on this theme, it is possible to consider changing the term investigator to say case officer, inquiry officer or lead reviewer. Whatever we call the investigation, and bearing in mind what we have said about the need to retain confidentiality, there are several pointers regarding the publicity aspects of an investigation that should be noted: 1. Decide on the vehicle for publicising the investigation as part of the planning stage. The spokesperson could be the Compliance Officer, Head of Human Resources, Chief Legal Officer, Head of Public Relations, Chief Internal Auditor, Deputy Chief Executive – or whoever is assigned this role in the corporate policy on investigations. As we outlined earlier, it may depend on the nature of the investigation, although it is a good idea to use a professional communicator as the lead spokesperson, say the Head of Public Relations or the Press Officer. 2. There are several parties who should be informed about the investigation at an early stage. The manager for the area in question (if an impartial manager is investigating) should be informed. We would also want to inform any party making the complaint that led to the investigation. Any employees whose conduct may be questioned during the investigation should be informed, unless the work is a forensic examination that may start out using a covert approach to avoid evidence being interfered with. (Although such forensic work will need to be referred to the internal auditors.) 3. Work out the formal reporting arrangements. The investigator will prepare an initial investigation plan and go on to prepare briefing notes and interim reports for all but very small investigations. There will be parties within the organisation who need to be included in the circulation list for these reports, and this list should be agreed and applied at the planning stage. Senior management for the area in question will want to be part of the reporting process, as will any specialist units that are affected by the nature of the work. The Head of Human Resources will want to ensure all action taken by the investigator fits with corporate staffing policies. The Head of Legal Services may likewise want to ensure due process has been observed.

Initial planning

47

The key consideration is that one clear message about the investigation is given from one source which observes the rules of communication and confidentiality. In one investigation into the conduct of a senior manager, the suspect’s legal representative spent months contacting different parties within the organisation to ask about the matter and managed to collect half a dozen inconsistent replies which they used to make formal representations that the investigation was both chaotic and unreliable. Good framing is important in communicating messages, as this means the organisation can build and present a clear picture of the issues that are being investigated.

3.14 A SHORT EXAMPLE The Chief Operating Officer has received complaints from several local offices that the risk registers that they have been told to compile are seen as a waste of time. The Head of Risk Management left the company several months ago and, until this post is filled, there is no one responsible for ensuring that the process for preparing and using risk registers works. The Chief Internal Auditor has indicated that she cannot look into this matter, due to a complex fraud investigation that will occupy audit’s spare time for the next few months. You have been asked to carry out a short fact-finding exercise into the complaints regarding the risk registers and report back to the Chief Operating Officer as soon as possible. As part of the fact-finding stage we will want to carry out several tasks, including the following: • Talk to the Chief Operating Officer to obtain their assessment of the complaints. • Talk to the two local managers who made the complaint and obtain a background to the way risk registers are prepared and why risk registers are seen as a waste of time. The fact-finding stage will result in an initial plan that will indicate: 1. The seriousness of the complaint. 2. The scope of the investigation into the current state of local risk registers. 3. The policy documents and procedures that will need to be considered during the internal investigation. 4. An outline TOR for the investigation covering the complaint, whether the problem is widespread and in what way the current situation can be improved. A proposed initial plan can be prepared from the above results, setting out the scale and scope of the problem and whether a full investigation should be

48

Internal Investigations

undertaken. Note that this example (to be called Example 10) will be revisited in later chapters.

3.15 TO CLOSE To close this chapter we should reinforce our view that all good investigations start with good plans. This plan is an initial attempt to direct the investigation, but may have to change as new developments emerge that could alter the shape and nature of the fieldwork. An investigation will pass judgement on the rights and wrongs of a state of affairs within an organisation. It would be ironic if the actual investigation itself was criticised along with our ability to provide any kind of judgement, even if the end conclusions are sound. Planning seeks to avoid this embarrassment by taking time out to work through what we should do and how it should be done. Our third Basic Principle is repeated below as follows:

BASIC PRINCIPLE THREE All internal investigations should start with a fact-finding exercise, before suitable terms of reference and the initial plan are prepared and approved.

BASIC GUIDANCE At the initial planning stage of the investigation you should consider the following 10-point guidance: 3.1. All internal investigations should start with a brief fact-finding exercise that seeks to determine the nature of the problem and how best it should be tackled. This fact-finding stage should result in a consideration of any actions that should be taken immediately to protect the organisation from any unmitigated risks that have become apparent. 3.2. The results of the fact-finding exercise should lead to a detailed TOR for the investigation that will define the issues to be addressed and the tasks that will be undertaken – which should be formally approved. 3.3. The TOR should take on board any sensitivities emerging from the issues that will be investigated that affect the way the work will be carried out and the importance of the resulting report. 3.4. A senior manager should be appointed sponsor to the investigation to ensure the work is completed to a professional standard, consistent

Initial planning

3.5.

3.6.

3.7.

3.8.

3.9.

3.10.

49

with other corporate policies and to formulate any executive decisions that result from the investigation. A suitable representative should be assigned the task of providing, where appropriate, internal and public statements regarding the investigation and its progress. The investigation should be assigned to a person with suitable skills, emotional maturity, sufficient status and no conflict of interests who is best placed to conduct a professional job. Budgets and resources should be assigned to the investigation to reflect the scale of the work involved, and the possible use of specialists/experts and these budgets should be monitored by the sponsor. The investigator should be given access rights to ensure all relevant evidence is secured, and all employees and associates should be required to cooperate with internal investigations. Control devices based around monitoring of hours spent on various stages of the investigation and progress reports to the sponsor, or monitoring panel, should be used to promote the efficient use of resources. Investigations that will last more than a week should be risk-assessed to deliver a suitable risk management strategy to improve the chances of a successfully concluded investigation.

Note that Chapter 7 contains several checklists to support the abovementioned guidance. Having developed a good working plan, we can now get involved in the detailed fieldwork which starts with assessing the issues. The main fieldwork stage of the investigation is tackled in the next chapter.

4 Basic fieldwork

Fieldwork is the main part of any investigation. The fieldwork stage is about taking the initial plan that we discussed in the previous chapter and putting this plan into action. It is about getting into detailed evidence-gathering mode and finding out what happened, why it happened and what needs to happen to make things right – as far as possible. One point we must make clear is that our vision of an investigation is not based on the adversarial judicial concept of fighting a win or lose case against a defendant, except on those rare occasions when the investigation leads to disciplinary proceedings. We see investigations as an opportunity to establish what happened, and to use this information to forge a way forward, that hopefully benefits all parties. The adversarial approach can spread fear and resentment across the organisation and may, in the end, help no one. Our approach is designed to clarify issues and keep the organisation moving forwards in a positive manner. When starting fieldwork, it is an idea to keep in mind the approach to carrying out the investigation and try to avoid excessive degrees of confrontation unless it is necessary. This chapter is longer than the others because we deal with three aspects of the five Basic components and, to help the reader, we have split the chapter into three main parts. Each part contains several illustrations that seek to demonstrate how internal investigations may be applied in practice. Each chapter of the book will identify a Basic Principle and our fourth such principle is stated as follows:

BASIC PRINCIPLE FOUR All internal investigations should involve assessing issues and gathering sufficient reliable evidence to substantiate the claims, so that the implications may be ascertained.

4.1 WHY FIELDWORK? Whatever the plan says we need to address to perform the investigation, it is the fieldwork that will determine the quality of the evidence that we secure to help us prove or disprove the issues in question. Even if the investigator has arrived at a firm conclusion, if there is no clear methodology for getting the results, it will be hard to verify the work. If there is no straightforward

52

Internal Investigations

documentation that shows how the conclusions were arrived at, what may have been a good job may be seen by others as unfair. Good, robust and clearly evidenced fieldwork is important, and we hope to deliver an approach to this task that follows the Basic standard. The Fieldwork Summary Schedule, and the scheduling of detailed evidence, sits right in the middle of our template because of its importance, as shown in Figure 4.1. Corporate Accountability

RESULTS

TOR INITIALPLAN PLAN INITIAL TOR: TOR: Diary of the Investigation DATE ITEM

TASK

BASIC STAGES:

Begin Investigation

DATE

Sign-Off FIELDWORK –SUMMARY SCHEDULE FIELD WORK –Summary Schedule TOR: TOR: ISSUES

EVIDENCE

IMPLICATIONS

Evidence Schedules Issue: Aim

Ascertain Issues Substantiate Claims Infer

Implications

Technique Results

Quality Assurance REPORT REPORT Draft/Final DRAFT/FINAL TOR

Communicate

FINDINGS

Results

Timeline of Events DATE EVENT

Risk Management Impacts

RESULTS

TOR

Figure 4.1 The position of fieldwork scheduling in the template.

As already mentioned, we have divided this more detailed chapter into three parts to represent the three Basic elements that are dealt with here: • Part 4.I: Ascertaining the issues • Part 4.II: Substantiating the claims • Part 4.III: Inferring the implications

PART 4.I ASCERTAINING THE ISSUES 4.2 CONSIDERING THE ISSUES IN MORE DETAIL The fact-finding stage that is part of the planning process will have isolated the issues that we should consider during the investigation and how we might

Basic fieldwork

53

go about the fieldwork. To use the Basic approach we need to populate the first column of our Fieldwork Summary Schedule that relates to the issues we need to delve into and find evidence about. The way we define the issues in question will depend on the nature of the investigation and what we are looking at. If we have completed the fact-finding stage with care, we may arrive at various contentions, suppositions or claims that form the basis of the investigation. Taking a step back, we argue that the Basic approach works on the following three dimensions that are part of the Fieldwork Summary Schedule: • Column 1. Determine the supposition or claims (we call these “issues”) – what is the nature of the problem? • Column 2. Secure sufficient reliable evidence to work out whether the claim is correct or not – does the evidence confirm that we actually do have a problem? • Column 3. Draw conclusions on the causes of the problem and possible remedies – how do we sort out the problem? If we can complete the Fieldwork Summary Schedule properly then we will have actually performed the investigation. We understand the claims, which we have checked out, and have arrived at our conclusions. Specifying the issues is important, as this will mean we have criteria against which to look for evidence supporting or refuting the claim, or which proves inconclusive. For our Basic approach to investigations, issues can be anything that needs investigating, which can include, for example: 1. Claims by one or more persons regarding an incident or series of events. 2. Claims by one or more persons regarding failings in the way an activity was undertaken. 3. Concerns that have come to the organisation’s attention regarding the integrity of a business process. 4. Non-routine problems that require some level of intervention to remedy. 5. Complaints that suggest the inappropriate or unfair treatment of a defined party. 6. Allegations of breach of procedure that have not so far been addressed. Items arising from one or more of the above will be considered during the fieldwork stage of the investigation, as a development of the general terms of reference that would have been set out at the planning stage. One way of summing up the issues being investigated is to use the generic concept of risk, to highlight the fact that we are dealing with a potential risk that would not be addressed other than by an internal investigation. The investigator will want to clarify the issues by: • Interviewing the person initiating the matter. • Considering corporate procedures that impact the issues in question.

54

Internal Investigations

• Examining the local procedures for the area in question which affect the issues in question. • Taking all other steps to ensure there is a good understanding of the issues. Most issues that need to be investigated result from one of four main causes: 1. 2. 3. 4.

Poor systems. Poor relationships. Poor conduct. Poor communications.

The idea is to carry out sufficient background work to ascertain what exactly is being investigated, mainly by noting all the claims, processes and operations that come into the equation. Remember, some of this work should have been completed at the earlier fact-finding stage.

4.3 UNDERSTANDING THE PROCESSES AND OPERATIONS We will need to be clear about the context of the issues and how they sit within the part of the business that they relate to. Most internal investigations concern people, their actions and their relationships. But there are occasions when the investigation relates to a process that has failed or led to a complaint. When considering these types of issues we will want to understand the processes and operations involved and who is responsible for what part of the business. An investigation into a complaint that an operator failed to fulfil a promise to contact a worried customer will need to ask questions about the way operators work with customers and whether they are able to deal with older phone enquiries. It may be that calls to mobile phones are blocked or that the operator may have been told to pass outstanding customer enquiries to the next shift of operators. Ascertaining the issues includes ascertaining the relevant processes or procedures for: • The management chain for the area in question. • The team members who work in the area in question and their respective responsibilities. • The local processes for the area in question. • Links between the area in question and other parts of the organisation. • Whether there are any similar problems occurring elsewhere. • Any local disputes or relationship problems that impact the issues. When interviewing people to obtain more details of the issues in question, try to obtain background information on the work area and how the business

Basic fieldwork

55

processes operate together. A problem with the way a performance appraisal system is being operated in one work area will mean finding out how team and individual targets are set and appraised. The investigator will also want to know how the appraisal system fits in with the bonus system and training schemes that are aimed at improving performance. One useful tool is to prepare a simple diagram of the process in question. It is possible to set out the sections in the organisation that get involved in each stage of the process and note the actions of each section team, as illustrated in Table 4.1. Table 4.1 Investigator’s note on client ordering process System stage

Dept. A (agent)

Dept. B (goods)

Dept. C (accounts)

1. Call from client 2. Order placed 3. Client queries 4. Settle account Etc.

Take details Set up order Deal with queries

Check availability Arrange delivery Assist agent

Open a/c Process a/c Assist agent Send a/c and chase

4.4 PRACTICAL EXAMPLES One way of getting to grips with the Fieldwork Summary Schedule is to use a few simple examples to illustrate how we can use the Basic approach to isolate and address issues and then develop clear suppositions that we need to investigate. Example 1. You have been asked to investigate an increase in sick leave in several parts of the organisation that has been identified by the Head of Human Resources. Ascertain the issues 1. Sick leave has increased disproportionately in offices x, y and z. 2. Returns are being incorrectly processed. 3. Managers are failing to manage sick leave as per corporate procedures. 4. Etc.

Substantiate the claims

Infer the implications

56

Internal Investigations

Example 2. You have been asked to investigate employee X’s claims of bullying by a team manager which appear to have been ignored by the business unit manager. Ascertain the issues

Substantiate the claims

Infer the implications

1. Employee X has a poor relationship with her manager. 2. Employee X was bullied by her line manager. 3. The actions perceived as bullying fit with the corporate anti-bullying policy. 4. The line manager is aware of the anti-bullying policy. 5. Etc. Example 3. You have been asked to investigate irregularities in the overtime claiming system in office C that have been indicated by an ex-employee. Ascertain the issues

Substantiate the claims

Infer the implications

1. Overtime procedures in office C are not applied properly. 2. Some overtime claims do not reflect actual hours worked. 3. Employees are breaching the disciplinary code of conduct. 4. Etc.

Example 4. You have been asked to investigate claims that longer-serving team members are adhering to a more beneficial set of working practices than newly appointed staff as a result of a long-standing arrangement agreed with a now-retired senior manager. Ascertain the issues 1. Working practices for long-serving staff agreed with old manager. 2. New staffers are disadvantaged due to fewer privileges.

Substantiate the claims

Infer the implications

Basic fieldwork

57

3. Old agreement cannot be changed as it is part of the conditions of employment. 4. Etc.

Example 5. You have been asked to investigate a complaint from a customer that a quotation for a vehicle repair from repair shop A was inflated and included work that was not required. Ascertain the issues

Substantiate the claims

Infer the implications

1. There was a vehicle repair estimate made for the complainant in question. 2. The repair estimate was inflated to an unreasonable level. 3. The action to inflate the estimate was unreasonable and breached company policy. 4. Etc.

Example 6. You have been asked to investigate a concern that the company was losing a large number of cases of unfair dismissal at employment tribunals. Ascertain the issues 1. A large number of cases for unfair dismissal have been lost at employment tribunals (ET). 2. The cases were lost because of poor preparation by the company. 3. The cases were lost because of poor management of staff discipline. 4. Etc.

Substantiate the claims

Infer the implications

58

Internal Investigations

Example 7. You have been asked to investigate a concern that the large number of e-mails being sent around the organisation is having an adverse effect on productivity. Ascertain the issues

Substantiate the claims

Infer the implications

1. There is a high level of e-mails being sent around the company. 2. Many e-mails are unnecessary. 3. The level of e-mails is adversely affecting performance. 4. Etc.

Example 8. You have been asked to investigate a complaint from an employee that a line manager is giving good performance reports to workers based mainly on personal friendships. Ascertain the issues

Substantiate the claims

Infer the implications

1. There is a marked difference between performance for different team members. 2. The difference in reports cannot be explained by performance factors only. 3. Better reports are given by the manager to personal friends. 4. Etc.

Example 9. You have been asked to investigate an industry-wide report which claims that many financial consultants are pushing investment products that are not suitable to their clients, which may result in an investigation by external regulators later on in the year. There are no reports that this practice is occurring in your company. Ascertain the issues 1. The process for selling products is robust and fair to the customer. 2. The process is being used properly by sales staff. 3. Customers are not disadvantaged by methods used by sales staff. 4. Etc.

Substantiate Infer the the claims implications

Basic fieldwork

59

Example 10. You have been asked to investigate complaints from several local offices that the risk registers they have been told to compile are seen as a waste of time. Ascertain the issues

Substantiate the claims

Infer the implications

1. There is dissatisfaction from some local offices regarding the need to submit risk registers (RRs) to head office each month. 2. The current risk registers are failing to ensure risk is managed to an acceptable level. 3. The corporate standard on preparing and using registers is in need of improvement. 4. Etc.

Example 11. You have been asked to investigate a complaint by a contractor against the procurement manager regarding unfair treatment, which meant the contractor’s bids were not being properly considered by the procurement manager. Ascertain the issues 1. The complainant has had bids rejected by the procurement manager. 2. The bid rejections were unfair.

3. The company has not received value for money because of the unfair rejections. 4. Etc.

Substantiate the claims

Infer the implications

AS SOON AS THE INVESTIGATION STARTED, A SECOND CONTRACTOR APPROACHED THE INVESTIGATOR AND CLAIMED THAT THE PROCUREMENT MANAGER HAD DEMANDED A BRIBE FOR APPROVING HIS BID. THE INTERNAL INVESTIGATION WAS ABORTED AND THE FILES SENT TO INTERNAL AUDIT TO LAUNCH A FULL FRAUD INVESTIGATION

60

Internal Investigations

Example 12. You have been asked to investigate an allegation that a voluntary organisation funded by your organisation is misusing the funds. Ascertain the issues 1. The voluntary organisation (VO) receives substantial funding. 2. The VO submits reliable audited accounts.

Substantiate the claims

Infer the implications

THE FACT-FINDING STAGE HAS IDENTIFIED SEVERAL COMPLEX ISSUES THAT SHOULD BE INVESTIGATED. THE INTERNAL INVESTIGATION WAS ABORTED WITH A RECOMMENDATION TO EMPLOY AN EXTERNAL CONSULTANT WHO SPECIALISES IN THESE TYPES OF COMPLEX INVESTIGATIONS

3. The VO is misusing funds and is financing unauthorised projects/spending. 4. Etc.

4.5 DIARY OF THE INVESTIGATION The template in Figure 4.1 contains a Diary of the Investigation and this tool will now be explained. Most investigations are sensitive. By their very nature, they will tend to cause some degree of concern about the true purpose of the investigation, whether there is a political agenda that affects the direction and results, and whether the results will hurt anyone working for the organisation. It does not matter how carefully the work is conducted or how many standards and procedures cover the way investigations are conducted, there will always be sceptics who will cast doubt on the veracity of the results. Moreover, some investigations can get quite complex as different sources of information, some of which may appear contradictory, come into play. In recognition of the difficulties inherent in many investigations, the investigator should maintain a diary of the investigation. Everything that happens during the investigation should be carefully logged, particularly where the event relates to a decision or situation where it was not possible to make a decision. For example, the initial plan may indicate that we need to contact a key witness and on attempting this task, it may be the case that the witness in question has gone abroad and cannot be contacted. After several

Basic fieldwork

61

attempts, the investigator may decide that it is impossible to follow this lead when even a phone interview cannot be arranged. At first sight, when examining the way the investigation was carried out, it may not be clear why this potential witness was apparently ignored. The diary of the investigation will show the efforts to make contact and the decision not to pursue the matter, perhaps confirmed by the sponsor. The diary of the investigation will record: • • • • • • • • •

People seen and cancelled or adjourned meetings. Meetings attended and what was agreed. Attempts to contact people. Advice obtained from internal and external parties. Important phone calls made and received. Documents examined. Documents extracted or copied and where they are stored. Information given to authorised persons. Decisions made about the investigation and any consultation and approval obtained. • Dates briefing notes prepared and reports or requests for information sent out. • Any other matters that significantly impact the investigation. The diary of the investigation should pay particular attention to any incidents, conversations or meetings that are not recorded elsewhere in the investigations file.

4.6 EXPLORING EXAMPLE 10 We can explore Example 10 in further detail to examine how the ascertaining issues stage of the Basic approach to investigation can be applied: Example 10. You have been asked to investigate complaints from several local offices that the risk registers they have been told to compile are seen as a waste of time. Ascertain the issues 1. There is dissatisfaction from some local offices regarding the need to submit risk registers (RRs) to head office each month.

Substantiate Infer the the claims implications

62

Internal Investigations

Example 10. Continued Ascertain the issues

Substantiate Infer the the claims implications

2. The current risk registers are failing to ensure risk is managed to an acceptable level. 3. The corporate standard on preparing and using registers is in need of improvement. 4. Etc. We could ascertain the above listed issues 1 to 3 in some depth by carrying out the following work: • Carry out some general work on the internet on best practice in preparing and using risk registers as a way of obtaining background material for the investigation. • Obtain and study a copy of the corporate policies and procedures for risk registers that must be complied with by local offices. • Interview the team that prepares and implements the material on risk registers and obtain background information on the way the procedures were developed. • Consider the available material on risk registers placed on the intranet. • Re-interview the local offices that had made the complaint about the failings in the way risk registers were being used and note the problems they are experiencing. • Obtain copies of the most recent local risk registers that have been filed with head office. The above will enable the internal investigator to prepare issues 1 to 3 and any other concerns that will be used to drive the work, and identify the type of evidence that will need to be secured in the next stage of the investigation.

4.7 MOVING TO THE NEXT STAGE We have interviewed people and studied documentation and procedures to gain a good understanding of the issues that we are investigating. We have

Basic fieldwork

63

also obtained an insight into the context of the investigation and the type of environment that we are dealing with. The result is a series of issues, suppositions or claims that we now need to consider in more detail. That is, we need to move into the next stage of substantiating the issues by securing relevant evidence that supports or does not support the claims in question. In the next part of this chapter, we will move on to the second column of our Fieldwork Summary Schedule and deal with evidence gathering to substantiate the claims.

PART 4.II SUBSTANTIATING THE CLAIMS 4.8 CONSIDERING CLAIMS We have formulated an initial plan and ascertained exactly what issues we are looking at in terms of our investigation. The next stage of the Basic approach is to substantiate these claims. That is, to gather the all-important evidence that forms the main platform for all good investigations. Poor investigations start with a rough idea of what we should consider, then a series of interviews to get views on the problem – before the investigator prepares a short report on conclusions and suggested actions. Poor investigations miss the ‘S’ in the Basic approach, in that they do not seek to uncover solid evidence that supports or refutes the contentions in question. Good investigations, on the other hand, have to cover all five aspects of the Basic approach where we plan, define the problem, secure evidence and then draw conclusions that are properly communicated.

4.9 WHAT IS GOOD EVIDENCE? Good evidence is material that is secured in line with the terms of reference for the investigation that seeks to prove, disprove or provide further insights into the issues in question. Good evidence should meet the following broad criteria: • Openness. Gather, compile and use the evidence in a spirit of openness that means the reason the information was secured can be explained. • Sensitivities. Be sensitive to the views and concerns of individuals connected with the investigation and gather the evidence in a way that reduces rumours and that minimises disruption to the business. • Logical and rigorous. Gather evidence in a way that ensures all the relevant information is obtained and not just what is offered to the investigator.

64

•

• • •

•

Internal Investigations

There should be a logical approach to this task that seeks to avoid claims that there is some bias in what was examined. Flexibility. Explore issues and do not be overly judgemental. Evidence should speak for itself and it should be viewed in an objective way that does not prejudge the results. One item of evidence may lead on to other sources as a chain of events is established, which may act to change the direction of the fieldwork. Objectivity. Evidence can support an allegation or it may point to failings in the allegation. The aim is to seek evidence that throws light on whether something is true or not. Speed. Work quickly. Try to obtain the evidence in a timely manner so that it remains intact, but not so as to cut corners or affect the quality of the material. Method. Use a suitable method. Develop a clear process for gathering evidence that makes sense and leads to some consistency. The process should start with an aim, an objective method of ensuring all relevant evidence is secured and a way of analysing the results that have been agreed beforehand. Materiality. Where significant new evidence is uncovered, the investigator must stand back and decide whether or not the new results point to the need to establish a separate investigation using specialist people.

When the investigator has arrived at the substantiating claims stage of the investigation, it is a good idea to think through the above criteria and make sure all information and explanations fit with the list of what makes good evidence. Evidence has different qualities and some types have more impact than others. A brief note on the nature of evidence follows: 1. Direct evidence. This is straightforward evidence that, when presented, will establish the truth regarding the facts in question. 2. Circumstantial evidence. This is indirect material that establishes some degree of likelihood of the facts being established. 3. Hearsay evidence. This is an account of something that was said to the person providing the evidence. It may be unreliable and since the actual source is not present, it cannot be challenged. 4. Relevant evidence. This is evidence that has a direct bearing on the case and which tends to prove or disprove the facts. 5. Corroborated evidence. This happens when one source of evidence confirms another source of evidence and thus makes for much more reliability. 6. Authenticated evidence. This is where we are able to establish that an item of evidence is in fact genuine.

Basic fieldwork

65

It is always better to secure direct evidence that is both relevant to the issues at hand and which has been corroborated by other reliable evidence. A claim that a manager screamed at a staff member should be confirmed by interviewing anyone who would have overheard the noise – to try to confirm that the claimed incident actually occurred.

4.10 SOURCES OF EVIDENCE We have considered the nature of evidence but we now need to think about how we get hold of good evidence. There are many different sources of evidence in a typical organisation: • Interviews. The best way to find out what happened in most scenarios is to simply ask everyone who might have knowledge of the issues in question. This may be during formal interviews or even as comments that are made to the investigator. Interviewing is considered in more detail in Chapter 5. • Processed documents. Documents such as invoices, purchase orders and receipts will have to be assessed for reliability and we would want to know about the document’s location, who created it and the business process that it derived from. • Formal statements. People who have knowledge of a specific incident may be asked to provide a formal statement. They should explain their job and, in their own words, describe in chronological order what they know. They should write in the first person and note as exhibits, any documentations that they refer to. We will want to assess each witness for their credibility and whether they are able to provide consistent information that is not unduly affected by lapses in memory, or any conflicts of interest. Statements are considered in more detail in Chapter 5. • Phone interviews. These can be used where there is no other alternative, if say the person in question is simply not available or has moved abroad. • Company policies, procedures and rules. These documents may be used to determine the correct procedure, or at least what the documented method requires. This source of evidence should be used with care since people do not always follow set procedures, and at times the procedures in question can be outdated. • Diaries, timesheets, expense claims and movement logs. Personal records can be used as evidence of transactions or of evidence of what the person preparing the record has set out as the stated transaction. • Expert statements. In-house and external professionals can be used to supply their opinion on the issues in question. An expensive component

66

• • •

•

•

•

•

•

Internal Investigations

may have been ordered without securing quotes from the marketplace on the excuse that there is only one reliable supplier. A procurement expert may be used to confirm whether there is only one source for the item in question. Budgets. Relevant budgets can be used to establish what can be spent on approved expenditure and trends in current spending patterns. Staff information. Employee notices, intranet guidance and notes of management and staff meetings may be used to assess the information that has been made available to employees. Prior complaints. The complaints database can be a good source of information as it can indicate patterns of past problems and failings to respond to concerns that have been identified. The information can also provide contact details of third parties who may have information that can assist the investigation. Human resource files. This source may provide information on absences, disciplinary conduct, staffing issues and important background information on specific employees, including their start dates, qualifications and work experience. Security reports. Most information systems retain activity logs that record the interaction between employees and corporate systems. The reliability of these logs will have to be established so that it can be determined that the person who is shown on the log is actually the person operating the input device. Phones, e-mails and business information systems may all contain relevant information so long as the investigator has permitted access under data privacy arrangements. Published reports. Reports from the regulators, consumer groups, internal audit and national research can all be used to provide background information and statistical data on national averages and trends. When examining reports we will need to consider their date, whether professional standards were applied and whether the research/review was commissioned by persons with a vested interest in the outcome. Compliance checks. This is an important technique which seeks to answer the question, are the routines that are required by our set procedures being adhered to by our staff? If staff are supposed to update personal records when the customer calls in to supply changed details, we can check whether logged calls have been input onto the relevant files. It could be that some staff do not bother to comply because they are too busy or just do not care, and a key control over data accuracy will have lapsed. Re-performance. This technique involves reworking a transaction to check whether it was performed properly in the first place. If two documents, say an order and a goods delivery note, are meant to be matched

Basic fieldwork

67

before processing, we can re-perform the matching exercise to make sure this was the case. • Data mining. Company information systems contain a great deal of relevant information that could assist the investigator. This data can be extracted to look for evidence based on a relationship between the data that could reveal problems such as collusion between persons inside and outside an organisation. The technique could also reveal which websites are most accessed and by which teams. Again, we will need to clear the extraction with the Data Protection Office to ensure it meets with the accepted code of practice for data matching and other such techniques. • Forensic techniques. Desk searches, covert surveillance exercises, phone taps, CCTV scans, criminal records and credit rating searches, bin searches and capturing the image of the computer hard-disk drive for specific employees should not be applied by the non-specialist internal investigator. These are the preserve of specialist fraud investigators. There are various techniques that are borderline ‘dubious’ and these are dealt with in the next section.

4.11 DIRTY TRICKS? The Basic approach is designed for straightforward investigations that normally need little more than focused interviews and a close examination of any documents that are relevant to the enquiries. Occasionally, there are difficult aspects of fieldwork that call for a few tricks to be applied by the investigator, but not so-called dirty tricks. Unconventional methods for gathering evidence should be avoided as the province of experts who, for example, have a remit to obtain phone taps under a court order or who use facilities given by the Regulation of Investigatory Powers legislation. Mobile phones issued by companies can be tracked through an application which can provide an electronic map of an employee’s precise movements, although this facility is seen by some as breaching privacy rights. There are more acceptable, but nonetheless unusual, techniques that can be applied to secure those aspects of the available evidence that are not readily accessible. Some examples follow: • Customer service. If the investigation is concerned with the way customers are being treated in a business unit or call centre, it is possible to test this supposition. The investigator can pose as a customer to record the time taken to answer the phone, or the way they were assisted by the agent. • Phone logs. If the investigation is concerned with the interaction between two parties, or the time spent on private and work-related calls, phone

68

•

•

•

• •

Internal Investigations

logs may be used to provide the relevant information. Access to recorded phone conversations will be restricted and the organisation’s Data Protection Officer or Legal Officer will have to be approached to approve this facility. Computer access logs. The interaction between an employee and the corporate systems, or internet use, can be traced through the logs that are retained on activity levels. Remote access from out-of-office locations can also be recorded and extracted for later examination. Close circuit television. CCTV will record the movement and actions of people and cars, and this information can be used to confirm the whereabouts or movements of someone, although the quality of the images may be inconsistent. Key pad logs. Access devices to buildings and offices can be controlled through key pads and people can be traced when they use their swipe card in conjunction with general code numbers. People can swap their cards even if this practice may not be allowed. Tailgating occurs where someone goes through an access area without swiping their card as they enter behind someone who has already swiped. Most access controls do not record departures, which may be effected through a simple release lock. Attendance records. Annual leave, timesheets and manual records kept by front desk buildings security can provide additional information on staff movements. Other. If the investigation concerns the way a work practice is being applied, it may be possible to observe this practice in operation to determine how it works and whether it is being applied properly. Covert surveillance by following someone to observe their movements and associations, or static surveillance from a set observation point, come under those techniques that should be reserved for the experts. The use of an informant who is ‘planted’ in a work unit to check alleged breach of procedure is another dangerous technique which is better left to the experts. There are less tricky techniques that can be considered by a non-specialist internal investigator. A chain of supermarkets may launch an investigation into the sales of alcohol to under-aged teenagers by getting youngsters to try to buy these items at various retail outlets owned by the company. An ex-employee may allege that some garages in an established national network of car repair shops are doing unnecessary work on vehicles brought in by unsuspecting customers. This claim may be confirmed by having cars that are known to be in good condition checked into a sample of these repair shops to assess whether any suspect practices are occurring.

The range of unusual tests that investigators may carry out is limited only by one’s imagination. As long as these tests are legal, reasonable, worthwhile and have a clear impact on the investigation, some thought may be given

Basic fieldwork

69

to using unusual, but not dubious, methods to gather the required evidence. Some care should be taken with the way evidence is obtained, as the methods that were used may have to be disclosed in the report and in any referrals of the case to third parties. If the planned method will cause great embarrassment to the organisation if publicised, it may be better not to go ahead with this method of gathering the required evidence.

4.12 USING SAMPLES We often need to extract data from a large file to get an idea of the extent of problems resulting from the issues that have been investigated. If staff in an after-sales team complain that information held on their manual records differs from data they are given from a call centre that is used to deal with customer enquiries, we will need to check this complaint. The database may contain some 5000 customer accounts. One way is to select a sample from the database and check the level of errors. The idea is that the extent of errors in the sample can be used to estimate the extent of errors in the entire system, so that the overall scale of the problem can be assessed. For example: • It is possible to take, say, 50 accounts from this database and then check them against the manual records. • It is equally possible to select only 10 accounts to save time. Much will depend on the time available and the potential severity of the problem. • If we examined all 5000 accounts from the database our knowledge of the scale of the problem would be 100% reliable, but very time-consuming. • Depending on the sample size, the results will range from very precise (for a large sample) to only a guess (for a small sample). Each item in the database should have an equal chance of being selected to ensure that any sample is fair and not open to bias. To instil this randomness in the sample, it is possible to take the total number of accounts, divide this by the sample size (call the result n) and then select every nth account. It is also possible to consider using statistical sampling, where the sample size is based on the size of the entire database and the degree to which the investigator needs to be certain that the results will fall within set parameters of accuracy. The degree of certainty of the results allows the investigator to make claims regarding the extent of errors in the entire database based on the extent of errors in the sample that was examined. The average result from the sample will need to be multiplied by the total number in the population to give an estimate of the total number of errors. Many data extraction applications have an in-built statistical sampling facility, where the total records and the degree of certainty can be input to obtain a recommended sample size.

70

Internal Investigations

Where the investigator’s report will be seen by managers who are comfortable with scientifically presented material, they may appreciate the use of a statistical sample, whereas in most organisations a reasonable sample based on the investigator’s judgement will normally suffice.

4.13 SETTING AN AIM FOR THE EXERCISE We have discussed the nature of evidence and the great variety of sources of evidence that will be available in most organisations. We now need to provide a structured way of using the best available evidence to substantiate the issues/claims that form the basis of the investigation. One useful approach to providing structure and method in our evidence gathering is set out as follows:

1. Arrive at the aim of the exercise. We have defined the claim, and each exercise for gathering evidence will start with a clear objective. What is it that we are seeking to substantiate? 2. Develop a strategy for securing the required evidence. If we are seeking to confirm a claim that data is not being entered properly onto a specific database, then one strategy would be to download a small sample of transactions from period x to y and assess whether the relevant data has been correctly input or not. 3. Carry out the evidence-gathering exercise and schedule the results. Many tests are designed to assess whether the actual results fit with the expected results. In our database example, we would list the correct data we expect to find and assess the download against the data that was extracted to prove whether the claim of input errors is supported or not. 4. Draw conclusions from the exercise by stating whether or not the results support the claim being examined and enter the results on an Evidence Schedule that is set out in our Basic template in Figure 4.1. 5. Summarise the results and note them on the Fieldwork Summary Schedule, cross-referencing the details back to the evidence schedules. 6. Carry out the next evidence-gathering exercise and prepare a new Evidence Schedule. That is, return to point 1 of this list.

Using the six-stage approach above, we can carry out a series of evidencegathering exercises until we have enough information in our Fieldwork Summary Schedule to enable us to draw an overall conclusion for each of the various issues under examination.

Basic fieldwork

71

4.14 FURTHER PRACTICAL EXAMPLES One way of getting to grips with the Fieldwork Summary Schedule is to develop the simple examples we used earlier to illustrate how we can use the Basic approach to substantiate the claims resulting from the issues that we are investigating. Example 1. You have been asked to investigate an increase in sick leave in several parts of the organisation that has been identified by the Head of Human Resources. Ascertain the issues

Substantiate the claims

1. Sick leave has increased disproportionately in offices x, y and z. 2. Returns are being incorrectly processed.

Company returns show 20% increase in units x and y. Unit z is at company average. Coding used in unit x incorrectly puts flexi leave down as sick leave. Unit y has two people on long-term sick leave. Unit x manager not aware of problems caused by errors made by a casual admin worker. Manager of unit y has not referred two long-term sick leave staff to human resources as required by company policy. etc.

3. Managers are failing to manage sick leave as per corporate procedures.

4. Etc.

Infer the implications

Example 2. You have been asked to investigate employee X’s claims of bullying by a team manager which appear to have been ignored by the business unit manager. Ascertain the issues

Substantiate the claims

1. Employee X has a poor Team members and manager relationship with her confirm that there is not a poor manager. relationship.

Infer the implications

72

Internal Investigations

Example 2. Continued Ascertain the issues

Substantiate the claims

Infer the implications

2. Employee X was bullied by her line manager. 3. The actions perceived as bullying fit with the corporate anti-bullying policy.

Claims of severe treatment confirmed by two team members. Severe treatment was prompted by performance issues as a one-off incident. Manager apologised soon after the incident. 4. The line manager is aware of Confirmed by line manager. the anti-bullying policy. 5. Etc. etc.

Example 3. You have been asked to investigate irregularities in the overtime claiming system in office C that have been indicated by an ex-employee. Ascertain the issues

Substantiate the claims

1. Overtime procedures in office C are not applied properly. 2. Some overtime claims do not reflect actual hours worked. 3. Employees are breaching the disciplinary code of conduct. 4. Etc.

Overtime procedures in office C are correctly applied by staff. All claims are substantiated except claims from one employee, employee B. The actions of employee B are in breach of the disciplinary code. etc.

Infer the implications

Example 4. You have been asked to investigate claims that longer-serving team members are adhering to a more beneficial set of working practices than newly appointed staff as a result of a long-standing arrangement agreed with a now-retired senior manager. Ascertain the issues

Substantiate the claims

1. Working practices for long-serving staff agreed with old manager.

Changes were made that applied to staff in employment five years ago.

Infer the implications

Basic fieldwork

2. New staffers are disadvantaged due to fewer privileges. 3. Old agreement cannot be changed as part of the conditions of employment. 4. Etc.

73

New staff are disadvantaged and this is affecting morale. Trade Union argues for no change. Legal advisors feel change is legally possible. etc.

Example 5. You have been asked to investigate a complaint from a customer that a quotation for a vehicle repair from repair shop A was inflated and included work that was not required. Ascertain the issues

Substantiate the claims

1. There was a vehicle repair estimate made for the complainant in question. 2. The repair estimate was inflated to an unreasonable level.

The complainant did obtain an estimate for a new gear box. The estimate was high and did not reflect the correct price that should have been charged. The actions suggest a more serious problem as several other estimates also appear higher than what is reasonable. etc.

3. The action to inflate the estimate was unreasonable and breached company policy. 4. Etc.

Infer the implications

Example 6. You have been asked to investigate a concern that the company was losing a large number of cases of unfair dismissal at employment tribunal. Ascertain the issues

Substantiate the claims

1. A large number of cases for unfair dismissal have been lost at employment tribunals (ET).

The level of lost cases has risen by over 50% over the last three years.

Infer the implications

74

Internal Investigations

Example 6. Continued Ascertain the issues

Substantiate the claims

Infer the implications

2. The cases were lost There are several cases where because of poor preparation the lack of preparation and by the company. lost files was commented on by tribunals due to incompetence. 3. The cases were lost All but one of the cases because of poor management involving staff dismissal were of staff discipline. conducted in a correct manner. 4. Etc. etc.

Example 7. You have been asked to investigate a concern that the large number of e-mails being sent around the organisation is having an adverse effect on productivity. Ascertain the issues

Substantiate the claims

1. There is a high level of e-mails being sent around the company. 2. Many e-mails are unnecessary. 3. The level of e-mails is adversely affecting performance.

The average number of e-mails exceeds industry standards by 35%. Over 40% of e-mails are seen as unnecessary. People spend 10% of their time on unnecessary e-mails. Two managers left because of frustration due to excessive e-mails. etc.

4. Etc.

Infer the implications

Example 8. You have been asked to investigate a complaint from an employee that a line manager is giving good performance reports to workers based mainly on personal friendships. Ascertain the issues

Substantiate the claims

1. There is a marked difference between performance for different team members.

Most performance reports are average, with a couple of exceptions up and downwards.

Infer the implications

Basic fieldwork

2. The difference in reports cannot be explained by performance factors only. 3. Better reports are given by the manager to personal friends. 4. Etc.

75

The differences appear to be explained by performance data. There is no evidence of personal bias in performance report scores. etc.

Example 9. You have been asked to investigate an industry-wide report which claims that many financial consultants are pushing investment products that are not suitable to their clients, which may result in an investigation by external regulators later on in the year. There are no reports that this practice is occurring in your company. Ascertain the issues

Substantiate the claims

1. The process for selling products is robust and fair to the customer. 2. The process is being used properly by sales staff.

The sales procedures are well designed and meet industry standards. Staff are aware of the sales process and are applying the requirements. Nearly 20% of customers receive poor products because they fail to provide accurate information to sales staff. etc.

3. Customers are not disadvantaged by methods used by sales staff.

4. Etc.

Infer the implications

Example 10. You have been asked to investigate complaints from several local offices that the risk registers they have been told to compile are seen as a waste of time. Ascertain the issues

Substantiate the claims

1. There is dissatisfaction from some local offices regarding the need to submit risk registers (RRs) to head office each month.

All but one of the local offices is experiencing problems with compiling and using RRs.

Infer the implications

76

Internal Investigations

Example 10. Continued Ascertain the issues

Substantiate the claims

2. The current risk registers are failing to ensure risk is managed to an acceptable level. 3. The corporate standard on preparing and using registers is in need of improvement. 4. Etc.

The current RRs do not reflect real risks to each office and fail to help management make good decisions. The current standard is sound but the training in using RRs is aimed at junior admin staff not the managers. etc.

Infer the implications

4.15 RULES OF EVIDENCE We need to mention a few rules for evidence gathering to ensure our internal investigation can stand up to scrutiny: • Relevancy. The evidence should be relevant in that it sheds light on a claim that we are investigating. We use the Fieldwork Summary Schedule so that we can draw a line between the three columns from claims – to evidence that supports or refutes the claims – to conclusions that are inferred from this evidence. So long as this chain is retained we can be sure that the evidence is relevant. • Reliability. The evidence should be sound. That is, it should be objectively obtained, it should contain no flaws and it should be convincing so that an outsider to the investigation would see it as trustworthy. • Sufficiency. The evidence should give a rounded picture of the facts and not represent isolated cases. We should be able to suggest a general conclusion drawn from a limited amount of sampled information. The sample should be strong enough to enable these conclusions. • Practicality. In the real world we can only provide an imperfect position of any claims under investigation. Practical considerations may mean we can only access some of the available evidence. When we have enough evidence to form an opinion we can stop gathering evidence. The more contentious the issues, the more effort needed to provide the necessary evidence. • Integrity. The chain of evidence should be fully established to safeguard the integrity of the evidence. The investigator needs to be able to indicate the source of the evidence, how it was examined, how it was stored, who had access to it and how it has been presented to support the investigation.

Basic fieldwork

77

The rules of evidence should be established and placed firmly within our standard on conducting internal investigations.

4.16 ESTABLISHING THE CONTEXT One further point to note is the importance of making sure facts are not quoted out of context. Facts, by themselves, can be true but also misleading. Consider this statement: Mr A has complained about unfair treatment at work. He had a sick record of absences totalling over four months during 200x/200y . . . At first sight, the facts of the case would appear that Mr A has an extremely bad sick record, which means he has been put under pressure at work. If we superimpose additional facts on our statement, our perspective on the case may alter: Mr A has worked for the company for over 10 years, during which he has only taken three days off sick. However, due to a serious operation he was certified sick for over four months during 200x/200y, and since his return to work, he has complained about unfair treatment. Both the above statements may be true, but the way the facts are presented changes the context and the impact of the facts. The investigator should be very careful when gathering evidence so that a fair and complete story may be told in the resulting report.

4.17 EXPLORING EXAMPLE 10 We mentioned how, for each evidence-gathering exercise, we need to embark on a six-point method which uses the Evidence Schedules to record our efforts. We can return to Example 10 and explore in further detail how the third Basic stage can be applied. Example 10. You have been asked to investigate complaints from several local offices that the risk registers they have been told to compile are seen as a waste of time. Ascertain the issues

Substantiate the claims

1. There is dissatisfaction from some local offices regarding the need to

All but one of the local offices is experiencing problems with compiling and using RRs.

Infer the implications

78

Internal Investigations

Example 10. Continued Ascertain the issues submit risk registers (RRs) to head office each month. 2. The current risk registers are failing to ensure risk is managed to an acceptable level. 3. The corporate standard on preparing and using registers is in need of improvement. 4. Etc.

Substantiate the claims

Infer the implications

The current RRs do not reflect real risks to each office and fail to help management make good decisions. The current standard is sound but the training in using RRs is aimed at junior admin staff not the managers. etc.

We could substantiate the level of dissatisfaction with the current way risk registers are used by surveying the local offices and asking each manager to express their views. The first Evidence Schedule would be prepared as follows: Aim. To assess degree of satisfaction with the way local risk registers are employed. Strategy. Survey the local managers to solicit their views along with visits to five of the offices to interview the relevant local managers. Relevant documents. Completed Surveys and five Interview Records. Analysis. Scale of dissatisfaction is averaged at ‘Very High’. Conclusions. There is considerable dissatisfaction with the requirement to prepare risk registers and send copies to head office each quarter. Record conclusions in Fieldwork Summary Schedule. A second Evidence Schedule would be prepared as follows: Aim. To assess the reliability of risk registers that are sent to head office each quarter. Strategy. Obtain copies of the risk register sent to head office last quarter. Analyse the registers for completeness, use of risks related to key objectives, realistic action plans and overall compliance with the company risk policy and procedure. Compare risk registers with local office business strategies. Relevant documents. Risk registers, local business strategies and company risk policy and procedures.

Basic fieldwork

79

Analysis. 75% of risk registers are incomplete, with no action plans. 50% of registers are not aligned to local business objectives. 35% of registers are out of date and were last updated over 6 months ago. 25% are incorrectly prepared, with risk scores changing despite no risk management strategy in place to mitigate the risk. 80% of register have no links with local business strategies. Conclusions. Most risk registers are unreliable and do not reflect the local office business priorities. Record conclusions in Fieldwork Summary Schedule. A third Evidence Schedule would be prepared as follows: Aim. To assess the effectiveness of the risk management implementation strategy and training. Strategy. Assess the risk management strategy and training programmes for quality and implementation impact. Compare company approach to published best practice guidance. Relevant documents. Company risk policy, procedures and training programmes. Published best practice guidance. Analysis. The company guidance is well written, as is the training programme. The implementation strategy is flawed, as local managers are not trained. Training is aimed at junior admin people who prepare the local risk registers without engaging with the local management team. Conclusions. Local managers receive no training and they do not get involved in developing their risk registers, which are prepared in a vacuum by junior staff. Record conclusions in Fieldwork Summary Schedule. We should carry out sufficient evidence gathering to meet the set objectives and allow us to complete the investigation. We have discussed the many different sources of evidence in a typical organisation, and a brief account of how these sources may be used in Example 10 is outlined below: • Interviews. The investigator will want to interview the local managers, the junior staff who are preparing the risk registers, head office people who receive the registers and a whole array of people who have relevant information to provide. • Processed documents. The actual risk registers will be considered in some detail, along with the way they are prepared and processed. • Formal statements. A short statement may be obtained from some of the local managers who complained about the lack of real value from risk registers, although this information may well be noted in interview records rather than formal statements.

80

Internal Investigations

• Phone interviews. It may be the case that one local manager was abroad during the investigation and, if considered worthwhile, a phone interview may be deemed appropriate. • Company policies, procedures and rules. The policies, procedures and training programmes will have been considered in some detail to assess their effectiveness. • Diaries, timesheets, expense claims and movement logs. Consider notes and records on the way registers are prepared, such as minutes from a management meeting that makes it clear the register was prepared by a junior admin clerk and then signed off by the local management team. • Expert statements. If the investigator felt unable to undertake a credible assessment of the corporate policies and procedures on risk management and the use of risk registers, this task may be given to a risk consultant to analyse and report on the quality of these documents. • Budgets. The investigator may wish to consider the amount of resources allocated to risk management training to feed this information into the overall assessment of the current arrangements for making sure registers are useful. • Staff information. The type of information that is provided on notices, intranet guidance and notes to staff concerning risk management policies may be used to assess the way risk registers are being promoted. • Prior complaints. It may be possible to discover whether there have been any documented complaints made by local managers regarding the requirement to prepare and update risk registers. • Human resource files. There will probably be no need to access individual employee files, although job descriptions of local managers and the admin clerks who prepare the registers will need to be considered. • Security reports. This source of evidence will probably not be required. • Published reports. There may be reports from internal audit that can be considered to provide important information on the way registers are prepared across the organisation. Published reports and guidance on risk management best practice may be obtained from trusted websites and reviewed. • Compliance checks. The way registers are populated will be examined to ensure that the current practices reflect the way this task is meant to be carried out by the published risk management procedure. • Re-performance. The investigator may wish to re-prepare some of the entries in several risk registers to assess the extent to which the current registers are being prepared. For example, are high-scoring risks being properly downgraded when further controls are designed to mitigate risks? Or, are the scores derived from guess work by the admin clerk involved? • Data mining. This source of evidence will probably not be required.

Basic fieldwork

81

• Forensic techniques. As we discussed earlier, advanced forensic tests will not be appropriate for an internal investigation carried out by a non-specialist investigator. There are many sources of evidence, but it is important to remember that these sources should be used carefully. All evidence should be applied to fulfil a clear objective for the evidence-gathering exercise to ensure that the material in question is fine-tuned to make sure it is actually required to progress the investigation.

4.18 MOVING TO THE NEXT STAGE At this stage we will have obtained the evidence needed to prove or disprove the claims under investigation. The stage whereby issues were developed required listening and ascertaining skills, where we tried to get a fix on the issues that we were going to explore. The evidence-gathering stage required strong analytical skills which sought to prove or disprove the various claims. The next stage will require a more reflective mood to stand back and assess what we have found and draw sound conclusions and an opinion on what happened and why. In the next part of this chapter, we will move on to the final column of our Fieldwork Summary Schedule and deal with conclusions and forming an opinion.

PART 4.III INFERRING THE IMPLICATIONS 4.19 GETTING TO THE IMPLICATIONS We arrive now at the third column of the Fieldwork Summary Schedule. There is one view that suggests we do not need a third column. If we have defined the issues to be investigated and have secured sufficient evidence that sheds light on these issues, then we will have enough to prepare the report. Why spend time on additional work around establishing the implications? We need to step back to address this question. Adversarial investigations into fraud and infringement of legal rights may well end up in civil courts, employment tribunals, internal disciplinary cases and even result in criminal prosecutions. The evidence collected during the investigation will be presented to the judicial forum, along with the case from defence or opposing side and a decision will be made by the tribunal, magistrates, jury or judge for, or against, one of the parties involved. A fraud investigator knows that their evidence may well be challenged, and they seek to secure sufficient

82

Internal Investigations

evidence knowing that they may fail to convince the authorities in question. Moreover, approaching the investigation seeking to build a case against someone may promote a blinkered search that focuses only on items that support the case rather than keeping an open mind. Having delivered their evidence, the fraud investigator’s job is done. It is not so easy for the internal investigator. Although the work is much less complex, the scope is much wider as the internal investigator acts as both judge and jury. If the internal investigation has been conducted in a professional manner, it is unlikely that the conclusions and recommendations will be challenged. Which means the internal investigator’s evidence must be very carefully weighed up before the report is prepared, to be fair to all sides involved. This is why we have a separate column in our Fieldwork Summary Schedule to encourage investigators to review their evidence and spend some time deciding what it demonstrates, and what it fails to prove.

4.20 WHAT ABOUT POLITICS? It is hard to escape from politics in any organisation. Our interpretation of politics is the need to make decisions having regard to the impact on the actual and perceived positions of all the parties involved – and to gain as much advantage as possible from such decisions. This principle means that an internal investigation seeks to protect the best interests of the organisation. In most cases, this does not present a problem, but occasionally there may be conflicts that appear. Real-life politics can lead to real-life problems, for example: • An investigation into the way a manager treated a member of staff may reveal that the actions of the manager have led to the employee suffering severe ill health. If the investigation reveals a clear link between the manager’s actions and the adverse effect on the employee’s health, a personal injury at work claim may arise where the duty of care owed by the employer has been breached. This failing in the duty of care may result in the employee suing the organisation for damages and compensation. In this instance, the internal investigator’s report may be presented as evidence to support a legal claim against the organisation. • An internal investigation may reveal that employees are falsifying test data due to pressures to complete projects and meet management targets. This breach of procedure may mean that product safety is at risk, and these failings could lead to a full investigation by the regulatory body covering the business. • An internal investigation into the way an ex-employee was dismissed may reveal a cover-up by senior managers who sought to stop the employee

Basic fieldwork

83

providing information about the way many sales people are bribing overseas government officials to obtain important contracts. What started out as a straightforward investigation into the way disciplinary procedures were operated may lead to a major criticism of the way some senior managers in the company are behaving. • An internal investigation into the way complaints are handled in a business unit may reveal a complete failure of senior executive directors to respond to information about poor complaints handling that was brought to their attention some time ago. • An internal investigation into the way sales personnel expense accounts are operated may reveal a disturbing trend whereby the large sums involved are being inappropriately loaded onto fees that are charged to clients. The implications stage of the investigation provides an opportunity to assess the evidence and work out what it tells us about the issues. Where there are political dimensions, the investigator should take steps to make sure the evidence found is checked and double-checked, and be prepared to stand their ground. In the end, the investigator must report all relevant information to the sponsor and provide as much useful advice as possible. It will be for those higher up the chain to decide how to manage any political fallout, bearing in mind our view that it is okay to make mistakes but it is not okay to cover these mistakes up.

4.21 THE EVIDENCE ‘C’ SCALE Most standards on investigations state that the investigator should secure sound evidence regarding the matters being investigated and then prepare a report based around the findings and conclusions. Sounds simple? The reality can be quite different. The problem is that all sources of evidence have a unique and transient quality. Some findings are clear and straightforward. Other evidence-gathering exercises produce findings that are less easy to decipher. Before we enter our opinion into the third column of the Fieldwork Summary Schedule, it is possible to go through an analytical process to weigh up the evidence we have obtained. The idea is to assess each piece of evidence against set criteria and place it in one of six ‘C’ categories, as set out in Table 4.2. The Evidence ‘C’ Scale is quite easy to use. The Evidence Schedules that we have put together during the course of the fieldwork will contain different types of evidence from our interviews, analysis of documents, witness statements, expert advice and all the other sources we have mentioned earlier in the chapter. Each source of evidence should be weighed up against our

84

Internal Investigations

Table 4.2 The Evidence ‘C’ Scale 0% DEGREE OF CERTAINTY THAT EVIDENCE SUPPORTS CLAIMS

100%

1. Contrary 2. Cloudy 3. Confirming 4. Convincing 5. Compelling 6. Concrete 0% DEGREE OF CERTAINTY THAT EVIDENCE SUPPORTS CLAIMS

100%

‘C’ scale to be placed in one of six categories, depending on the extent to which it supports the claims under investigation. Statements from three witnesses that confirm manager x did not swear at a customer may be scored as ‘Contrary’ as they disprove a claim that the manager swore at the customer. If these same witnesses had confirmed that manager x did swear at a customer, the evidence may be scored as ‘Concrete’ proof that the incident did happen. A witness who suggests that the manager did say something but it was not clear exactly what was said, may be scored as ‘Cloudy’ as it does not really support the claim. Another witness who states that the swearing incident did occur may be marked ‘Compelling’ so long as the witness is deemed credible and has no vested interest in the outcome of the investigation. If the witness is not seen as entirely credible then the score may be assigned downwards to say ‘Confirming’ only. Confirming in this sense is used to mean ‘tending to confirm’ rather than acting as corroborating another source of evidence – which would then require a further ‘C’ scale assessment. We seek to prove or disprove claims on the balance of probabilities, which means based on assessing and weighing up the available evidence. The Evidence ‘C’ Scale is a tool that can be used to help with this task of weighing up what we have found before reaching a reasonable conclusion.

4.22 OTHER CONSIDERATIONS The internal investigator needs to be clear about the conclusions from the fieldwork. There should be a good understanding of the implications of the work that has been carried out and the effect on processes, reputations, team relationships and the career prospects of individuals working with and for the organisation. When formulating conclusions for the third column of the

Basic fieldwork

85

Fieldwork Summary Schedule, there are several other considerations to be borne in mind: • If the conclusions impact on staff behaviour then consider whether there are any matters that should be referred to the organisation’s staff disciplinary procedure. • If the conclusions impact on relationships between different members of staff then consider whether conciliation or reconciliation can be used to move forward. • If the conclusions impact on the performance of staff and teams then consider whether the performance management system is working properly. • If the conclusions impact on staff capability then consider whether there are any matters that should be addressed through the staff capability procedure. • If the conclusions point to a disadvantage to any customers or associates consider whether it is necessary to consider compensation or other ways of addressing the identified disadvantages. • If the conclusions suggest the organisation has breached any legislation and policies such as human rights, data protection, anti-bullying and diversity policies then consider whether there are any matters that should be referred to the appropriate head of service. We will want to analyse breaches of procedure very carefully, because they can be the result of poor training, random errors, poor procedures or deliberate bypassing. • If the conclusions impact on stress levels of employees then consider whether there are any matters relating to job design, training, communications, job security, participation and counselling that may be appropriate. • If the conclusions suggest a wider problem in other parts of the organisation then consider whether a further investigation should be commissioned using specialist investigators. There is much to consider when drawing conclusions and thinking about ways forward. Many of the typical problems that occur in larger organisations result from failings in procedures, performance or behaviour. It may be appropriate to brief the investigation’s sponsor to discuss the types of improvements or referrals required as a result of the investigation.

4.23 FURTHER PRACTICAL EXAMPLES One way of getting to grips with the way we can arrive at the implications resulting from our fieldwork is to develop the simple examples we used

86

Internal Investigations

earlier to illustrate how we can use the Basic approach to develop conclusions regarding the issues that were investigated.

Example 1. You have been asked to investigate an increase in sick leave in several parts of the organisation that has been identified by the Head of Human Resources. Ascertain the issues

Substantiate the claims

Infer the implications

1. Sick leave has increased disproportionately in offices x, y and z.

Company returns show 20% increase in units x and y. Unit z is at company average.

2. Returns are being incorrectly processed.

Coding used in unit x incorrectly puts flexi leave down as sick leave. Unit y has two people on long-term sick leave.

3. Managers are failing to manage sick leave as per corporate procedures.

Unit x manager not aware of problems caused by errors by a casual admin worker. Manager of unit y has not referred two long-term sick leave staff to human resources as required by company policy.

4. Etc.

etc.

There is a problem with units x and y that means sick leave appears out of control. Unit z has acceptable levels. Inaccurate sick leave recording means unit x figures are inflated. Unit y is not dealing with long-term sick leave in line with procedures. Unit x – errors caused by casual admin clerk who is incompetent – replace him. Unit y – manager failed to refer sick staff to human resources – should be reprimanded and all unit managers should be reminded about procedure. Unit z – no action required. etc.

Basic fieldwork

87

Example 2. You have been asked to investigate employee X’s claims of bullying by a team manager which appear to have been ignored by the business unit manager. Ascertain the issues

Substantiate the claims

Infer the implications

1. Employee X has a poor relationship with her manager.

Team members and manager confirm that there is not a poor relationship.

2. Employee X was bullied by line manager.

Claims of severe treatment confirmed by two team members.

3. The actions perceived as bullying fit with the corporate anti-bullying policy.

Severe treatment was prompted by performance issues as a one-off incident. Manager apologised soon after the incident.

4. The line manager is aware of the anti-bullying policy.

Confirmed by line manager.

5. Etc.

etc.

There is a line management relationship that cannot be described as poor. Employee X was subject to severe treatment by the line manager. The incident was not one of a pattern and was followed by an apology. Manager advised to sanction staff with discretion and not as a public display. Remind manager that a pattern of repeat severe reprimands would fall under the anti-bullying policy. etc.

Example 3. You have been asked to investigate irregularities in the overtime claiming system in office C that have been indicated by an ex-employee. Ascertain the issues

Substantiate the claims

Infer the implications

1. Overtime procedures in office C are not applied properly.

Overtime procedures in office C are correctly applied by staff.

There is no problem with the way overtime is managed.

88

Internal Investigations

Example 3. Continued Ascertain the issues

Substantiate the claims

Infer the implications

2. Some overtime claims do not reflect actual hours worked.

There are suspect claims from one employee (employee B) in office C.

3. Employees are breaching the disciplinary code of conduct.

All claims are substantiated except claims from one employee, employee B. The actions of employee B are in breach of the disciplinary code.

4. Etc.

etc.

Refer the case to the group director and human resources for possible disciplinary actions against employee B. etc.

Example 4. You have been asked to investigate claims that longer-serving team members are adhering to a more beneficial set of working practices than newly appointed staff as a result of a long-standing arrangement agreed with a now-retired senior manager. Ascertain the issues

Substantiate the claims

Infer the implications

1. Working practices for long-serving staff agreed with old manager.

Changes were made that applied to staff in employment five years ago.

2. New staffers are disadvantaged due to fewer privileges.

New staff are disadvantaged and this is affecting morale.

3. Old agreement cannot be changed as part of the conditions of employment.

Trade Union argues for no change. Legal advisors feel change is legally possible.

4. Etc.

etc.

There is a problem with differing working practices that is affecting team performance. The newer employees are demotivated and there are problems managing the arrangements. It is possible to put all team members on an equal footing. A one-off payment may be offered to long-standing staff (with over five years’ service) and the additional benefits removed. etc.

Basic fieldwork

89

Example 5. You have been asked to investigate a complaint from a customer that a quotation for a vehicle repair from repair shop A was inflated and included work that was not required. Ascertain the issues

Substantiate the claims

Infer the implications

1. There was a vehicle repair estimate made for the complainant in question. 2. The repair estimate was inflated to an unreasonable level.

The complainant did obtain an estimate for a new gear box.

The complainant did receive an estimate from repair shop A.

The estimate was high and did not reflect the correct price that should have been charged. The actions suggest a more serious problem as several other estimates also appear higher than what is reasonable. etc.

The car was repaired by another company for a much smaller amount as a new gear box was not required. The manager of repair shop A may be involved in underhand practices and this matter should be investigated by internal audit. etc.

3. The action to inflate the estimate was unreasonable and breached company policy. 4. Etc.

Example 6. You have been asked to investigate a concern that the company was losing a large number of cases of unfair dismissal at employment tribunals. Ascertain the issues

Substantiate the claims

Infer the implications

1. A large number of cases for unfair dismissal have been lost at employment tribunals (ET). 2. The cases were lost because of poor preparation by the company.

The level of lost cases has risen by over 50% over the last three years.

There is a problem with lost ET cases which is costing the company significant levels of compensation. The officer in charge of ET casework has little experience and has received no training. Files on staff disciplinary cases have been lost. An external consultant should be employed to represent the company at ET.

There are several cases where the lack of preparation and lost files was commented on by tribunals due to incompetence.

90

Internal Investigations

Example 6. Continued Ascertain the issues

Substantiate the claims

Infer the implications

3. The cases were lost because of poor management of staff discipline.

All but one of the cases involving staff dismissal were conducted in a correct manner. etc.

Staff disciplinary cases and hearings are well conducted and the results are fair.

4. Etc.

etc.

Example 7. You have been asked to investigate a concern that the large number of e-mails being sent around the organisation is having an adverse effect on productivity. Ascertain the issues

Substantiate the claims

1. There is a high level of e-mails being sent around the company. 2. Many e-mails are unnecessary. 3. The level of e-mails is adversely affecting performance.

The average number of There is a problem with e-mails exceeds excessive levels of e-mails. industry standards by 35%. Over 40% of e-mails are There are large numbers seen as unnecessary. of redundant e-mails. People spend 10% of The level of e-mails is their time on unnecessary affecting performance e-mails. Two managers and morale. A corporate left because of frustration standard is needed on the due to excessive e-mails. use of e-mails along with an intranet presentation on managing e-mails to best effect. etc. etc.

4. Etc.

Infer the implications

Example 8. You have been asked to investigate a complaint from an employee that a line manager is giving good performance reports to workers based mainly on personal friendships. Ascertain the issues

Substantiate the claims

Infer the implications

1. There is a marked difference between performance for different team members.

Most performance reports are average, with a couple of exceptions up and downwards.

There is no marked difference in performance reports for the team.

Basic fieldwork

91

2. The difference in reports cannot be explained by performance factors only. 3. Better reports are given by the manager to personal friends.

The differences appear to be explained by performance data.

All performance scores appear to be reasonable.

There is no evidence of personal bias in performance report scores.

4. Etc.

etc.

The complaint is not upheld and the employee making the complaint is a poor performer and has a history of taking out grievances. Human resources should be asked to advise on this problem. etc.

Example 9. You have been asked to investigate an industry-wide report which claims that many financial consultants are pushing investment products that are not suitable to their clients, which may result in an investigation by external regulators later in the year. There are no reports that this practice is occurring in your company. Ascertain the issues Substantiate the claims Infer the implications 1. The process for selling products is robust and fair to the customer. 2. The process is being used properly by sales staff.

The sales procedures are well designed and meet industry standards. Staff are aware of the sales process and are applying the requirements. 3. Customers are not Nearly 20% of disadvantaged by customers receive poor methods used by products because they sales staff. fail to provide accurate information to sales staff. 4. Etc.

etc.

The sales policy and procedures are sound.

The procedures are being used properly.

There is no way of verifying everything customers tell us. Suggest we join an industry working party to consider longer-term ways of improving the selling process. etc.

92

Internal Investigations

4.24 EXPLORING EXAMPLE 10 We can explore Example 10 in further detail to examine how the fourth Basic stage can be applied.

Example 10. You have been asked to investigate complaints from several local offices that the risk registers they have been told to compile are seen as a waste of time. Ascertain the issues

Substantiate the claims

Infer the implications

1. There is dissatisfaction from some local offices regarding the need to submit risk registers (RRs) to head office each month. 2. The current risk registers are failing to ensure risk is managed to an acceptable level. 3. The corporate standard on preparing and using registers is in need of improvement. 4. Etc.

All but one of the local offices is experiencing problems with compiling and using RRs.

There is a major problem involving local management dissatisfaction with using RRs.

The current RRs do not reflect real risks to each office and fail to help management make good decisions. The current standard is sound but the training in using RRs is aimed at junior admin staff not the managers. etc.

The RRs are not making a real impact on managing risk.

The standard can be retained but the training needs to be refocused to aim it at local managers. etc.

We know there is a problem with the way risk registers are perceived and applied by the local offices and we have compelling evidence of the general dissatisfaction with the current arrangements. We can arrive at a position for our first claim that there is dissatisfaction with risk registers for column three of the Fieldwork Summary Schedule. An assessment of the actual registers in use confirms the second claim that the tool is not really helping local managers manage their risks. The evidence regarding the corporate risk management standard and training is interesting, because it shows that there is good material in place but it is aimed at the wrong people. Training needs to be refocused to reach managers and get them to work out their risks and prepare their risk registers rather than ask a junior clerk to do it for them

Basic fieldwork

93

in isolation. The investigation uncovered fairly concrete evidence that raises many other questions, such as: 1. Why was training aimed at the wrong level of employees? 2. Why are local managers not asking to get involved in the risk management process? 3. Who is driving the risk management process and ensuring it works? 4. Why did it take an investigation to uncover this worrying situation? One approach is to use the conclusions from the investigation to drive forward positive change to make the organisation better. It is always a good idea to encourage people to solve their own problems rather than just set out a whole batch of ad-hoc recommendations. In this example, we may suggest a working party consisting of a group of local managers is set up to work out how best to implement the risk management process, so that it works for them. The key is to get the most value from all the hard work and solid evidence that has been compiled during the internal investigation.

4.25 TO CLOSE To close this chapter we should reinforce our view that the fieldwork stage of the investigation provides the heart of the work. We have defined the issues for consideration and have spent the right amount of time on a structured approach to gathering sound evidence to make sense of the issues. The investigator will spend time in considering what has been uncovered until sensible conclusions and useful advice on moving forwards can be prepared, all based on solid fieldwork. Our fourth Basic Principle is repeated below as follows:

BASIC PRINCIPLE FOUR All internal investigations should involve assessing issues and gathering sufficient reliable evidence to substantiate the claims, so that the implications may be ascertained.

BASIC GUIDANCE At the fieldwork stage of the investigation you should consider the following 10-point guidance: 4.1. Internal investigations should involve an objective attempt to secure evidence that impacts the issues defined in the terms of reference, using a positive approach to addressing any identified problems

94

4.2.

4.3.

4.4.

4.5.

4.6.

4.7.

4.8.

4.9.

4.10.

Internal Investigations

and seeking improvements to current working practices, wherever possible. A Fieldwork Summary Schedule should be completed to document issues under investigation, the evidence that was secured and the conclusions drawn from this evidence. The issues under investigation should be fully researched and understood, including the business context, any staff-related considerations and the relevant procedures involved. A diary of the investigation should be maintained by the investigator that documents all incidents, key decisions, meetings, phone calls and other means of contact along with anything that provides a useful audit trail of the conduct of the investigation. All available sources of evidence should be considered when developing strategies for substantiating the relevant issues and claims, and expert advice obtained where the nature of the evidence involves a degree of complexity. All findings should be supported by the best available evidence that is relevant, reliable, sufficient and practical to ensure that the investigation arrives at justifiable conclusions. The evidence secured should be documented in Evidence Schedules that record the aim of the exercise, how the evidence was gathered and assessed and the conclusions – while the conclusions should also be noted in the Fieldwork Summary Schedule. All evidence secured during the investigation should be weighed up (using a suitable scale) and assigned a category that best reflects the degree of reliance that can be placed on the evidence before any resulting conclusions are drawn. The investigator should represent the best interests of the organisation and also protect the rights of all parties involved in the investigation by reporting fully and without bias, all information that is relevant to fulfilling the terms of reference of the investigation. The conclusions and recommendations provided by the investigator should take on board any need to instigate separate organisational measures, for example where breach of procedure is involved, depending on the nature of the findings.

Note that Chapter 7 contains several checklists to support the abovementioned guidance. Having completed the all-important fieldwork stage of the investigation, we will be in a position to prepare the draft report. Before we deal with this, we need to provide material on the use of interviewing as this is an important tool for all investigations, which is dealt with in the next chapter.

5 Basic fieldwork tools – interviewing

There are many tools available to the internal investigator to facilitate the progress of an investigation; interviewing being the single most useful of these tools. Most would agree that an important source of information resides in the minds of people who have knowledge of the issues being investigated. Chapter 4 dealt with the various stages of fieldwork that were set out in the main template used in earlier chapters. We have not restated the template in this chapter because interviewing is not defined as a separate component, but is seen more as a tool that underpins most parts of the Basic investigative process. In this chapter we deal with planning and conducting the interview, along with several simple models that might help ensure those people who can assist the investigator are willing and able to do so. Each chapter of the book will identify a Basic Principle and our fifth such principle is stated as follows:

BASIC PRINCIPLE FIVE Professionally planned and conducted interviews should be used throughout the investigation whenever it is possible to obtain relevant information from people who can assist the investigator.

5.1 WHY INTERVIEWING? We have pointed out the resources needed to conduct a professional internal investigation and the way an investigation may entail an amount of work and effort to get to a reliable result. We have also suggested that, wherever possible, the matters under review should be resolved quickly at a local level rather than entail a full-blown formal investigation. If it is possible, simply question the person who has a grievance/complaint and, after having interviewed them, we might be able to reach a reasonable conclusion that all parties can agree to. This is why interviewing is so important. Non-controversial issues that are easy to grasp and resolve may use interviewing as the main element of an investigation. There is, however, one risk in using interviews as a main solution, and this is that most people tend to represent their position and their experiences in a way that best suits their own interests. Important

96

Internal Investigations

issues cannot always be resolved by simply asking a few questions as these issues may have to be fully investigated. It is during the investigation that interviewing can be carefully used to secure insights, support findings and also point to new sources of information. It is clear that interviewing can be crucial to an investigation and a professional approach is required to make best use of this tool.

5.2 FOUR DIMENSIONS OF RAPPORT Before we go into the way interviews can be planned and structured, we need to stand back and reflect on the way different people react to different circumstances. An investigator may well be told to ‘establish rapport’ with people they meet during the investigation so as to build a basis for constructive conversations. Gaining good rapport is seen by some as loosely related to talking about the weather and appearing friendly, so putting the other person at ease. But a friendly and easygoing investigator may often experience difficulties when talking to people and carrying out formal interviews that can make it very uncomfortable for all parties to the conversation. Moreover, it may be hard to explain why such a degree of discomfort exists. One model that can be used to understand why it may prove difficult to deal with some people during an investigation is set out in Figure 5.1. Important

Negative

Positive

Insignificant

Figure 5.1 Four Dimensions of Rapport.

Figure 5.1 suggests that when people within an organisation are approached by an internal investigator, they will have different reactions to different perceptions of the investigation depending on a number of factors: 1. Perceived importance/insignificance of the investigation. 2. Perceived potential negative/positive impacts of the issues being investigated. The four dimensions of perceptions may create four possible responses from the prospective interviewee who is contacted by the investigator. These four possible responses are outlined below as follows:

Basic fieldwork tools – interviewing

97

• Threat. Where the investigation is seen as carrying a lot of weight it will be seen as having an important potential impact on the interviewee. Where the result is seen as negative, in having a possible adverse effect on the person, then the interview will be seen as a threat and may evoke fear and resentment towards the investigator. • Valuable. The investigation may be seen as both important and helpful in seeking to resolve a problem that has been a worry to the interviewee. In this case, because there is a positive perception, the interview will be seen as valuable and evoke a feeling of cooperation towards the investigator. • Irritating. In contrast, an investigation that is seen as insignificant and unhelpful will tend to instil some degree of irritation from the interviewee, which may appear as an annoyance towards the investigator. • Handy. Insignificant matters that may be helpful to the interviewee may evoke a small degree of allegiance towards the investigator. The Four Dimensions of Rapport model addresses the way people may respond to an investigator, when they are asked to attend an interview with the internal investigator. The model seeks to explain the odd reactions that occur when a friendly and open-minded investigator suddenly finds him/herself in the middle of what appears like a war zone when all they want to do is ask a few straightforward questions. People being interviewed may refuse to answer questions, they may treat the entire affair as a joke, or they may see the investigation as a chance to bring about real change for the better. Their initial response will depend on where they sit on the Four Dimensions of Rapport. A good investigator will take an interviewee who sits at any one of the four dimensions and convince them that they should cooperate and be entirely open. The task of changing the stance of an interviewee is timeconsuming and can be emotionally draining. A better approach is to employ the Four Dimensions model at an early stage and get the interview off to a good start that places the interviewee towards the ‘top right-hand corner’ at as early a stage as possible. The strategy that may be adopted to establish rapport could include the following components: • Viability. Ensure that the issues being investigated warrant a formal internal investigation and are important enough to occupy the time of busy people. The initial planning stage should involve an assessment of whether or not it is worth setting up a formal investigation. • Competence. Ensure the investigator is competent to carry out the investigation. No useful work will be completed where the appointed investigator is unable to grapple with the complexities of a difficult investigation. An incompetent investigator will create resentment across the organisation as they fail to promote an aura of credibility. The risk

98

• • •

•

•

Internal Investigations

of incompetence is managed by making sure an appointed investigator refuses to take on any inquiry when, due to their level of skill and experience, they feel unable to perform the investigation to the required standard. Seniority. Appoint a suitable sponsor. Investigations have clout when the final decision-maker is senior enough and respected enough to ensure the issues under review are dealt with in a serious and robust manner. Professionalism. The lead investigator must ensure that they carry out their work to professional standards and adhere to all corporate protocols, such as protecting people’s rights and being fair at all times. Independence. An internal investigation must be objective in allowing all sources of evidence to be examined and explored. People will tend to cooperate with an inquiry where the main aim is to seek out the truth, with no vested interests or interference from powerful third parties. The investigator must ensure they convey a feeling of independence when dealing with people. Risk and controls. The investigator needs to demonstrate a good understanding of the risks that may have led to the problems being investigated. There should also be a good understanding of the types of controls that could be applied to improve the situation that led to these problems. Taking a problem-solving and improvement-seeking theme as a main driver for the investigation is one way of promoting a more positive risk and control approach. Corporate policies. The internal investigation should adhere to all corporate policies and ensure that issues that should be addressed within one set of policies are referred to the right head of service. Conspiracy theories suggest that investigations and the resulting recommendations are used to bypass the established route that should have been used. Disciplinary matters should be dealt with by the disciplinary procedure and performance matters should likewise be fed into the performance management system or staff capability procedure. Most corporate procedures allow a degree of consultation or representation to ensure all parties’ interests are protected.

If we employ the measures set out above, we can organise interviews with the knowledge that we have done everything possible to ensure the cooperation of the person who will be interviewed. There is one word of warning – when there is a failing in accountability that has led to the issues being investigated, there will always be some level of measured resistance from those parties who have not fully discharged their responsibilities. This resistance is a fact of life and no amount of practical measures will ensure everyone cooperates all the time.

Basic fieldwork tools – interviewing

99

5.3 OPEN FORUM INQUIRY PANELS We have mentioned the importance of interviewing to the investigator and the need to ensure that all investigations are really required. It is possible to use a half-way house between an informal fact-finding exercise involving a few informal interviews and a full investigation involving the entire Basic format. The middle ground consists of a form of open forum panel, involving a substantial number of interviews. In this approach, an inquiry panel is established consisting of between two and three senior figures to inquire into a widespread problem. The panel will meet on a regular basis to discuss the issues and will invite all-comers to attend their panel and present any information they have that relates to these issues under review. Some see this open panel forum as a useful process for ‘clearing the air’ to address a problem that has been affecting the organisation for some time; to investigate the issues and move the organisation forwards. The evidence gathered arrives mainly in the guise of knowledge held in the minds of a large number of people who work for, or are associated with, the organisation. There are several observations regarding the use of these types of panels that may be noted below: • Stubborn, long-lasting issues that have been the cause of rumour and discontent for some time can be tackled by setting up the inquiry panel and hearing from all those who have strong views or information to submit. • People should be encouraged to contact the panel and make their submissions and some individuals can be specifically invited to attend the panel and be interviewed by the members. • Since the main premise for the panel is to avoid setting up investigations, allow open access to the panel as a way of avoiding too much formality. • A more complex version of this approach is to allow the panel to engage investigators from time to time to look into specific issues that arise from the open panel forum. Clearing the air in this way may enable us to develop a policy that does not reward people who abuse the current arrangements while penalising work teams that have been playing by the rules. The new procedures may then be informed by a thorough understanding of the good and not so good aspects of the current procedures. It may be that the current procedures are entirely sound but that they are not being employed in a consistent manner throughout the organisation. For example, where there is a history of issues and problems arising from the way absences, flexi-leave and working-from-home arrangements have been practised over the years, there are several different approaches that may be activated. We could use the Basic approach from this book and undertake an internal investigation. We could simply

100

Internal Investigations

prepare an ‘accounting for time’ policy and go on to implement the procedure by consulting with staff, managers and others. Or, we could collect stories from across the organisation about the way different employees and teams are accounting for their time by using the open forum inquiry panel approach. After which, we can develop effective improvements. The open forum inquiry panel is a useful tool, but it will only work where the panel assumes an Important/Positive Rapport mode (see Figure 5.1) and the panel members have excellent interviewing skills.

5.4 INTERVIEWS AND THE BASIC MODEL We have discussed the need for some sensitivity in setting up interviews to promote good cooperation from the interviewee and how interviewing can be used as the main focus of an inquiry panel approach to investigations. We have also suggested that interviewing flows through all aspects of an investigation rather than appearing as a discrete part of the fieldwork. To reinforce the wide role of interviewing, we can briefly mention how this tool can be applied to the Basic approach that we have used throughout the book: • Beginning the investigation. The fact finding and initial planning stage of the investigation is based around an open-minded stance of trying to find out about the issue and how best to approach resolving the problem. Because we may not need to launch into a full investigation, it is important to encourage an informal open access atmosphere. We will want to interview any person making an allegation or complaint to ensure we understand what is at stake. This ‘listening stage’ may be reasonably informal, where we simply want to talk to the person who knows most about the problem before preparing a recommendation on how to proceed. If the fact-finding stage revolves around an allegation against a specific individual then a conversation with this person may allow a short-cut to the work where there is an admission or acknowledgement that the incident did occur. It may be possible to resolve the issue by conciliation without going into the full fieldwork stage of the investigation. This is an important point in that some investigators spend a great deal of time developing a range of evidence before presenting this to the individual for explanation. Meanwhile, the same individual may have been quite happy to admit and explain their role in the matter if they had been asked at an early stage to do so. • Ascertaining the issues. The ascertaining stage goes into more detail, where we probe the issues identified at fact-finding stage to work out exactly what is involved and how the problem relates to other issues. We will need to conduct formal interviews at this stage and document the detailed issues and processes in question. Ascertainment involves detailing

Basic fieldwork tools – interviewing

101

the facts and these interviews can last for some time, as we seek out the information we need. Interviews will need to deal with who, what, where, why and how questions that will have to be carefully structured so that we capture all relevant details. An open door approach will be needed so that we can call people back to explain things in more detail, or deal with a gap that becomes obvious as we obtain more information from other interviewees. We would expect to conduct many interviews where general issues are documented around a tight question and answer format. • Substantiating the claims. The evidence-gathering stage of the investigation will involve drilling down into specific issues that we need to substantiate. We move from the general to the more specific and will need to assume a different interviewing style based on probing into issues that need further clarification or confirmation. We will be concerned about inconsistencies in information obtained, or where there is a lack of clarity. We are not looking for lies or misrepresentation, but we are looking carefully for reliable evidence that confirms the facts under review. Witness statements may be taken that set out exactly what someone knows or has seen, to form part of the evidence-gathering process. • Inferring the implications. We will not normally carry out too many interviews at this stage of the investigation. Inferring is about reflecting back on the evidence we have acquired and working out how it all stacks up to form a picture of the causes and conclusions we are drawing, to complete the fieldwork stage of the work. In this context interviews may consist of checking something that sounds wrong or phoning someone to double-check a previous interview that throws up some doubt. • Communicating the results. Preparing, reporting and presenting results will not normally entail formal interviews as we move into the communications stage of the investigation. It may be necessary to carry out a few interviews with the management team to check whether our tentative views on ways forward make practical sense. Some internal investigators spend their time analysing procedures, budgets, internal reports, operational notes and detailed documentation to understand the issues they are reviewing. In the quick-fire world in which we now live, there is very little room for a shy investigator – someone who is scared to ask questions and approach people for help. When we need information it is always best to ask someone, which is where interviewing comes into play as a useful tool. During a typical investigation we will interview many people who can assist us in our task, including: • The person making the allegation/raising the concern or making the complaint. • Any person/s who need to answer claims regarding their behaviour as a result of an allegation/complaint.

102

Internal Investigations

• Any witnesses who have specific knowledge about the allegation/complaint or behaviour of the person answering these claims. • Management for the area that is affected by the investigation. • Any in-house specialist or external experts who can provide assistance to the investigator. • Anyone else who can assist the investigator as we work through the various Basic stages. Our aim will be to gather as much relevant information as possible to gain an understanding of the issues in question and to test the information received against other sources of information.

5.5 PREPARING THE INTERVIEW We know when to use interviews and we appreciate the importance of getting people to tell us all we need to progress the investigation. The next factor to consider is the way we prepare the interview, bearing in mind the need to consider the different dimensions of rapport we discussed earlier. Unfortunately, some internal investigators come from the ‘Sam Spade’ school, where they glide through a series of mysterious events, shooting off questions and wise cracks as they eventually solve the case. This high-adrenaline approach makes it tempting to drift from interview to interview with little or no preparation to engage in a series of verbal sparring matches with everyone we meet. The Basic approach used in this book demands an emphasis on professionalism and the use of principles and practice guidance to perform investigations that can stand up to the most rigorous scrutiny. As such, each interview must be carefully prepared before we get to the face-to-face part of the actual interview. Preparation involves the following key considerations: • Notice. People must be given good notice of an interview so that they may fit it into their schedules. Some organisations have corporate standards on giving notice, where stated timeframes, say five working days, are documented for non-routine staff interviews. If there is no set standard, then it is fair to give sufficient notice and offer several alternative days for the interview. • Promptness. Interviews should be held promptly as memories fade and speed implies that the investigator is serious about concluding the investigation. The need to move events along goes slightly against the need to give sufficient notice that we outlined above. The investigator can contact an employee and agree a short notice interview if this is acceptable and convenient. If the notice period falls foul of corporate standards we will

Basic fieldwork tools – interviewing

103

want to document the fact that the employee is happy to meet at short notice. • Issues. It is always difficult to decide what information to give out before an interview. The old approach was to say as little as possible. New transparent cultural styles will argue that all relevant information should be disclosed as far as possible. We will want to indicate to a prospective interviewee that we are conducting an investigation into ‘xyz’ as a single statement without going into too much detail. The interviewee can be given more information during the interview, when we have had a chance to explain the rules on confidentiality. • Confidentiality. Building on the point made above, we will want to indicate in the e-mail inviting the employee to be interviewed that the matters under investigation should be treated as confidential. We could state that these confidentiality rules are part of corporate standards so as to deflect the view that the investigation is somewhat special or high-profile, which may well not be the case. Where an informant has provided information on the basis that they remain anonymous, it is not possible to make promises in this respect. We can seek to keep the informant’s identity under wraps, but there may well be a legal obligation to divulge information to third parties if required. This factor should be carefully explained to anyone coming forward with sensitive information, along with the fact that any one who has information of interest to an investigator has a duty to provide this information. • Location. It is a good idea to choose the location with care. If the location is too informal, say in the interviewee’s office, it may be overheard or interrupted. It should certainly not be at the edge of the employee’s desk. If the location is too formal, say at a head office site, the meeting may suggest a significance that is inappropriate. The interview should be held somewhere private, that is away from the employee’s office, unless we are dealing with a senior manager who will want to access files and records during the interview. Some investigators seek to develop an intimate atmosphere by arranging meetings in bars and cafes. While tempting, this is normally not appropriate as it gives out mixed messages of informality, personal friendship and even low-level bribery. Bearing in mind possible sensitivities, we should be careful about using a conference or board room, where the interviewee is marched past colleagues to an imposing room. If the investigator is given a separate room to conduct the investigation then this can be used (although, if it is not discreetly located, the room will soon be known as the ‘interrogation room’). Moreover, if the room is small, dark and oppressive, it can appear intimidating which is not appropriate for a non-criminal investigation. Where an employee is on sick leave, we can offer to interview them at their home, if this is acceptable.

104

Internal Investigations

• Attendance. We will want to establish some simple rules about attendance at formal interviews. We will encourage prompt attendance but will recognise that matters can arise that fall outside the control of the employee, making attendance difficult. A new date can be arranged but we will be wary about frequently used excuses that are unreasonable. Continual failure to attend without sufficient reason may well lead to a referral to a senior manager, as all organisations have the right to ask reasonable questions of their employees. • Accompanied. There is no need for an employee to be accompanied during an internal investigation, unless it relates to a staff disciplinary or staff grievance matter. If an internal investigation moves into a disciplinary matter, the investigation may be aborted and referred to the correct disciplinary procedure. It may be necessary to make clear the difference between a Basic internal investigation and other formal investigatory procedures, if there are any concerns raised by the employee. • Recording. The method of recording the interview should be determined beforehand. This may be by simple notes, standard documents or laptop entries. It is unusual for Basic interviews to be digitally recorded as this approach is normally applied where the matter relates to fraud or civil litigation. • Adjustments. The investigator should facilitate the interview process in any way possible. Corporate policies on disabilities will call for reasonable adjustment to be made to cater for employees who have a disability, and all suitable adjustments will need to be considered. Where the interviewee has poor language skills, we may need to use an interpreter who will be told to use the exact words of the person being interviewed. • Structure. We will want to develop the structure of the interview based around the information we are seeking to obtain, to ensure there is a clear direction to the event. The structure is important but we will also need to build a degree of flexibility into the interview plan to respond to information as it is received. There is a lot to remember when preparing an interview to make sure we get it right first time. One way to be sure we have not overlooked anything is to design a checklist based around the points discussed above and check off each aspect with a note on how we have met each requirement.

5.6 MORE ON STRUCTURE There will come a time when we are seated in front of an interviewee and the interview starts. Some investigators will pull out a rough note on questions to ask and start firing out questions, pausing only to record the detailed

Basic fieldwork tools – interviewing

105

response before firing off the next question. After a half-hour of what appears to be a fierce tennis match the questions stop and the interview is over. More laid-back investigators may sit back, smile and ask the interviewee to think of anything that might be of some importance, which after half an hour of rambling comments, slows to a halt and the interview is over. The Basic approach sits between these two extremes and requires a structure for each interview that is learnt and used by the investigator to ensure a professional approach. One useful structure for the interview is set out as follows:

1. Introductions. The investigator should make clear who is present. Note that a Basic investigation will not normally require the presence of a second investigator or other person in the interview room. The time available for the interview should also be outlined. 2. Atmosphere setting. Note our earlier discussion about the Four Dimensions of Rapport when setting the atmosphere. We want the interviewee to talk to us openly and without fear, and provide all the required information. It is more than simply putting the interviewee at ease. It is about getting the interviewee to see positive value from the investigation in clearing the air and helping everyone move forward. The investigator will want to appear serious, professional and helpful in seeking to resolve problems by being fair but also robust. 3. Context setting. Building on the Four Dimensions of Rapport, the next phase of the interview sets out what we are looking at and why. Some people are gregarious and love to engage in open debate about anything that appears interesting or better still relates to their personal interests. The Four Dimensions model says that we need to convince the interviewee that the matters under investigation are important and worth perusing by describing the terms of reference, even if they relate to past events. We will want to tell the interviewee what we are looking into, and that we want information on the matters at hand, normally in chronological order. A short account of the way the investigation is conducted and the standards that we observe to this end may also be mentioned. The need for strict confidentiality should be discussed at this stage. 4. Documentation. We will need to explain that a record will be maintained before this factor surfaces and causes distrust between the interviewer and interviewee. The need to maintain a record of the interview should be mentioned, along with the rules on which parties will see the record and whether a copy will be made available to the interviewee. For key interviews where, for example, an employee has made a serious complaint, the interview note should be prepared and sent out to the complainant after the formal interview for agreement, alteration if required and signature.

106

Internal Investigations

5. Questions and answers. The questions and answers phase is quite straightforward. We will start the questions with a request for information regarding the interviewee to be sure we understand their position, role, responsibilities, proximity to the issues in question and any special factors (for example, whether they are new to the job) that we need to take on board. We will set out the areas that need to be covered during the interview as an outline checklist, not as cumbersome questions that are repeated verbatim. 6. Summaries. For interviews that include information that addresses crucial aspects of the investigation, the interviewer can re-check key facts by summarising them and asking whether the record appears to be correct. Key comments can be checked for their accuracy. In some cases, the entire interview will need to be summarised in front of the interviewee to ensure all relevant matters are recorded. After summarising, the question may be raised as to whether there is anything that should be added to the record or clarified further. 7. Improvements. Some interviewers add an extra part to the interview by asking for any suggestions or views on improving current arrangements, as this simple device can elicit strong ideas that might make it to the final report. 8. Next steps. Poor interviews result in the interviewee leaving the room confused and unsure as to what will happen next. The ‘next steps’ phase of the interview is aimed at maintaining the positive atmosphere by telling the interviewee exactly how we will proceed. A list of any items or documents that have been promised by the interviewee should be recorded on a separate note and this information re-checked at the ‘next steps’ phase of the interview. 9. Any questions? It is good practice to ask whether the interviewee has any questions at the conclusion of the interview. In fact, it is also a good idea to ask this same question when we introduce the terms of reference for the investigation. 10. Close. The interviewer will want to keep control over the interview and this happens by sticking to the structure and setting the agenda. This control is reinforced by formally closing the interview by saying that it is at an end and repeating the confidentiality rules. An important addition to the closing remarks is to state that the interviewee may need to be seen again if required and that this is standard practice in most investigations. The interviewer can ask whether the interviewee is happy with the interview before the usual handshakes and goodbyes.

The structure is important but should not be rigidly applied. If someone walks into an interview room, sits down and straight away reveals a great deal of

Basic fieldwork tools – interviewing

107

crucial facts that have a major impact on the issues in question, it would be wrong to stop this flow of important information.

5.7 GETTING RESULTS We have prepared the interview and determined a clear structure that should ensure we get the results we want – all the information relevant to our enquiries. Even if we have carefully planned the interview, it is the performance during the interview that will determine whether we can make real contact with the interviewee and achieve our aims. Getting results is not always easy. There is much that could go wrong and, going back to our Four Dimensions of Rapport, people will not always see the investigation as both important and worthwhile supporting. Busy managers, staff who feel they are under pressure and employees who have had bad experiences with their managers may carry with them an accumulated feeling of ‘ill-will to all men’. It is also hard to get people to stay within the terms of reference for the investigation. Some people will talk too much and drift into areas that have no bearing on the investigation. Others use a minimalist approach where they use words so sparingly that it is hard to get much information at all. We do not want open-ended debate, but we also need to avoid cryptic yes/no answers. Moreover, we do not want guarded responses or answers based on telling the interviewer what the interviewee thinks is required of them. The interviewer will want to jog alongside the employee and achieve some harmony, where they are going at the right speed to encourage effective communications – jogging neither too fast, nor too slow. An experienced interviewer will develop this ability to ‘tune into’ someone so that the two parties can communicate in a meaningful way. In terms of getting good results, there are several techniques that can be applied: • Develop commonalities. When two people meet for the first time, the two parties may have very little information about each other. As the interview progresses, some closeness and commonality will develop. The interviewer may give clues on their approach, and approachability, by engaging in a limited amount of small talk and asides. But not so as to give the impression that the interview is not seen as a serious matter. • Determine needs. Keep in mind what the interviewee will want from the proceedings. It may be that these needs revolve around a sensitive approach, honesty, a briefing about the investigation and information on how the information given during the interview will be used. More than anything, the interviewee will want a fair deal with no hidden agendas.

108

Internal Investigations

• Uncover any vested interests. An interview is a fair exchange of information based around the evidence needed to progress the investigation. Any personal interests that interfere with the truthfulness of this information will need to be fully appreciated. The interviewer will want to explore the possibility that the interviewee is motivated by personal bias or vested interests. Where the reasons and actions of the interviewee come into play, it is a good idea to probe the underlying reasons by simply asking why did you do that, report it, refer it? – and so on. • Use persuasion. Where people do not want to be forthcoming it is possible to persuade them to be more open. Getting the interviewee to open up means gaining their confidence and telling them why their information is important to the organisation. Being supportive, and encouraging this openness, may help persuade the interviewee to engage and assist. • Use questioning techniques. Good interviews involve the free flow of useful information. The careful use of questioning styles can help. Simple facts can be obtained by closed questions that require a yes/no answer and straight data such as name, address, time and so on. Open questions demand longer responses such as, ‘tell me about . . ., explain how . . ., describe . . .’. Probing questions take a given response and seek a deeper meaning, such as ‘when you said you could not do it, tell me about your apprehensions . . .’. A good mix of these questions will help progress the interview, although if we start with too many closed questions the interviewee could get stuck into a monosyllabic answering style. • Get the story. We have said that interviews are about the free and fair flow of information and not just a series of questions and answers. One approach is to get hold of the real story by going through a chronological ordering of events where we get the logical flow of what happened. The key to using the chronological approach is to allow time for reflection and fixing memory lapses as the interviewee puts together the events in their own time and in a way that best suits them. • Seek explanations. An interview is a great chance to clarify issues and check facts. It is a rule of natural justice that whenever evidence is secured that reflects badly on someone, that same person must be given the opportunity to respond to this evidence. If there is any such evidence available then it is right to present it to the person whenever they are next interviewed and to consider all possible explanations. • Confirm consistency. Interviews can also be used to present one source of information and check it against what someone else has said to check consistency. If one person suggests that two employees are obviously having an affair, we may ask the same question of another employee who would also know whether this contention is true or not. • Consider blockages. A good interviewer will always bear in mind anything that might hinder the reliability of the interview. Blockages may

Basic fieldwork tools – interviewing

•

•

•

•

109

consist of poor memory, a long lapse of time between the events and present day, a vested interest, a lack of trust in the investigation process or a feeling that no one cares about the interviewee’s views. A few minutes thinking through how obvious blockages can be overcome will help. We deal with difficult interviews separately below. Consider reactions and demeanour. A study of body language can pay good dividends. An interviewee can give non-verbal clues as to their real thoughts. A defensive posture may suggest a tendency to conceal facts. Looking away can reveal discomfort with the subject or aspects of the interview. Pointing can indicate aggression and some sensitivity about certain topics. The key is to probe areas where there is a change in body language to see whether there are underlying matters that can be isolated. One good technique is to look straight into the eyes of an interviewee when asking a very serious question that requires a straight answer. Get opinions. Interviews take time and cost money. We have said before that one aspect of an investigation is to look for positive ways forward and not just dwell on the past. Taking these two concepts together, the interview is a good forum to ask whether there are any suggestions on helping everyone move forwards, or to make specific improvements. Witness statements. Use formal witness statements for important items of specific evidence that are provided by the person in question. The witness should provide general information on their name, post, role, responsibilities, length of service and contact details. They will then write down what they saw and know to be true in their own words before signing the statement as a true and complete account of their evidence, along with the investigator’s signature. Where the witness refers to other documents, these may be attached to the witness statement as exhibits x, y and z. Witness statements are quite formal and should only be used for important items of evidence that have a real impact on the investigation. Each witness will be assessed to judge whether they have a vested interest in the events being investigated and whether they are seen as credible or not. Experts can provide expert opinion on an issue in question while an eye witness actually sees the incident in question. It is generally recognised that hostile witnesses will tend to be unsympathetic to the investigator, unlike friendly witnesses who will tend to be supportive of the investigator. Secure powers. Formal written delegations to seek answers and access records should be obtained from the board. This document can be referred to in the unlikely event that there is a major dispute regarding the need to attend an interview and provide information. It should also be established that giving false or misleading information to an internal investigator may constitute a disciplinary offence. The delegated powers should be used sparingly as we will want to avoid claims of intimidation.

110

Internal Investigations

• Prompt poor memory. Everyone is fallible and memory lapses do not mean the person being interviewed is trying to formulate a lie. In fact, people who appear to have total recall are more likely to be quoting a made-up story than those who hesitate and need help to remember facts. It is often difficult to remember events some time ago or events that had little significance at the time. Good interviewers understand this concept and are happy to help the interviewee by forming a time line, prompting them, summarising incidents and being patient in trying to get the real story. One technique is to allow the interviewee to change their mind and even restart their recollection of events as they stop, reflect and try to remember the past. • Be prepared to stop. When the interview steps into new territory that may imply fraud, disciplinary offences, breach of safety procedures or other sensitive matters it may be necessary to stop the interview and refer the entire matter to a separate investigatory forum. When a complaint appears to arise from a simple misunderstanding then again, it may be possible to bring the proceeding down a gear and ask whether the interviewee wants to consider withdrawing their complaint or grievance. If there is a natural short-cut possible to avoid a full investigation then make sure the complainant is given sufficient time to reflect and seek advice from their representative or someone else before making a decision. • Keep the door open. Investigations flow and change as the information sheds light on the issues under review. It is always necessary to tell whoever is involved in the fieldwork that they may need to be seen again if there are new developments. Moreover, interviewees should be told that they should contact the investigator if any further information comes to their attention or where they simply did not recall the matter in an earlier interview. The investigator must be given the option to return to people they have already spoken to, as many times as necessary. Each of the above items represents a possible technique that can be used by the investigator during an interview to ensure they are able to secure the best information possible. Each technique, if properly used, can bring a richness to the interview process that will benefit all sides of the investigation.

5.8 EXPLORING EXAMPLE 10 We can return to the example used in the previous chapter to examine how interviews can be used to progress the fieldwork stage of the investigation.

Basic fieldwork tools – interviewing

111

Example 10. You have been asked to investigate complaints from several local offices that the risk registers they have been told to compile are seen as a waste of time. Ascertain the issues

Substantiate the claims

Infer the implications

1. There is dissatisfaction from some local offices regarding the need to submit risk registers (RRs) to head office each month. 2. The current risk registers are failing to ensure risk is managed to an acceptable level.

All but one of the local offices is experiencing problems with compiling and using RRs.

There is a major problem involving local management dissatisfaction with using RRs.

The current RRs do not reflect real risks to each office and fail to help management make good decisions. The current standard is sound but the training in using RRs is aimed at junior admin staff not the managers. etc.

The RRs are not making a real impact on managing risk.

3. The corporate standard on preparing and using registers is in need of improvement. 4. Etc.

INTERVIEWS TO BE CARRIED OUT Possible questions – local managers 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Role and responsibilities? How long in the job? Role in respect of risk registers (RRs)? Are you aware of corporate RR procedure? How are the RRs prepared? How often are they updated? How much use are the RRs? How much training have you received? How could the use of RRs be improved? Anything else?

Possible questions – junior admin staff 1. Role and responsibilities? 2. How long in the job?

The standard can be retained but the training needs to be refocused to aim it at local managers. etc.

112

3. 4. 5. 6. 7. 8. 9. 10.

Internal Investigations

Role in respect of risk registers (RRs)? Are you aware of corporate RR procedure? How do you prepare the RRs? How often are they updated? How much contact do local managers have with the RRs? How much training have you received? Are you happy with the current arrangements? Anything else?

Possible questions – head office staff 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Role and responsibilities? How long in the job? Role in respect of risk registers (RRs)? Are you aware of corporate RR procedure? How do local offices prepare their RRs? How often are they updated? How do you use the local office RRs? How much training have you received? How could the use of RRs be improved? Anything else?

Possible questions – risk management trainers 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Role and responsibilities? How long in the job? Role in respect of risk registers (RRs)? Are you aware of corporate RR procedure? How is RR training organised? How often is the training updated? Who attends the training? How is the effectiveness of training assessed? How could RR training be improved? Anything else?

It is clear that there are several different parties who should be interviewed across all stages of the fieldwork to conduct the investigation into the value from risk registers. These interviews should be used with due care and attention to ensure we get the right results.

5.9 IS IT THAT EASY? We have designed various models and approaches to help us perform our interviews. We have also listed many simple techniques to get the most out

Basic fieldwork tools – interviewing

113

of our interviewees. But there is always scope for things to go badly wrong. It is possible to anticipate some of the usual problems that occur during an interview, and think through possible solutions as set out in Table 5.1.

Table 5.1 Dealing with difficult situations Potential problem

Possible strategies

Lack of trust. The interviewee may feel unable to trust the investigator and the adopted method.

Explain the investigation process and the independence of the investigator.

Memory lapses. The interviewee may have a poor memory leading to gaps in the information given.

Go through the story several times and try to close gaps and inconsistencies in an encouraging manner. Check information and look for inconsistencies by re-asking questions and seeking confirmation.

Lying. The interviewee may intentionally lie to the investigator. Slippery suspect. The interviewee may be the person who is suspected of being involved in an irregularity.

May need to refer this matter to fraud investigators for a formal interview under caution.

Flippancy. The interviewee may treat the entire interview as a humorous and irrelevant matter.

Emphasise the seriousness of the matter and the implications of a lack of full cooperation.

Aggression. The interviewee sees the investigator as a threat and becomes aggressive.

Seek to identify the source of the threat and suspend the interview where the aggression continues.

Shyness. The interviewee may be an introvert who finds it hard to talk fluidly and openly.

Encourage the interviewee and listen carefully, assigning sufficient time and attention.

Eager to please. The interviewee may try to say what they think is expected of them.

Emphasise the need for reliable evidence and the problems that result from skewed facts.

Changeability. The interviewee may continually change their version of events.

Do not assume that the interviewee is lying but be prepared to go through events several times.

Cynicism. The interviewee may feel the investigation is a whitewash with a predetermined outcome.

Emphasise the importance of the investigation and go through the steps taken to ensure independence.

Helping out a friend. The interviewee may seek to present information in a way that protects others.

Emphasise the need for reliable evidence and the dangers from incorrect or incomplete information.

114

Internal Investigations

Table 5.1 (Continued) Potential problem

Possible strategies

Earlier lies. The interviewee may seek to hide misrepresentations previously made. Everyone does it. The interviewee may cover up questionable practices that people engage in. Showing off. The interviewee may boast of having more information than they really possess. Ideas to look good. The interviewee may feel obliged to provide new ideas. Poor performance. The interviewee may present information to hide poor performance and errors. Bad hair day. The interviewee behaves badly for no discernable reason.

Start the interview with a clean sheet and explain the need to give complete and accurate information. Remind the interviewee that any misrepresentation can lead to a disciplinary offence. Probe information that should not be in the possession of the interviewee. When asking for ideas do not suggest these new ideas are always required. Probe motives for providing information and the impact on the individual’s personal performance. No strategy can deal with all problems – the investigator must appreciate that some interviews will not go smoothly.

5.10 TO CLOSE To close this chapter we should restate that the interview is a powerful tool for the investigator and, if applied in a professional manner, can provide good results. There are several techniques for getting the best from interviews, including good preparation and anticipating and responding to potential difficulties to ensure we can secure reliable information. To reflect the importance of talking to people we have developed an entire fifth Basic Principle for effective interviewing, which is repeated below as follows:

BASIC PRINCIPLE FIVE Professionally planned and conducted interviews should be used throughout the investigation whenever it is possible to obtain relevant information from people who can assist the investigator.

BASIC GUIDANCE When planning and conducting an interview you should consider the following 10-point guidance:

Basic fieldwork tools – interviewing

115

5.1. The importance of conducting professional interviews should be established in terms of ensuring the efficient completion of the investigation. 5.2. Issues that relate to a widespread problem in an organisation may be addressed using an inquiry panel that interviews all those people who have information that will help identify and address the problems at hand. 5.3. Interviews should be used throughout the five stages of the Basic approach to gather information relevant to the investigation, although they will be more prevalent during the ascertaining and substantiating claims stages. 5.4. All interviews should be properly prepared, with due consideration given to notice, promptness, indicating issues, confidentiality, location, ensuring attendance, rules on being accompanied, recording and making reasonable adjustments for the interview. 5.5. All interviews should be properly structured, having due consideration to making introductions, atmosphere setting, context setting, documentation, preparing questions and answers, giving summaries, seeking ideas for improvement, indicating next steps, allowing for final questions and formal closure. 5.6. Suitable techniques and good interpersonal skills should be applied to communicating with the interviewee to ensure the best results from the interview. 5.7. Any information arising from an internal investigation that suggests questionable behaviour by a specific individual should result in an interview of the person in question to ascertain whether there is any reasonable explanation. 5.8. The interview should be stopped where the information given needs to be examined using a separate corporate procedure outside the remit of the internal investigation, and the case referred to the appropriate responsible person. 5.9. Witness statements should be used to record important statements that have been supplied by an interviewee. 5.10. The interviewer should be aware of, and apply, the available strategies to counter some of the common difficulties that arise during some interviews. Note that Chapter 7 contains several checklists to support the abovementioned guidance. We have completed the fieldwork stage of the investigation, using interviews to gather information where possible. The next chapter seeks to put our results together and communicate our formal opinion and recommended ways forward.

6 Communicating results

We turn now to the all-important task of communicating the results of our investigation. Chapter 5 went through interviewing as a tool, although poor investigation reports simply summarise the results of all the interviews that were conducted. Communicating the results is so much more than just presenting the interviews. Chapter 4 discussed the detailed fieldwork that will form the basis for the actual report. This chapter deals with the type of reports we might deliver, reporting structures, developing an opinion and recommendations and the overall process for delivering credible results. We also introduce several models that can be used to help develop good reports. Each chapter of the book will identify a Basic Principle and our sixth such principle is stated as follows:

BASIC PRINCIPLE SIX The results of an internal investigation should be effectively communicated to the sponsor and other authorised parties in a professional manner that conveys a formal opinion along with any recommendations that result from the work carried out.

6.1 WHY COMMUNICATIONS? We need to make clear right at the outset that people are generally not interested in reading reports. They are not prepared to work through pages of information and detailed findings uncovered by an internal investigator. Most people living in the modern age react to nuggets of information, or more likely, hard-hitting sound-bites which enable them to act, or react, to the issue in question and quickly move on. Moreover, reports that focus on an investigation of past events that may have appeared interesting when the problem first occurred several months ago will probably appear even less attractive to current readers. However, the investigator will need to discharge his/her responsibilities towards the investigation and will naturally be extremely involved in the fine detail of the fieldwork and how this is presented in reports. Basic investigation standards are designed to create better

118

Internal Investigations

corporate accountability, and this means the report and the way the results of the investigation are reported might be read by anyone authorised to access the report. We set the terms of reference at the start of the investigation and the template in Figure 6.1 makes it clear that we need to state the results for each item in the terms of reference. The report falls near the end of our template as this is the vehicle that is used to formally establish the results from applying the Basic standard. Corporate Accountability

RESULTS

TOR

BASIC STAGES: INITIALPLAN PLAN INITIAL TOR: TOR:

Diary of the Investigation DATE ITEM

TASK

Begin Investigation

DATE

Sign-Off FIELDWORK – SUMMARY SCHEDULE FIELD WORK –Summary Schedule TOR: TOR: ISSUES

EVIDENCE

IMPLICATIONS

Evidence Schedule Issue: Aim

Technique

Ascertain Issues Substantiate Claims Infer Implications

Results

Quality Assurance

REPORT REPORT Draft/Final DRAFT/FINAL

Communicate

TOR FINDINGS

Results

Timeline of Events DATE EVENT

Risk Management Impacts

RESULTS

TOR

Figure 6.1 Statement of results in the Basic template.

6.2 TYPES OF REPORTS The investigations report is an account of the investigation and its findings. We have mentioned that many people in busy organisations find it hard to relate to detailed published documents that have to be carefully studied. Most people want what we have called information nuggets that tell them: • What is the issue? • What are the implications? • Is there anything we need to fix?

Communicating results

119

Any published document that does not address these three questions in quick-time may well end up left in the in-tray (or in-box) along with the many other dozens of documents that are circulated each day in a typical organisation. The Basic approach suggests that we need to consider the use of different types of reports for different uses, based around the general theme of communicating effectively: • Fact-finding report. Good organisations will adopt a version of the Basic standard that states that a fact-finding report will be prepared within, say, a set number of days of starting the investigation. This report could be a single-page document listing the issues in question and indicating whether there needs to be a formal investigation. The document should be presented to the sponsor and it should lend itself to the preparation of an initial plan for the full investigation. • Interim reports. A reporting protocol should be in place regarding progress reports, particularly for investigations that run over several months. The sponsor may ask for a weekly update in the form of a brief interim report or ask that each of the three Basic fieldwork stages be reported separately when complete. • First draft investigations report. The investigator should prepare a draft report that sets out the terms of reference, findings and conclusions for circulation to relevant parties so that factual accuracies can be examined and cleared. It is possible to set standards for first drafts where the report is prepared within, say, two weeks of the completion of the detailed fieldwork. • Second draft investigations report. If the first draft results in more than a few alterations in line with feedback from all those who have been asked to comment on the contents, it is good practice to prepare a second draft of the report. This new version may contain any recommendations that the investigator feels are appropriate. • Final investigations report. When the draft report has been cleared it can then become a final report that is sent out to those who appear on the agreed circulation list. • Executive summary. Whatever the format of the final report, the investigator should prepare an executive summary consisting of not more than two pages that sets out the background, methodology, findings, conclusions and recommendations of the investigation. This technique is based around our view that most people really do not want to study anything that runs to more than two pages long. • Timeline of events. A chronological list of the events that occurred and which have been confirmed should be prepared for investigations into specific past events and incidents. A well-prepared timeline may of itself be seen as a formal report by those parties who just want a confirmed account of what happened.

120

Internal Investigations

• Follow-up report. All final reports should be followed up to track progress in implementing any recommendations that were suggested by the investigator. Any problems with a lack of effective action without reasonable explanation should be reported to the sponsor and the person responsible for the area affected by the recommendations. • Personal briefings. Returning to our original contention that people want to know about the issues, the implications and what needs to be done to address the matter, these three factors can be quickly addressed through briefings. Here the investigator may make a series of presentations as part of the reporting process, although it is good practice to prepare a formal document to back up the various representations that are being made by the investigator. • Fieldwork summary. We have said that many people brought up in the e-business age do not want to read formal reports. If the Fieldwork Summary that we discussed in Chapter 4 is well prepared, there is a strong argument suggesting that this document in itself may be seen as ‘the report’. The Fieldwork Summary describes the issues that were investigated, the evidence that was gathered and the conclusions gained from the fieldwork. If the respective recommendations are spelt out against each weakness that has been isolated, we have all that is needed to communicate the results of the investigation. The individual Evidence Summary Schedules will contain any detailed information if there is a need to explore specific issues in more depth. In future, effective communications may simply consist of a personal briefing (or even a podcast) in conjunction with the documented Fieldwork Summary and Timeline of Events. There are many choices of how the results of the investigation may be communicated and different users will want different types of reports. The sponsor may want regular progress reports accompanied by personal briefings from the investigator. People implicated in the investigation will want to see a detailed first draft that they can comment on. Senior managers may be more interested in the executive summary of each type of report, while board members may simply want to view any key findings from the final report. A further consideration that can be applied to encourage engagement from stakeholders is to use a reporting format that means the report is kept as concise as possible. The sponsor will want to look at the more detailed fieldwork summary as part of the quality assurance review process. The investigator will aim to select the best mix of reports and agree the adopted approach with the sponsor along with a ruling on who should have access to the reports. A corporate access protocol should be in place, which means some reports may be copied to senior managers, the human resources and legal officer along with the Chief Internal Auditor. Persons implicated in the investigation will have a right to respond to the findings.

Communicating results

121

6.3 STRUCTURING THE REPORT We have said that reports come in many different shapes and sizes, which makes it difficult to set a fixed structure. There are several principles that should be observed in terms of the way information is presented, regardless of the format and media used by the investigator. The investigator will want to communicate the following matters: • • • • • •

Why the investigation was carried out. The adopted terms of reference. Any special factors involved. Background to the issues and persons involved. The methodology for performing the work. The evidence that was obtained and how it was evaluated, including any gaps or instances where evidence was not available. • The actual findings in terms of what the investigator believed happened, any inconsistencies and the severity of the implications. • The sequence of events and information relating to documents reviewed, people interviewed and any briefings made to the media and others. • The recommended next steps and ways forward. We could add to this list but if the report were to provide detailed commentary on all the above, it would become a cumbersome document that we have already said would be hard for readers to digest. One way of helping to arrive at a focused and concise document is to set a defined structure for the report. Even if the investigator’s approach is to deliver personal briefings as the way of communicating their findings, a structured document must nonetheless be prepared to support any presentations. One useful structure is set out in Figure 6.2. We can return to the three main questions that need to be addressed to work out how the report structure can help the investigator communicate with interested parties: • What is the issue? This is addressed by the background, special factors, issues and timeline of events. • What are the implications? This is addressed by the work carried out, detailed evidence and conclusions. • Is there anything we need to fix? This is addressed by the recommendations. It is a good idea to keep these three questions in mind when writing reports or preparing any presentations, progress notes or personal briefings.

122

Internal Investigations REPORT INTO XYZ

EXECUTIVE SUMMARY Terms of Reference Methodology Findings Recommendations

MAIN BODY OF THE REPORT Background to the Investigation Work Carried Out Special Factors Issue One: Background Detailed Evidence Conclusions Recommendations

Appendices

Issue Two: Background Detailed Evidence Conclusions Recommendations

List of Documents Reviewed List of Interviews

Timeline Of Events

Issue Three: Background Detailed Evidence Conclusions Recommendations

Figure 6.2 A defined report structure.

6.4 TIMELINE OF EVENTS One useful technique is to prepare a document that sets out the sequence of events regarding the issues that are being investigated. We have referred to this Timeline of Events document earlier and it is placed in our Figure 6.1 template as a separate item. Many investigations involve unravelling a series of incidents and events that led to the problem that had to be addressed. Staff grievances and specific incidents, such as missing computer disks containing personal data or a misunderstanding that has led to the threat of industrial action, will entail facts that together ‘tell a story’ that the investigator is trying to capture. The truth lies within the real story that the investigator is seeking to obtain. Other investigations are less prone to the Timeline of Events approach where, for example, a processing system may be underperforming and needs to be fixed. The problem may lie in the way the system is being employed by staff and the fact that it is unreliable or ambiguous. In this case, the investigation will be aimed at reviewing the system and ascertaining where it is failing and how weaknesses can be remedied. Several

Communicating results

123

incidents may be documented as part of the investigation, but the essential fieldwork is not focused on a sequence of key events over a defined period. Returning to the types of incident-based investigations that mean problems arose from a series of occurrences, the Timeline of Events document will be prepared to accompany the report as an appendix, as a summary within the report under ‘background’ to the issues, or as a separate document that can be produced to aid understanding of the problem and why it arose. The important benefit from the Timeline of Events approach is that the investigator can ensure that all information placed in the document has been verified as reliable, so that the document itself will represent a full account of the problem. Some interested parties may be able to use the document as their main source of information, as a form of formal report that is needed to convey the required messages. The detailed version of a well-written Timeline of Events document will show: • • • • •

The date. A description of the event/incident/proceeding. The parties involved. The documentations or statements that confirm that the event did occur. Where appropriate, notes that make it clear that an event is not supported by any documentation. • Any concerns with gaps or inconsistencies. • Notes on how unclear items in the timeline were followed up by the investigator. We have already made clear that for some types of investigations the Timeline of Events document, along with an opinion from the investigator, may be seen as a report in its own right. The investigator will need to clarify the status of the material in the document, which may have started out as an unverified note of several incidents made by a complainant. Wherever possible, a summary version of the Timeline of Events should be included as an appendix to the investigator’s report.

6.5 THE INVESTIGATOR’S OPINION We now arrive at a most important part of the Basic approach to carrying out investigations – that is, the final opinion. The start of the template in Figure 6.1 asks that the terms of reference be established to get a result from the work that will be undertaken. The bottom line of the template suggests that the result for each item of the TOR is the final product that will add value to the organisation and the way it conducts itself. There is no hiding place for the investigator, who must make a clear statement of what is believed to be

124

Internal Investigations

the true position or, more correctly, the position that is best supported by the available evidence. A complaint or grievance must result in an opinion that provides a clear position on whether the claims are upheld or not. We would hope that most of the work in formulating an opinion will have been completed when the Fieldwork Summary is developed, which was dealt with in Chapter 4. The available evidence will have been examined and assessed for reliability, as discussed in Chapter 4. It is important that the report is balanced and takes on board representations made by all parties affected by the findings. For example, where it is clear that an employee has acted in an inappropriate manner, it is good practice to record any explanations or claims by the employee that the evidence is unreliable. The report-writing stage provides another chance to stand back, review the evidence and write the report or briefing note. The opinion stage is where many investigations go wrong. Dozens of interviews may have been held, while many files and documents may have been examined, along with several strong views elicited from people who contacted the investigator. The investigator may end up staring at a large file of documents, seeking to find a way of expressing an overall conclusion. Under this sort of pressure, comments can be made such as: • • • • • •

There is some evidence to support the original contentions . . . We have gathered a wide variety of contrasting views . . . There is some confusion over the exact condition of . . . On balance, there is cause for concern . . . We have arrived at a crucial position . . . And so on . . .

Each of these statements is, in itself, meaningless and can be misleading to someone reading the report and looking for a clear position from the investigating officer. We have to go back to the Fieldwork Summary to arrive at sound conclusions and a formal opinion. Chapter 4 discussed the Fieldwork Summary, which will establish a clear line of reasoning from the original issues to the supporting evidence and the actual implications from the evidence. The investigator need not search for some clever commentary for the report; it is only necessary to spell out the implications of the evidence on the issues and claims under investigation. The investigator’s file will speak for itself and lead to an overall conclusion, which is why the Basic approach requires a structured method of performing and documenting fieldwork. The temptation to put catchy sound-bites into the conclusions should be avoided. The investigator need only place the final Fieldwork Summary notes into a formal opinion on the issues/claims that were investigated. We will need to ask: • Does the evidence support the claim? • And are there any other considerations to take on board?

Communicating results

125

The investigator will address the strict issues from the terms of reference when setting out an opinion but will also think through underlying causes and the wider implications of the results. For example, an investigation into a claim of bullying will opine as to whether the claim is upheld or not. But, the investigator may also express concern over the lack of a clear policy on bullying that meant it was hard to establish the case. This ‘wider picture’ thinking means an opinion may address the issues at hand and other matters that impact on these issues. Ways of dealing with both the specific and general implications of the fieldwork can be examined by using a framework that is set out in Figure 6.3 via the Hour Glass Opinion model that may help with preparing messages for the report. Allegations/issues under review The terms of reference Evidence examined Specific conclusions

ASSESSMENT

Generalisations

Figure 6.3 The Hour Glass Opinion.

The Hour Glass Opinion model suggests that we take the original allegations or issues under review and then work out which of them are significant enough to include in the terms of reference for the investigation. Where there is strong evidence to support these issues, we can draw a clear conclusion on whether any claims are likely to be true or not. This means that wider-ranging allegations are tackled, so only those that are left after this process of elimination make it into the investigator’s specific conclusions. The suggestion is that we take the specific conclusions, assess the implications and then seek to make broader assumptions about the wider impact on the organisation. For example, we may investigate allegations that our call centres are making misleading claims to potential customers and this is centred on unclear delivery dates which form the terms of reference for the fieldwork. The main evidence

126

Internal Investigations

may be derived from an examination of a dozen customer contacts at one of several call centres and we can draw several specific conclusions. We may then go on to broaden our specific conclusions over misleading information by suggesting that this could impact on other call centres and other types of information given out to customers as a wider observation about the possible impact of the problem. We must be careful about taking a few observations and drawing wide-ranging conclusions from this evidence. But we also must be careful about drawing conclusions from specific instances without considering the possible wider implications, if these problems represent a worrying state of affairs. The investigator can only draw conclusions from specific evidence, but it is possible to point to the possibility of wider problems if the specific issues arising from, say, poorly trained call centre staff are not tackled. This last point takes us on to the next item for discussion – the investigator’s recommendations.

6.6 RECOMMENDATIONS Like the opinion-forming stage, the task of establishing suitable recommendations will have been addressed during the investigation and recorded in the Basic Fieldwork Summary. We said at the start of the book that internal investigations provide an opportunity to create positive change by identifying weaknesses and relevant improvements. Major scandals are always followed by public statements that ‘this must never be allowed to happen again . . .’. For example, aggressive behaviour from some managers will affect staff morale and may open the organisation to unfair dismissal or personal injury at work claims, if the underlying negative culture is not addressed. Recommendations from internal investigations provide a good opportunity to allow the organisation to move forwards. The final column of the Fieldwork Summary will show the implications of the evidence that has been gathered to support the claims, allegations, issues and suppositions. A well-prepared investigator will be able to uncover the underlying causes of these problems and so isolate steps that need to be taken to address these causes. Where allegations are being investigated and upheld, the recommendations will also address action that is required to remedy the current position. A staff member who has lodged a formal complaint about being unfairly treated by their line manager may have their complaint upheld by the investigation. One recommendation will need to deal with the employee, which may make a transfer to a different team most appropriate. Meanwhile, a further recommendation will need to deal with the line manager, where training, coaching or even a reprimand may be required. The investigator will also look at why the situation was allowed to develop unchecked and may recommend a better way of working together by suggesting that corporate values be strengthened around better

Communicating results

127

team working and colleagues respecting each other. A ‘speak-up line’ may be established where staff members can talk to someone when they have seen a colleague being bullied. Problems can be tackled in different ways, but it is important to remember that recommendations cannot arise as a series of ad-hoc ideas from the investigator – they must arrive as a natural progression from the Fieldwork Summary. It can be hard to work out the scope of the recommendations; how far should the investigator go in seeking new working methods and corporate procedures? One model that can be used to set a frame for formulating recommendations is found in what we call the ICAC Approach, which uses four factors to establish a reasonable framework: 1. 2. 3. 4.

Issues. We know what is at stake. Causes. We know why the problems arose. Accountabilities. We know who did what. Controls. We know how to tackle system weaknesses.

We have mentioned that the Fieldwork Summary will indicate the first two aspects of the ICAC framework: the issues and underlying causes. The recommendations will draw from this information to focus on the final two aspects: the accountabilities and controls: 3. Accountabilities. We will need to consider recommendations to reflect any failings in accountability by anyone implicated as part of the underlying causes of the problems. Moreover, we will want to consider any redress for anyone who has been unfairly treated. Any failings in professionalism, integrity and performance should be addressed by effective actions, normally training, coaching or reprimands. Further recommendations may seek to deal with any person who has been unfairly treated by an effective remedy, normally through an apology, acknowledgement of the problem, conciliation, counselling and/or any suitable action to protect their interests. In extreme cases we may need to recommend that the disciplinary procedure be initiated to deal with a serious breach of the code of conduct. 4. Controls. Here we are more concerned with failings in systems and operations where controls need to be improved. At times, the controls are in place but are not fully understood or are not being adhered to. It may also be the case that there are gaps in the current arrangements which need to be closed by better controls. An investigation into routine abuse of the travel and expense claiming system may result in recommendations for improving controls by better monitoring of expense vouchers and a clear approval process for overseas travel. In extreme cases we may need to recommend that the current procedure be subject to a full review by consultants or internal audit to address significant and fundamental weaknesses.

128

Internal Investigations

There are cases where the investigation is carried out and, other than an apology or a ‘clear the air’ meeting, there is no further action required. The investigator should not feel the need to fabricate recommendations where the matter at hand does not need any further intervention. One important point to note regarding recommendations is that the investigator will advocate a course of action but is not the person responsible for effecting this action. The respective roles are set out as follows: 3. Accountabilities. The sponsor will decide how best to reinforce failings in accountabilities based on the investigator’s recommendations by making strong representations to the line manager of the person in question. 4. Controls. The person responsible for the area where controls need to be improved is responsible for effecting the required changes. The investigator will want to know what steps have so far been taken to remedy weaknesses, and will need to discuss the required improvements with the responsible manager before they are placed in the final report. There is little to be gained in recommending changes that are impracticable or which have already been made by management before the investigation has been concluded. We noted earlier in the book that, when setting up an investigation, we may need to suggest some immediate action that is required before the full investigation is concluded. For example, we may have temporarily transferred a staff member who complains of being sexually harassed while we conduct the investigation, only to recommend making the move permanent as well as disciplining the manager in question. The golden rule is that the investigator should try to talk with the person responsible for implementing any recommendations that will be made before they appear in the report, and convince this person that the suggested action is required. In this context, effective recommendations are about more than just placing a few suggestions in the report, they are about convincing senior people to act in response to the investigation.

6.7 RECOMMENDING BETTER INTERNAL CONTROLS We have discussed the importance of recommending improvements to internal controls where this might help avoid similar problems occurring in future. Good control starts with a good control framework, which means people understand risk, communicate well, appreciate how their aims, responsibilities and work fit into the wider organisational systems and crucially adhere to a firm platform of ethical values. When this framework is in place, it is possible to design individual controls to counter individual risks. Some controls are wide-ranging concepts, while others are simple devices to increase the

Communicating results

129

chances of achieving objectives. Controls should help stop bad things happening and should encourage the right things to happen. Some classify controls in three ways: 1. Preventive. To ensure that systems work in the first place and problems are stopped before they affect the business. This could include control concepts such as good human resource management strategies, security arrangements, a code of conduct for staff and associates, segregation of duties and having a good all-round control framework in place. 2. Detective. These controls are designed to pick up problems, errors, breaches and all other risks that have not been prevented. Arrangements such as good supervision, checking work outputs, exceptions reports and reconciliations can all help here. 3. Corrective. There needs to be a process in place that ensures problems, when detected, can be resolved and internal investigations fit nicely into this category. Some of the more well-known control concepts are noted below: • Authorisation. Delegated powers should be clearly understood across all management grades and authorisation used to deal with transactions and decisions that require the intervention of a more senior person. In fact, clear role definition and clear lines of authority are important to ensure there is both real accountability and good performance management. • Security. Sound automated security over information and physical security over people, buildings, offices and records should ensure that organisational assets are properly protected. • Procedures. All corporate processes should be covered by suitable procedures that are understood and applied by employees. Procedures should cover financial regulations covering all income, expenditure, asset accounting, expense claims, budgeting, banking, contracts and related matters. Sound systems development standards are required to ensure new systems have a good chance of being successfully developed and installed. Corporate procedures should also address recruitment, attendance, training and other staffing issues. They should provide guidance on performance management, purchasing practices and the personal conduct of employees. Operational procedures that address each of the specific business processes across the organisation should also be firmly in place. • Supervision. Management need to keep an eye on their staff to ensure they are adhering to procedures, and also provide help and support where required. This control concept is associated with good communications and good staff morale.

130

Internal Investigations

• Separation of duties. Here we ensure that no one person can process a transaction from start to finish without an intervention from at least one other person. This control aims to promote the accuracy of the transaction and ensure that fraud does not occur. Some companies force staff to take holidays so that their work area is exposed to other employees. • Transaction trails. Logs that locate all transactions to a defined person are another useful way of ensuring any problems can be related to their source and that people know their actions can be traced back to them. If the investigator feels that any of the above control concepts has been infringed or is not properly in place, there is a good opportunity to make recommendations to address any such shortcomings.

6.8 RISK MANAGEMENT We have set out many ways to make the investigator’s report as attractive and meaningful as possible to promote corporate accountability. In reality, most large organisations suffer from information overload and there will be dozens of reports issued every week within a typical organisation, with each one containing advice, recommendations and action points – all claiming to be important. The investigator’s report into matters that occurred several months ago will need to compete with these new strategies, business plans, audit reports, advice notes, weekly briefing action points and the vast array of other published material. Moreover, the many hundreds of e-mails and various attachments all call for some kind of response, even if it is just to read and delete the offending document. Our Basic approach uses the straight logic of structured work and the resulting Fieldwork Summary to make sure the findings are aligned to the terms of reference and result in sensible conclusions and workable recommendations. Unfortunately, this logical approach may not be enough to ensure that busy managers take note and act in response to the report. Many investigations fail because those same busy managers just do not have time to deal with a tricky situation that, if ignored, may simply disappear. Many investigations involve delays and a lack of effective decision-making that, in the end, serve to compound the original problem – particularly where respective management and human resource roles are blurred and a complaint is left to sit on file, despite being fully investigated. We have included this extra section in the book in recognition of the difficulty of getting people to act promptly and effectively in matters that fall outside the daily routine of the business. This is where the risk management concept comes to our rescue. It is possible to place the investigation inside the overall risk management process to give power and credence to the matters that are being investigated and to the actions that are required as a result of

Communicating results

131

the investigation. The risk management approach will work if the following five elements are in place: 1. There is an effective risk management process in place in the organisation. 2. Managers at all levels understand their risks and seek to mitigate them in line with an appreciation of acceptability – or what many refer to as the appropriate risk appetite. 3. Senior management has in place an assurance process that enables it to judge whether the risk management process applied by the line management team is effective. 4. The exposure to risk is appreciated by management and supervisors who are constantly looking for sources of new risk and changes to the profile of existing risks. 5. All reports that make reference to new risks or risks that are not adequately guarded against are considered by local management in terms of their possible impact on the risk management process. If the above elements are in place then the investigator may adopt the following strategy: • Issues. The issues that are being investigated become possible new risks that have not been adequately addressed. • Mitigation. The investigation will assess why these risks were not being properly managed by management. • Better risk management. The conclusions and recommendations will consider suitable controls that can be applied in future as part of a more effective risk management process. The above approach can be quite powerful as it means the investigation report is not seen as a set of random suggestions to tackle a very specific set of circumstances. The report may be seen as an important input into the ongoing search for new risks and sound risk management practices. For example, an investigation into the way a nurse used the wrong medicine to treat a patient, to determine whether the act should be treated as a disciplinary offence, may be seen in its wider context as a review of the way medicines are being labelled and applied and the way this task is supervised. The investigator will need to examine the evidence surrounding the incident, but may also consider whether the risk of misapplied medicines is being properly understood and managed. We can return to the ICAC Approach we discussed earlier, which considered issues, causes, accountabilities and controls when designing recommendations. The controls aspect can be made broader to entail a consideration of the risk management process that should have been in place to address the issues that were investigated. Where we find a breach of

132

Internal Investigations

procedure, then again we can consider the impact of this breach on the wider risk management process – which will invariably depend on a good control culture that means people are acting in an acceptable manner. The investigator will need to employ appropriately themed language when using the risk management approach by using, for example, the following techniques: 1. Terminology. Use the term ‘risks’ to describe issues, claims, suppositions and allegations. Get used to talking about risk when dealing with the problems that are being investigated and the term ‘new risks’ for non-routine matters that have come as a surprise to the management team. 2. Risk registers. Try to understand the risk management process in place in the area where the problem lies. If there are risk registers or risk reporting tools in use, obtain a copy and try to find out where the sort of problems that are being investigated are recorded in these reports. 3. Control perspective. Talk about problem resolution in terms of controls and risk mitigation strategies. Try to relate the problems to control themes such as failings in culture, communications, ethics and integrity, staff training, data integrity, security routines, performance reviews, supervision, quality assurance regimes and so on. In this way we can work out which types of controls are needed to stop the problem arising in the first place. 4. Risk profiles. Encourage the manager to place the problem inside the existing risk profiles in terms of its potential impact on the business. If the problem is serious enough to be investigated, it is serious enough to be seen as a significant risk along with other more usual business risks. 5. Team-working. Think about the use of a workshop approach to consider the implications of the investigator’s draft report and whether the local management team can be asked to get together and consider possible control improvements to guard against the unmitigated risks that have been uncovered by the investigation. 6. Significance. Try to place a value on the risks that have been uncovered by the investigation using local language guides. For example, managers may rate risks as critical, high, medium or low in terms of their potential impact on the business. In this case we will want to rate the issues that were investigated as an important risk (high level?) and rate the eventual recommendations in terms of their importance in addressing critical, high, medium or low levels of risk. Many investigations result in a management rethinking process – where what was seen as a low risk (for example, sexual harassment or unfair promotion practices) is reclassified as a much higher risk when the implications of not managing the issue are made clear in the investigator’s report. The risk management approach can move management from viewing the issues that were investigated as a ‘non-routine hiccup – just one of those

Communicating results

133

unavoidable things’ to a more useful response of ‘how does this new predicament fit into our current risk agenda?’ This shift in perception can make the investigator’s job much easier in finding allies and promoting effective change, rather than the old-fashioned approach of preparing an investigation report that embarrasses line management and encourages buckpassing. Remember, the risk management approach can only be used where there is some type of risk management process in place as it may well be beyond the remit of the investigator to try to set one up as a result of a oneoff investigation. This final point is somewhat ironic, since many problems that lead to an investigation arise because there is no real risk management process in place.

6.9 EXPLORING EXAMPLE 10 We can explore Example 10 in further detail to examine how the fifth and final Basic stage can be applied. Example 10. You have been asked to investigate complaints from several local offices that the risk registers they have been told to compile are seen as a waste of time. Ascertain the issues

Substantiate the claims

Investigate the implications

1. There is dissatisfaction from some local offices regarding the need to submit risk registers (RRs) to head office each month. 2. The current risk registers are failing to ensure risk is managed to an acceptable level.

All but one of the local offices is experiencing problems with compiling and using RRs.

There is a major problem involving local management dissatisfaction with using RRs. The RRs are not making a real impact on managing risk.

3. The corporate standard on preparing and using registers is in need of improvement. 4. Etc.

The current RRs do not reflect real risks to each office and fail to help management make good decisions. The current standard is sound but the training in using RRs is aimed at junior admin staff not the managers. etc.

The standard can be retained but the training needs to be refocused to aim it at local managers. etc.

We know that there is a problem with the way risk registers are perceived and applied by the local offices and we have compelling evidence of the general

134

Internal Investigations

dissatisfaction with the current arrangements. We can arrive at a position for our first claim that there is dissatisfaction with risk registers for column three of the Fieldwork Summary Schedule. An assessment of the actual registers in use confirms the second claim that the tool is not really helping local managers manage risks. The evidence regarding the corporate risk management standard and training is interesting, because it shows that there is good material in place but it is aimed at the wrong people. Training needs to be refocused to reach managers and get them to work out their risks and prepare their risk registers rather than ask a junior clerk to do it for them in isolation. The investigation uncovered fairly concrete evidence that raises many other questions, such as: 1. Why was training aimed at the wrong level of employees? 2. Why are local managers not asking to get involved in the risk management process? 3. Who is driving the risk management process and ensuring it works? 4. Why did it take an investigation to uncover the worrying situation? One approach is to use the conclusions from the investigation to drive forward positive change to make the organisation better. It is always a good idea to encourage people to solve their own problems rather than just set out a whole batch of ad-hoc recommendations. In this example, we may suggest a working party consisting of a group of local managers is set up to work out how best to implement the risk management process, so that it works for them. The key is to get the most value from all the hard work and solid evidence that has been compiled during the internal investigation. One possible version of the executive summary for Example 10 is set out in Figure 6.4. The full report may go into more detailed findings setting out information relating to items such as the grounds of the original complaint, the content of the risk register procedure and training programmes, different views expressed by different local offices and precise problems with the way the registers are currently being prepared. An executive summary that can be placed on one sheet of paper will normally be better received than a longer and more involved document.

6.10 TO CLOSE To close this chapter we should note that we are coming to the end of the Basic standard on investigations discussed in this book. Communicating is the final stage where we set out the results of the investigation and help to move the organisation forwards. Reporting is not as easy as using a set template and copying in detailed information for publication. Reporting is a

Communicating results

135

Executive Summary Investigation into Reliability of Local Risk Registers Confidential Final Report 20 August 20xx Terms of Reference Investigation into complaints made by two local managers regarding the poor value received from the use of local office risk registers covering: 1. The current level of dissatisfaction. 2. The extent to which risk registers are helping manage risk. 3. The adequacy of corporate standards and the applied implementation strategy. Methodology The investigation was carried out by A and sponsored by B in line with the Basic Investigations Standard, and involved: • Interviews with managers and staff at three local offices. • Questionnaire surveys of all local offices (see appendix A). • Assessment of the corporate risk register procedures and training arrangements. Findings The investigation found that: 1. All but one local office manager expressed dissatisfaction with the risk registers and the lack of value obtained from their use. 2. The risk registers prepared by most local offices did not accurately reflect the real risks facing the office. 3. The risk register procedure was well written but the training to implement the procedure was inappropriately aimed at junior staff. We conclude that the current use of risk registers does not give sufficient value to local offices and provides potentially misleading information for head office. Recommendations The Risk Officer post is currently vacant although there is an intention to fill this post over the next few months. The assistant Risk Officer carries out risk register training. We have two main recommendations to promote the use of effective risk management at local offices: 1. The risk register training programme is immediately re-directed to focus on training local officer managers. 2. As soon as the Risk Officer post is filled, a working party consisting of a selection of local managers and the Risk Officer is established to assess ways that the use of risk registers can be improved in managing risk at a local level. We would like to thank managers and staff at the local offices for their assistance in this investigation.

Figure 6.4 Executive summary for Example 10.

component of communicating, and it is the ability to communicate effectively within the culture of the organisation and local business units which can turn a backwards-looking investigation into a dynamic tool for helping an organisation perform and be accountable for its actions. The importance of effective

136

Internal Investigations

communication is found in our sixth Basic Principle, which is repeated below as follows:

BASIC PRINCIPLE SIX The results of an internal investigation should be effectively communicated to the sponsor and other authorised parties in a professional manner that conveys a formal opinion along with any recommendations that result from the work carried out.

BASIC GUIDANCE When preparing and presenting the results of the investigation you should consider the following 10-point guidance: 6.1. All reports issued by the investigator should contain sufficient relevant information to be of use to the authorised reader. 6.2. All reports issued by the investigator should be concise in that they only contain the information that is required to fulfil the aims of the report. 6.3. The investigator should consider and discuss with the sponsor the range of different types of investigation reports and agree how the fieldwork should be best communicated to authorised persons. 6.4. Reports issued by the investigator should be derived from the Fieldwork Summary and contain the terms of reference for the investigation, methodology, special factors, findings and conclusions, along with any recommendations that may be appropriate. 6.5. Wherever possible, all factual findings should be shown to appropriate parties to comment on the facts and to obtain feedback on any errors, omissions, mitigating factors or explanations before these facts are entered into a final report. 6.6. The final investigations report should contain the investigator’s opinion on the extent to which the suppositions in question are likely to be true and whether any specific claims are upheld or not. 6.7. The investigator should provide suitable recommendations based on the audit findings. 6.8. Where the management for the areas most affected by the investigation have a formal risk management process in place, the issues under investigation should be related to the way risk is managed. 6.9. All investigation reports should be marked confidential and released only to authorised persons who should be advised to maintain the report’s confidentiality.

Communicating results

137

6.10. All aspects of the investigation should be managed by a quality assurance process which ensures the resulting reports are accurate, balanced and completely discharge the terms of reference of the investigation. Note that Chapter 7 contains several checklists to support the abovementioned guidance. We have finished the fieldwork and reported the results of the investigation. Hopefully we have shown how the Basic approach or a similar standard can be used to ensure the credibility of the investigator’s work. One further stage is required to underpin this credibility, which depends on a robust framework for verifying that the investigation has been performed to quality standards. The next chapter deals with the quality assurance framework that seeks to verify and reinforce the use of the Basic approach when carrying out an internal investigation.

7 Quality assurance

The Basic approach does exactly what it says. It provides a basic way of performing internal investigations that ensures some degree of professionalism. A good investigator armed with a simple set of standards will naturally perform good work, but there will always be some sceptics who will argue a cover-up. The question that we address in this chapter is, ‘who investigates the investigator?’ The answer is found in the many techniques that are applied to make sure the investigation is as good as it possibly can be. In this chapter, we mention the review role of the sponsor, and how good documentation can be used to support the structured approach that we need. The main material consists of a series of checklists and standardised documents to complement the Basic guidance that has been noted in previous chapters. Unlike other chapters, there is no principle covering quality assurance in this chapter. We have already noted in Basic Guidance note 6.10 from Chapter 6 that a suitable quality assurance process is required to help verify and support the correct use of Basic standards.

7.1 WHY QUALITY ASSURANCE? Quality assurance (QA) comes into our template as a separate component. In Chapter 1, we outlined the problems that arise when there is no attempt to investigate the typical accusations, claims and allegations that abound in most large organisations. A simple misunderstanding can get compounded into a major concern if there is no agreed way of clearing the air. If there is a way of examining a worrying assertion, there will still be problems if the investigation is not done properly, or is not seen to be done properly. QA is part of our Basic standards, which are aimed at making sure we can both conduct good investigations and clearly demonstrate that we have done so, as suggested in Figure 7.1.

7.2 ENSURING CONSISTENCY Investigations can be consistently poor or consistently good. We aim to achieve an acceptable level of professionalism by making sure there are adequate:

140

Internal Investigations Corporate Accountability

RESULTS

TOR

BASIC STAGES: INITIALPLAN PLAN INITIAL TOR: TOR: Diary of the Investigation DATE ITEM

Begin Investigation

DATE

TASK

Sign-Off FIELDWORK – SUMMARY SCHEDULE TOR: ISSUES

EVIDENCE

IMPLICATIONS

Evidence Schedule Issue: Aim Technique Results

Ascertain Issues Substantiate Claims Infer Implications

Quality Assurance

REPORT DRAFT/FINAL TOR

Communicate

FINDINGS

Results

Timeline of Events DATE EVENT

Risk Management Impacts

RESULTS

TOR

Figure 7.1 The position of quality assurance in the Basic template.

• Standards. There should be in place a set of standards, principles and supporting guidance that covers the way internal investigations are conducted. The Basic approach is one such set of principles and guidance that may be considered. • Training. All those who have a key role in internal investigations should receive an appropriate level of training, ranging from simply being aware of the standards, to having a good understanding of the standards, through to being able to apply the requirements of the standards when performing an actual investigation. • Sponsor review. The sponsor should review the work carried out by the investigator to ensure that it meets the requirements of the standards and that the resulting reports provide a fair and reliable account of the investigation. • Periodic reviews. Finally, the standards and the way they are used by appointed internal investigators should be subject to periodic reviews by the organisation’s internal auditors as part of the annual programme of planned audits.

Quality assurance

141

If the above four factors are fully in place, we are well on the way to having a good QA system in place. Sound guidance, checklists and user-friendly documentation can be used to give the investigator a good chance of applying structure and direction to planning, performing and presenting the results of an investigation.

7.3 ESTABLISHING A BASIC APPROACH The first two Basic Principles relate to the wider context of establishing a sound basis for carrying out professional internal investigations. Before we can discuss the way we might conduct a specific investigation, we need to ensure there is a firm platform of standards, expertise and clear role definition in place – and this is where the first and second Basic Principles come into play. Principle one addresses the need to set up a suitable standard.

BASIC PRINCIPLE ONE The board should prepare and implement a corporate standard covering the way internal investigations will be conducted within the organisation. Basic Guidance

Checklist of Tasks to Consider

1.1 Assess the way that existing internal investigations are carried out and determine whether this is the most effective way of dealing with non-routine problems that need to be examined in some detail.

1.1.1 Find out if there is an up-to-date, documented standard for conducting internal investigations. 1.1.2 Examine the last five internal investigations and determine whether these were conducted in line with an effectively structured approach. 1.1.3 Assess whether the last two investigations achieved their objectives to the satisfaction of key stakeholders.

1.2 Assess trends in terms of complaints, grievances, civil actions, reports of improper work practices and other issues that affect the organisation or similar organisations in the relevant sector.

1.2.1 Determine the number of complaints from external parties that have been received over the last few years and whether there is an upwards trend. 1.2.2 Determine the number of staff grievances that have been acted on over the last few years and whether there is an upwards trend.

142

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 1.2.3 Determine the number of disciplinary cases that have been dealt with over the last few years and whether there is an upwards trend. 1.2.4 Assess any external sources of information that provide information on trends in complaints, grievances and disciplinary cases in the industry and compare them with internal records.

1.3 Emphasise the importance of ensuring a capacity to undertake internal investigations by redefining the management role to include undertaking investigations in relevant areas of responsibility and also assisting, when required, in investigations initiated in other parts of the organisation.

1.3.1 Obtain and examine job descriptions of management grades and ascertain whether there is an acknowledgement that the post holder may be asked to perform internal investigations. 1.3.2 Establish, through questionnaires, whether any non-specialist employees have any expertise in performing internal investigations. 1.3.3 Secure a perspective from employees and employee representatives that any measures to involve managers in conducting internal investigations will not produce any resistance or unforeseeable problems. 1.3.4 Prepare additional entries to relevant job descriptions for management grades indicating that the post holder may be asked to perform internal investigations.

1.4 Develop and publish a suitable standard on internal investigations and locate suitable guidance on the intranet and train a pool of managers in using the Basic standard.

1.4.1 Identify a suitable board member who will direct and drive the investigations policy. 1.4.2 Establish a central point to coordinate the activity from sources of complaints and allegations for investigation and also coordinate data and all reports relating to internal investigations.

Quality assurance

143

1.4.3 Identify specialist stakeholders, such as internal auditors, human resource personnel, security officers and regulators, who have a major interest in the way internal investigations are conducted. 1.4.4 Discuss with these key stakeholders their expectations from any approach to investigations that is adopted for use in the organisation. 1.4.5 Determine how the investigations policy can be aligned to the achievement of corporate objectives and enhancing the corporate reputation. 1.4.6 Consider the approach used in the Basic standard and any aspects that may be useful in developing an approach for use in the organisation. 1.4.7 Consider any existing standards covering specialist fraud investigations, health and safety investigations and assess any aspects that can be applied to non-specialist investigations. 1.4.8 Consider the way an investigations standard can address the need to maintain good staff morale and support values of fairness, accountability, transparency and high levels of integrity. 1.4.9 Develop a corporate standard on internal investigations for use by non-specialists in the organisation. 1.4.10 Circulate the suggested standard for feedback from appropriate service heads from human resources, internal audit, legal and others to ensure it represents a professional approach. 1.4.11 Develop a suitable template based around an adapted version of the template used in the Basic standard. 1.4.12 Prepare a final document that represents the standard for internal investigations. 1.4.13 Develop a simplified version of the standard for general publication across the organisation.

144

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 1.4.13 Develop a simplified version of the standard for general publication across the organisation. 1.4.14 Publish the standard on the intranet along with guidance in the form of user-friendly question and answer notes. 1.4.15 Check for feedback on the published standard and respond to aspects that need to be improved, simplified or explained further. 1.4.16 Seek authorisation for a suitable budget to implement the new investigations policy. 1.4.17 Determine the type and number of managers and senior employees who may need to be involved in internal investigations. 1.4.18 Ensure that the investigator’s role is defined in a way that does not undermine the line management role. 1.4.19 Consider the skills needed to implement an approach to internal investigations and the extent to which these skills can be developed to an acceptable standard. 1.4.20 Assess the current level of skills and expertise that exist in the pool of people identified in 1.4.17 for the training programme. 1.4.21 Develop a training strategy to cover the gap in identified skills for the pool of managers and the types of skills that are required to implement the investigations standard. 1.4.22 Identify a training resource (and budget) that is able to deliver the required training through presentations, skills workshops and one-to-one sessions. 1.4.23 Develop a short training resource for newly recruited managers for use in their induction process. 1.4.24 Prepare a suite of assignments and quizzes that can be used by employees to check their understanding of the internal investigations standard.

Quality assurance

145

1.4.25 Implement the required training and assess the impact through feedback surveys and any monitoring of the way training is being delivered. 1.5 Monitor the way internal investigations are conducted and seek ways of improving the efficiency and effectiveness of these investigations.

1.5.1 Review the way newly trained managers are performing their investigations. 1.5.2 Consider the need to improve the performance in 1.5.1 above and whether any strategies, such as personal coaching, may be applied in this respect and implement any required changes. 1.5.3 Place on-line awareness presentations onto the intranet to provide a general awareness of internal investigations across the organisation. 1.5.4 Consider the effectiveness of the investigations policy and any ways that it may be improved in response to the way investigations are being conducted.

Principle two suggests that our standard is integrated into the organisation in a way that makes sense and works.

BASIC PRINCIPLE TWO Internal investigations should be based on natural justice and should take on board all relevant polices and procedures in promoting corporate accountability. Basic Guidance

Checklist of Tasks to Consider

2.1 Identify the principles of natural justice and make sure these will be met, and be seen to be met, when setting out the overall aims of an investigation.

2.1.1 Determine the extent to which staff are encouraged to make representations regarding any major concerns that they are experiencing. 2.1.2 Determine the extent to which staff concerns are being dealt with in a fair and balanced manner across the organisation.

146

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 2.1.3 Determine the extent to which employees are able to respond to any accusations made against them. 2.1.4 Determine the extent to which employees are able to appeal against major decisions made that have an adverse effect on their position in the organisation. 2.1.5 Consider who is best placed to make representations regarding the progress of internal investigations when there is a need to provide information to external parties. 2.1.6 Ensure that the internal investigations standard makes clear that any publicity regarding the nature and progress of the investigation is provided by the appropriate authorised officer. 2.1.7 Ensure there is a formal policy on confidentiality that protects both the interests of the organisation and the rights of people affected by the investigation. 2.1.8 Ensure that all parties involved in an investigation understand confidentiality rules, which means any publicity regarding the nature and progress of the investigation is provided by the appropriate authorised officer. 2.1.9 Ensure that no further information is released regarding a non-routine problem until such time as a short fact-finding exercise has been undertaken and the investigation plan is prepared.

2.2 Ensure that the complaints and whistleblowing procedures are being properly applied, and

2.2.1 Examine the complaints procedure and assess whether this is a user-friendly way of obtaining information from external parties that meets regulators’ requirements and best practice standards.

Quality assurance

147

there are facilities to meet with the complainant, wherever possible, to obtain a good understanding of the issues.

2.2.2 Examine the whistleblowing procedure and assess whether this is a user-friendly way of obtaining information from internal and external parties that meets regulators’ requirements and best practice standards. 2.2.3 Ensure that all allegations arising from the complaints or whistleblowing facilities are logged and result in a meeting, wherever possible, with the person making the allegation. 2.2.4 Ensure that the complaints procedure emphasises the early resolution of the complaint at a local level without the need for an internal investigation. 2.2.5 Consider the use of staff surveys regarding the extent of bullying, waste and inappropriate behaviour that has not been reported.

2.3 Identify the staff disciplinary policy and ensure that it allows all staffing issues to be dealt with by the line manager if the investigation finds that the staff code of conduct has been breached. Ensure this policy is agreed with human resources personnel.

2.3.1 Examine the corporate staff disciplinary procedures and assess whether this represents a reliable facility for managing staff conduct that meets best practice standards published by respected authorities. 2.3.2 Assess the clarity of internal arrangements that ensure relevant matters of staff conduct are referred to the disciplinary procedure for investigation and resolution. 2.3.3 Consider the extent to which human resource officers are able to engage and provide advice to management on issues that require adherence to regulatory and legislative codes that affect employees and their employment rights. 2.3.4 Discuss the way disciplinary investigations are conducted with employee representatives and establish any concerns with the current arrangements.

148

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 2.3.5 Seek views from management teams on the nature of investigations in terms of their perceived impact on the future welfare of the organisation. 2.3.6 Consider the extent to which investigations provide a ‘lessons learnt’ theme in addressing organisational problems. 2.3.7 Consider the extent to which investigations can be used to turn problems into solutions and so improve business performance. 2.3.8 Ensure there are up-to-date corporate standards on financial regulations, information security, general security, delegations, contracts and procurement, and performance reporting and any breaches of these procedures are referred to the appropriate head of service. 2.3.9 Ensure there are up-to-date operational procedures for each business unit and that any breaches of these procedures are referred to the appropriate business unit manager. 2.3.10 Ensure that the internal investigations standard and training programmes clarify when referrals are made for issues that may suggest breach of corporate and operational procedures.

2.4 Identify the anti-fraud policy and ensure it allows issues that suggest serious irregularities to be referred to the Chief Internal Auditor.

2.4.1 Ensure there is an up-to-date corporate anti-fraud policy in place that makes clear which issues must be referred to the fraud investigation process. 2.4.2 Determine respective responsibilities for fraud investigation and contact points for any referral by management.

Quality assurance

149

2.4.3 Ensure that the internal investigations standard and training programmes clarify when referrals are made for issues that may suggest irregularity or abuse of resources. 2.4.4 Promote fraud awareness amongst staff through suitable seminar and/or on-line presentations that are readily accessible by all employees across the organisation. 2.5 Identify the health and safety policy and ensure that issues relating to serious breaches of safety arrangements will be referred to the relevant officer.

2.5.1 Ensure there is an up-to-date health and safety policy in place that makes clear which issues must be referred to this specialist investigation process. 2.5.2 Determine respective responsibilities for health and safety breaches and contact points for any referral by management, employees or third parties. 2.5.3 Ensure that the internal investigations standard and training programmes clarify when referrals are made for issues that may suggest significant breaches of the health and safety standards.

7.4 QUALITY ASSURANCE CHECKLISTS Professionalism resides in the approach, expertise and energy of the professional. Nothing can create a professional investigation from the work performed by an incompetent investigator. Guidance notes, complicated models, templates, words of advice and entire books on carrying out investigations are only of use when they help the investigator make sound decisions and complete a good job. We have developed a series of Tasks for Consideration for each of the Basic guidance notes set out in Chapters 1–6. The investigator should exercise professional judgement when deciding which aspects of these checklists and associated standard documents to apply. The checklists are not mandatory and are not meant to act as a restraint on the judgement of the investigator – they merely act as an additional source of guidance that may be referred to as and when required. Investigation work should be kept as simple as possible; or, using our terminology, as Basic

150

Internal Investigations

as possible. The final row of each checklist contains a suggested control whereby the sponsor is required to sign off that the key principle in question has been complied with. The third Basic Principle relates to the initial plan for the investigation.

BASIC PRINCIPLE THREE All internal investigations should start with a fact-finding exercise, before suitable terms of reference and an initial plan are prepared and approved. Basic Guidance

Checklist of Tasks to Consider

3.1 All internal investigations should start with a brief fact-finding exercise that seeks to determine the nature of the problem and how best it should be tackled. This fact-finding stage should result in a consideration of any actions that should be taken immediately to protect the organisation from any unmitigated risks that have become apparent.

3.1.1 Conduct an initial interview with the person who initiated the allegation, whenever this is possible. 3.1.2 Examine any documentation provided by the person who initiated the allegation. 3.1.3 Determine whether any immediate action is required to address urgent issues, safeguard evidence and facilitate the due progress of the investigation (see the 10 key questions in Chapter 3, Section 3.3, ‘The quick fix’). 3.1.4 Isolate the main issues that will need to be investigated. 3.1.5 Build a clause into the investigation’s terms of reference relating to the search for suggested improvements to prevent similar problems in future. 3.1.6 Refer complex matters that require a specialist investigator to the appropriate internal or external team. 3.1.7 Consider the possibility that the person making any allegations has a grudge against someone or has an undeclared interest in establishing an investigation. 3.1.8 Decide whether or not the issues in question should be subject to a formal internal investigation. 3.1.9 Complete Document One.

Quality assurance

151

3.2 The results of the fact-finding exercise should lead to detailed terms of reference for the investigation that will define the issues to be addressed and the tasks that will be undertaken – which should be formally approved.

3.2.1 Prepare the terms of reference, scope and tasks sections in Document Two.

3.3 The terms of reference should take on board any sensitivities emerging from the issues that will be investigated that affect the way the work will be carried out and the importance of the resulting report.

3.3.1 Determine whether there are any sensitivities in respect of patterns of problems and scope for a scandal to emerge, which may result from the issues being investigated. 3.3.2 Describe any relevant information on sensitivities in Document Two. 3.3.3 Consider the scale of the investigation in terms of its potential importance, scope and level of resources required and consider using a classification to reflect the importance of the issues. Levels 1, 2 and 3 may be used to describe ‘large’, ‘medium’ and ‘small’ investigations. Include an appropriate score in Document Two. 3.3.4 Make sure the problem in question does not fall within those types of issues that are best addressed through the crisis management system.

3.4 A senior manager should be appointed sponsor to the investigation to ensure the work is completed to a professional standard, consistent with other corporate polices, and to formulate any executive decisions that result from the investigation.

3.4.1 Identify a sponsor for the investigation who should be senior enough to ensure there is sufficient support and direction for the investigator. 3.4.2 Make sure the sponsor has a key role in the executive management of the area in question or has a managing role for the corporate function that will be most affected by the investigation. 3.4.3 Authorise the sponsor to make executive decisions in respect of the investigation.

152

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 3.4.4 Clarify the sponsor’s role in making sure the investigation is carried out in a professional manner. 3.4.5 Ask the sponsor to consider the need to use a more junior staff member to carry out the review of the fieldwork files and budgets applied by the investigator if this extra resource would be appropriate. This person may also act as a ‘sounding board’ for the appointed investigator. 3.4.6 Ensure that the sponsor has a good understanding of the Basic approach to investigating and ensure that they work through an on-line presentation of the Basic material and the sponsor’s role. 3.4.7 Ensure that any corporate procedures that impact on the issues being investigated are assessed for their impact on the investigation. 3.4.8 Approach the service head for any corporate procedures identified in 3.4.7 to obtain advice on the proposed approach to the planned investigation.

3.5 A suitable representative should be assigned the task of providing, where appropriate, internal and public statements regarding the investigation and its progress.

3.5.1 Identify the party best placed to deal with information releases concerning the nature of the investigation and progress in completing the required work. 3.5.2 Determine which parties should receive a copy of the terms of reference, ongoing progress reports, draft and final reports of the investigation. 3.5.3 Make clear that no information should be published regarding the investigation unless agreed with the sponsor and the person identified in 3.5.1.

Quality assurance

153

3.6 The investigation should be assigned to a person with suitable skills, emotional maturity, sufficient status and no conflict of interests who is best placed to conduct a professional job.

3.6.1 Consider the possibility of assigning the investigation to a line manager for the area affected by the allegations/issues. 3.6.2 Consider the range of skills and experience required to complete the investigation. 3.6.3 Based on the nature of the issues in question, consider the need to assign the investigation to a designated in-house expert. 3.6.4 Based on the nature of the issues in question, consider the need to employ a specialist external investigator. 3.6.5 Approach a suitable person to conduct the investigation. 3.6.6 Ensure that the investigator has a good understanding of the Basic approach to investigating and that they attend suitable training in using this method. 3.6.7 Ascertain whether there are any conflicts of interest or special factors that might impair the investigation before formally appointing the internal investigator.

3.7 Budgets and resources should be assigned to the investigation to reflect the scale of the work involved and the possible use of specialists/experts, and these budgets should be monitored by the sponsor.

3.7.1 Develop an estimate of the time that may be required to complete the investigation and place this information in the budget section in Document Two. 3.7.2 Determine whether there are any expenses that will be needed to conduct the investigation and place this information in the budget section in Document Two. 3.7.3 Assess whether there will need to be any input from internal or external specialists and place any extra costs to the investigation in the budget section in Document Two.

154

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 3.7.4 Obtain authorisation from the sponsor for the investigation to proceed and secure a signature, or confirmation of approval, in Document Two.

3.8 The investigator should be given access rights to ensure all relevant evidence is secured, and all employees and associates should be required to cooperate with internal investigations.

3.8.1 Obtain from the sponsor a delegated authority for the investigator to access all information and explanations from employees, partners and associates relevant to the investigation. 3.8.2 Make clear in the authorisation that any employee or contractor who fails to cooperate with the investigation without reasonable justification should be reported to the sponsor for suitable interventions. 3.8.3 Consider any measures that may help employees accept that investigations may have to be conducted and that dealing with problems provides better accountability and transparency. 3.8.4 Talk to the data protection officer about any foreseeable problems regarding the use of personal data that may be required to complete the investigation.

3.9 Control devices based around monitoring of hours spent on various stages of the investigation and progress reports to the sponsor or monitoring panel should be used to promote the efficient use of resources.

3.9.1 Determine the extent of progress reports from the investigator to the sponsor and the arrangements for keeping in touch and reviewing developments. 3.9.2 Record hours spent on the investigation and compare the information with the budgeted hours (and costs) that have been approved by the sponsor. 3.9.3 Seek further approval from the sponsor where the hours (or costs) will exceed the approved allocation, setting out reasons for the additional time (and/or funding) that is required.

Quality assurance

155

3.9.4 Ensure that the investigation is carried out with due regard to the efficient and effective use of resources including time, expenses and the use of any advisors and assistants. 3.10 Investigations that will last more than a week should be risk assessed to deliver a suitable risk management strategy to improve the chances of a successfully concluded investigation.

3.10.1 For longer investigations prepare a risk management strategy in conjunction with the sponsor by completing Document Three. 3.10.2 Use the risk management strategy to help make decisions on the way the investigation is conducted and managed. 3.10.3 Update the risk management strategy each week to ensure it takes on board all relevant factors that impact the ability to deliver a professional investigation.

Sign-Off by Sponsor:

I am satisfied that the issues/allegations have been subject to a suitable fact-finding exercise which has resulted in appropriate action to respond to the matter and/or to establish an initial plan to investigate the matter further.

The fourth Basic Principle relates to the fieldwork stage of the investigation.

BASIC PRINCIPLE FOUR All internal investigations should involve assessing issues and gathering sufficient reliable evidence to substantiate the claims, so that the implications may be ascertained. Basic Guidance

Checklist of Tasks to Consider

4.1 Internal investigations should involve an objective attempt to secure evidence that impacts the issues defined in the terms

4.1.1 Consider the need to retain an objective view of the issues in question and assess the degree to which any parties implicated in the investigation may have a vested interest in the outcome.

156

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider

of reference, using a positive approach to addressing any identified problems and seeking improvements to current working practices, wherever possible.

4.1.2 Obtain a good understanding of the corporate policies and operational processes in place that may have an impact on the issues and claims being investigated. 4.1.3 Ensure that all parties to the investigation have an opportunity to make reasonable suggestions on ways to improve any known weaknesses.

4.2 A Fieldwork Summary Schedule should be completed to document issues under investigation, the evidence that was secured and the conclusions drawn from this evidence.

4.2.1 Ensure that there is a Fieldwork Summary document, as represented by Document Four, in use to reflect an overview of the results of the work that has been carried out.

4.3 The issues under investigation should be fully researched and understood, including the business context, any staff-related considerations and the relevant procedures involved.

4.3.1 Use the internet and corporate intranet to extract any reputable information that relates to the issues under investigation and obtain a good grasp of the background knowledge of these issues so as to help focus the fieldwork stage. 4.3.2 Obtain any reports issued by internal audit over the last year that impact on the issues, claims and general working practices that may need to be considered in the investigation. 4.3.3 Search the complaints and whistleblowing database for any cases that bear a similarity to the issues currently being investigated. 4.3.4 Consider any matters that have been addressed by human resources relating to general staffing issues or the conduct of individual employees that may impact on the investigation.

Quality assurance

157

4.3.5 Obtain a good understanding of the work roles and responsibilities (including job descriptions) of all those employees who have been implicated in the investigation. 4.3.6 Where the issues concern a business process, ensure that this process is isolated and documented in conjunction with other, related processes. 4.3.7 Consider the need to refine the terms of reference set out in the initial investigation plan as a result of efforts to clarify the issues under investigation. Any significant alterations to the terms of reference will need to be agreed with the sponsor. 4.3.8 Populate the ascertaining issues column of the Fieldwork Summary Schedule in Document Four. 4.4 A diary of the investigation should be maintained by the investigator that documents all incidents, key decisions, meetings, phone calls and other means of contact along with anything that provides a useful audit trail of the conduct of investigation.

4.4.1 Prepare a diary of the investigation using Document Five. 4.4.2 Populate the diary with any incidents or decisions that have a significant effect on the investigation and the way it is being conducted. 4.4.3 Ensure that the diary is kept confidential and only contains factual information and not general impressions or opinions.

4.5 All available sources of evidence should be considered when developing strategies for substantiating the relevant issues and claims, and expert advice obtained where the nature of the evidence involves a degree of complexity.

4.5.1 Consider all the available sources of evidence for their impact on the investigation. 4.5.2 Formulate a strategy for extracting evidence to support the investigation that minimises any inconvenience caused by the fieldwork stage and ensures the best use of the investigator’s time. 4.5.3 Where a large number of files or transactions have to be extracted for the

158

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider investigation, consider the possible use of sampling techniques. 4.5.4 Use internal or external specialists when faced with an issue that is too complex for the investigator to deal with alone. 4.5.5 Consider any automated data held on networks, PDAs, mobile phones, hard disks and portable storage devices where this data may be relevant to the investigation. 4.5.6 Where there is data held on a hard disk, rather than extract the data, consider the use of disk imaging to obtain a reliable copy. 4.5.7 Consider the possibility of errors in any data that has been extracted for the investigation.

4.6 All findings should be supported by the best available evidence that is relevant, reliable, sufficient and practical to ensure that the investigation arrives at justifiable conclusions.

4.6.1 Ensure that the evidence secured during the investigation is relevant in that it relates to the issues/claim under review in terms of proving or disproving a claim or clarifying the issues. 4.6.2 Ensure that sufficient evidence is secured such that it provides enough support to enable the investigator to form a final opinion on the issues under investigation. 4.6.3 Ensure that the evidence secured is reliable in that it reflects the best available evidence that has not been tainted by any vested interests or inaccuracies and has been corroborated wherever possible. 4.6.4 Explore any ambiguity in evidence that has been obtained and any inconsistencies with other sources of evidence to seek further clarification regarding the reliability of this evidence.

Quality assurance

159

4.6.5 Ensure that practical considerations have been assessed when gathering evidence so that the value from the evidence and impact on the investigation represents a worthwhile use of resources used to obtain the evidence. 4.6.6 Consider ways that any missing records that are required for the investigation may be obtained and report any gaps in the records to the appropriate manager to respond to. 4.6.7 Ensure that any conclusions derived from the evidence that has been gathered during the investigation are seen by stakeholders who would be affected by the investigation, as justifying the resulting conclusions. 4.6.8 Where the available evidence does not enable the investigator to form a clear opinion, make sure this fact is formally documented. 4.7 The evidence secured should be documented in Evidence Schedules that record the aim of the exercise, how the evidence was gathered and assessed and the conclusions – while the conclusions should also be noted in the Fieldwork Summary Schedule.

4.7.1 Use a clear aim for each exercise and assess the evidence gathered and document the results on separate Evidence Schedules using Document Six. 4.7.2 Summarise the results of the Evidence Schedules on the substantiating claims column of the Fieldwork Summary Schedule (Document Four). 4.7.3 Ensure all evidence that is secured can be traced back to its source and, where relevant, the system through which it was produced. 4.7.4 Store all secured evidence in a safe manner that preserves its integrity and ensures it is readily accessible by authorised personnel, but cannot be tampered with. The use of a register of evidence and suitable logical and physical security measures should be considered.

160

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 4.7.5 Consider the Data Protection Act and the need to protect all personal information gathered during the investigation from unauthorised processing, loss, damage or destruction. This includes any personal information held on the investigator’s laptop or storage devices.

4.8 All evidence secured during the investigation should be weighed up (using a suitable scale) and assigned a category that best reflects the degree of reliance that can be placed on the evidence before any resulting conclusions are drawn.

4.8.1 Review all evidence that has been gathered and ensure it is complete with no unexplained gaps. 4.8.2 Wherever possible, score each main source of evidence using a suitable scale; Document Seven may be used to assist this task. 4.8.3 Consider the implications of all relevant evidence that has been gathered during the investigation and provide a conclusion in the implications column of the Fieldwork Summary (Document Four).

4.9 The investigator should represent the best interests of the organisation and also protect the rights of all parties involved in the investigation by reporting, fully and without bias, all information that is relevant to fulfilling the terms of reference of the investigation.

4.9.1 Consider the impact of the Data Protection Act and the need to ensure compliance with the various provisions. 4.9.2 Consider the impact of the Human Rights Act and the need to ensure compliance with the various provisions. 4.9.3 Consider the impact of respective employment and personal injury at work legislation and the need to ensure compliance with the various provisions. 4.9.4 Consider the impact of the Regulation of Investigatory Powers Act covering the admissibility of communications data and the need to ensure compliance with the various provisions that involve informing employees about the interception policy and placing limits on its use.

Quality assurance

161

4.9.5 Bring to the attention of the sponsor any pressures experienced by the investigator that make it difficult to explore all relevant evidence and report the findings in a full and open manner. 4.10 The conclusions and recommendations provided by the investigator should take on board any need to instigate separate organisational measures, for example where breach of procedure is involved, depending on the nature of the findings.

4.10.1 Assess all evidence that is gathered for indications that a breach of procedure has occurred, which means the matter should be referred to a responsible party to be dealt with under a specific corporate procedure.

Sign-Off by Sponsor:

I am satisfied that the investigation has resulted in the examination of sufficient relevant evidence to enable reasonable conclusions to be drawn to satisfy the investigation’s adopted terms of reference.

The fifth Basic Principle relates to the use of interviewing in internal investigations.

BASIC PRINCIPLE FIVE Professionally planned and conducted interviews should be used throughout the investigation whenever it is possible to obtain relevant information from people who can assist the investigator. Basic Guidance

Checklist of Tasks to Consider

5.1 The importance of conducting professional interviews should be established in terms of ensuring the efficient completion of the investigation.

5.1.1 Ensure that the interview is relevant to the internal investigation that has been endorsed by the sponsor. 5.1.2 Assess whether the investigator’s skills and experience in interviewing are sufficiently developed to handle the interview in question.

162

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 5.1.3 Examine all correspondence that goes out to interviewees and ensure it reflects the view that an impartial and professional investigation is being conducted. 5.1.4 Clarify the aims of the interview to ensure there is scope to obtain a better understanding of the issues under review and any wider impact on the organisation.

5.2 Issues that relate to a widespread problem in an organisation may be addressed using an inquiry panel that interviews all those people who have information that will help identify and address the problems at hand.

5.2.1 Assess whether the issues in question may be addressed by a series of interviews across many parts of the organisation. 5.2.2 Discuss, where appropriate, the prospect of using the open panel format with the sponsor as an alternative or as a complementary aspect of the investigation.

5.3 Interviews should be used throughout the five stages of the Basic approach to gather information relevant to the investigation, although they will be more prevalent during the ascertaining and substantiating claims stages.

5.3.1 Ensure that the use of interviewing is considered during all parts of the investigation including fact finding, fieldwork and communicating the results. 5.3.2 Apply the interviewing technique whenever it is necessary to obtain information held by people who can assist the investigation. 5.3.3 Consider interviewing external third parties where this would assist the investigation.

5.4 All interviews should be properly prepared with due consideration given to notice, promptness, indicating issues, confidentiality, location, ensuring attendance, rules on being accompanied, recording and making

5.4.1 When preparing for an interview, give due consideration to the location and whether this will encourage open and robust communications between the two parties. Avoid using public places and social meeting places. 5.4.2 When preparing for an interview, give due consideration to the amount of information held by the interviewee with

Quality assurance

163

reasonable adjustments for the interview.

a view to encouraging open and robust communications between the two parties. 5.4.3 When preparing for an interview, give due consideration to the protocols on allowing the interviewee to be accompanied by a colleague or union representative. This facility is more likely to apply to disciplinary cases and cases where the interviewee has expressed some discomfort with the planned meeting. 5.4.4 Ensure that all interviews incorporate suitable facilities where, due to the interviewee’s circumstances (including disabilities), there is a need to provide reasonable adjustments.

5.5 All interviews should be properly structured having due consideration to making introductions, atmosphere setting, context setting, documentation, preparing questions and answers, giving summaries, seeking ideas for improvements, indicating next steps, allowing for final questions and formal closure.

5.5.1 Structure the interview to ensure there is an atmosphere conducive to good communications and some rapport. 5.5.2 Structure the interview to ensure there is an opportunity to obtain all the required information including suggestions for improvement where appropriate. 5.5.3 Structure the interview to ensure the interviewee is given useful information that enables them to understand the interview process and their role and responsibilities in providing information to the investigator. 5.5.4 Prepare a list of questions and issues to cover during the interview that does not mean the questions must be asked verbatim or in a way that creates an excessively rigid structure. 5.5.5 Ensure contact details are noted and make it clear that the interviewee may be asked to provide additional information if required. 5.5.6 Ensure there is a note made of the full name, sex, post, general duties, location, time in post, time employed and line manager’s name.

164

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 5.5.7 Consider whether it would be more appropriate, in terms of encouraging good engagement from the interviewee, to refer to the interview as a ‘meeting’. 5.5.8 Record the interview on Document Nine/Nine(A).

5.6 Suitable techniques and good interpersonal skills should be applied to communicating with the interviewee to ensure the best results from the interview.

5.6.1 Obtain sufficient background knowledge about the interviewee, including their correct job title and role, before conducting the interview. 5.6.2 Organise the interview and plan a range of different types of questions in a way that encourages good engagement from the interviewee. 5.6.3 Ensure that the actual ‘story’ is obtained from the interviewee where appropriate, by asking for information in chronological order and allowing sufficient time for reflection and recapping. 5.6.4 Ensure all inconsistencies and ambiguities are challenged with a view to obtaining reasonable explanations. 5.6.5 Maintain a dignity and politeness at all times when conducting an interview, along with an open mind as to the credibility of the interviewee unless there is clear evidence that this person is unreliable. 5.6.6 Ensure that a blatant lack of cooperation from an interviewee is reported to the sponsor for intervention by the appropriate line manager.

5.7 Any information arising from an internal investigation that suggests questionable behaviour by a specific individual

5.7.1 Compile any evidence that has been obtained during the interview and which reflects badly on the interviewee. 5.7.2 Be prepared to present the evidence to the interviewee and seek explanations

Quality assurance

165

should result in an interview of the person in question to ascertain whether there is any reasonable explanation.

if there are any reasonable explanations available. 5.7.3 Take on board any explanations offered by the interviewee concerning evidence discussed during an interview and probe the response if there are any inconsistencies. 5.7.4 Consider exploring any new leads that are provided by an interviewee during the interview. 5.7.5 Review all interview records and arrange to re-interview anyone who has provided incomplete information or facts that are inconsistent with other, later interviews and sources of information. 5.7.6 Ensure that interview records are cross-referenced to Evidence Schedules (see Document Six).

5.8 The interview should be stopped where the information given needs to be examined using a separate corporate procedure outside the remit of the internal investigation, and the case referred to the appropriate responsible person.

5.8.1 Be prepared to stop an interview and refer the matter to the appropriate officer where the issues should be addressed through a separate corporate policy. For example, disciplinary cases mean the employee has the right to be accompanied, and any interview that does not allow this right may be seen as unfair.

5.9 Witness statements should be used to record important statements that have been supplied by an interviewee.

5.9.1 Ensure there is a good understanding of the use and format of a witness statement – see Document Eight. 5.9.2 Assess the type of information that is likely to result from an interview and whether this information is best recorded in a witness statement. 5.9.3 Allow the interviewee to make the witness statement in their own words and ensure that they are able to carefully check the contents before signing the document.

166

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 5.9.4 Ensure that all witness statements refer to any documents and attachments as uniquely numbered exhibits that are filed with the statement. 5.9.5 Decide whether a copy of the witness statement may be given to the witness.

5.10 The interviewer should be aware of, and apply, the available strategies to counter some of the common difficulties that arise during some interviews.

5.10.1 Check the list of difficult aspects of interviewing in Chapter 5 and try to interpret the symptoms of such behaviour from an interviewee. 5.10.2 Employ the strategies for dealing with difficult people from Chapter 5 with a view to creating a better flow of information. 5.10.3 Consider the study of non-verbal communication in helping the interviewer to obtain reliable information. 5.10.4 Reflect on interviews that have been held and assess ways that they might have been improved – although do appreciate the view that not all interviews will go well all the time.

Sign-Off by Sponsor:

I am satisfied that professionally conducted interviews have been held with all those persons who can be expected to assist in the investigation.

The final Basic Principle relates to communicating the results of the investigation.

BASIC PRINCIPLE SIX The results of all internal investigations should be effectively communicated to the sponsor and other authorised parties in a professional manner that conveys a formal opinion along with any recommendations that result from the work carried out.

Quality assurance

167

Basic Guidance

Checklist of Tasks to Consider

6.1 All reports issued by the investigator should contain sufficient relevant information to be of use to the authorised reader.

6.1.1 Ensure that the report includes clear details of the issues, suppositions and claims that were investigated. 6.1.2 Ensure that the report includes summaries of evidence obtained to support – or otherwise – the issues, suppositions and claims that were investigated. 6.1.3 Ensure that the report includes a conclusion on the implications of the evidence and that this is referred back to the original terms of reference for the investigation. 6.1.4 Ensure that the report includes any relevant recommendations for improving aspects of the business that were found to be weak as a result of the investigation. 6.1.5 Consider the way the investigation is framed so as to provide a context and understanding of how the issues fit into any wider priorities. 6.1.6 Consider whether the information presented in the report is easy to read and understand, to ensure the effective communication of the results of the investigation.

6.2 All reports issued by the investigator should be concise in that they only contain the information that is required to fulfil the aims of the report.

6.2.1 Reassess the terms of reference for the investigation and the type of information that is required to complete the investigation. 6.2.2 Examine the evidence and findings from the investigation and measure them against the assessment carried out in 6.2.1 above. 6.2.3 Consider whether there is undue reliance on circumstantial evidence that can provide only a basis for drawing a possible inference rather than a firm opinion.

168

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 6.2.4 Ensure that there is enough relevant evidence presented in the report to support the issues, suppositions and claims and remove any material that is not required to deliver a final opinion. 6.2.5 Re-check the report to ensure it does not contain any unnecessary background information or repetition of findings to ensure it is as concise as possible. 6.2.6 Consider preparing a concise one-page Executive Summary of any report that is issued. Document Ten may assist this task.

6.3 The investigator should consider and discuss with the sponsor the range of different types of investigation reports and agree how the fieldwork should be best communicated to authorised persons.

6.3.1 Discuss and agree with the sponsor the extent to which interim reports will be required to monitor progress of the investigation. 6.3.2 Discuss and agree with the sponsor the extent to which verbal updates will be required to monitor progress of the investigation. 6.3.3 Discuss and agree with the sponsor the extent to which draft reports will be issued to check the accuracy of facts quoted in the report. 6.3.4 Discuss and agree with the sponsor the extent to which an executive summary will be given to authorised persons as opposed to the full report. 6.3.5 Discuss and agree with the sponsor the possible use of formal presentations to people authorised to receive the results of the investigation.

6.4 Reports issued by the investigator should be derived from the Fieldwork Summary and contain the terms of

6.4.1 Consider setting a suitable target for the release of the draft report that suggests it is prepared within, say, five working days after the fieldwork has been completed.

Quality assurance

reference for the investigation, methodology, special factors, findings and conclusions along with any recommendations that may be appropriate.

169

6.4.2 Reassess the Fieldwork Summary for completeness and the extent to which it communicates the results of the investigation. 6.4.3 Check the terms of reference, findings, conclusions and recommendations in the draft report and ensure that they reconcile with the material in the fieldwork so that the two documents are entirely synchronised. Repeat this exercise each time the draft report is revised in response to feedback from authorised readers. 6.4.4 Ensure that the methodology adopted for the investigation is noted and make clear that this is based on a professional approach to performing defensible and impartial work. 6.4.5 Ensure that any special factors outlined in the report coincide with the background notes obtained during the investigation. 6.4.6 Re-examine the recommendations in the draft report and ensure they are derived from the findings and discovery of weaknesses that are set out in the Fieldwork Summary. 6.4.7 Ensure any recommendations that are made based on representations from people interviewed during the audit are made with a footnote as to this origin along with an appropriate acknowledgement. 6.4.8 Consider providing the Timeline of Events (see Document Eleven), a list of people interviewed and a list of documents examined as appendices to the investigations report.

170

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider

6.5 Wherever possible, all factual findings should be shown to appropriate parties to comment on the facts and to obtain feedback on any errors, omissions, mitigating factors or explanations before these facts are entered into a final report.

6.5.1 Review any key facts stated in the report and cross-check them with supporting information taken from documentation and interview records. Where significant facts derive from a single source, note their origins in the report. 6.5.2 Obtain a list of all persons who may be able to confirm important facts quoted in the report and consider the need to send out a draft report to ensure these facts are agreed by the party in question.

6.6 The final investigation report should contain the investigator’s opinion on the extent to which the suppositions in question are likely to be true and whether any specific claims are upheld or not.

6.6.1 Ensure that there is a clear opinion from the investigator which is expressed in the report regarding the extent to which issues, suppositions and/or claims are supported by reliable evidence and are therefore likely to be true or upheld. 6.6.2 Ensure that this opinion is made for each item in the terms of reference of the investigation. 6.6.3 Express clearly in the report a situation where there is insufficient evidence to form an opinion. 6.6.4 When forming an opinion on significant issues, refer to any significant counter-arguments that have been disregarded and explain why. 6.6.5 Consider whether specific findings should result in a note in the report regarding the possible wider implications of the identified problems for other parts of the business. 6.6.6 Do not provide a record of the investigation on the personal files of anyone implicated in the investigation without agreeing this action with the Head of Human Resources.

Quality assurance

6.7 The investigator should provide suitable recommendations based on the audit findings.

171

6.7.1 Ensure that suitable recommendations address any failings in personal accountability and indicate whether any further action should be considered against specific persons. 6.7.2 Where the investigator recommends an apology to an employee or third party, this should be accompanied by a statement that the apology should not be taken as an admission of guilt. 6.7.3 Where appropriate, provide advice on dealing with weaknesses in control after having discussed the suggested action with those parties responsible for implementing the recommendations. 6.7.4 Consider the need to improve operational procedures to make them more effective. 6.7.5 Consider the need to improve ethics and integrity in management, staff and specific work teams. 6.7.6 Consider the need to improve working relationships within management, staff and specific work teams. 6.7.7 Consider the need to provide staff training to promote the better use of operational procedures. 6.7.8 Consider the possibility of adopting suitable staff development tools such as counselling and conciliation to improve personal effectiveness and/or working relationships. 6.7.9 Ensure there is good consultation (and participation) on any major changes arising from recommendations to address weaknesses with a view to gaining cooperation from staff rather than confrontation. 6.7.10 Consider the need to ask internal audit to carry out a review of the area involved in the investigation where significant weaknesses in control have been identified by the investigation.

172

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider 6.7.11 A suitable tracker system should be designed to allow the sponsor to determine which recommendations have been implemented and by whom. 6.7.12 The sponsor should follow up the recommendations issued by the investigator and ensure they have been fully implemented – unless there is a reasonable explanation for any failure to implement the recommendations.

6.8 Where the management for the areas most affected by the investigation have a formal risk management process in place, the issues under investigation should be related to the way risk is managed.

6.8.1 Assess the extent to which a formal risk management process is applied to the areas most affected by the investigation. 6.8.2 If such a process is in place, relate the weaknesses identified in the investigation to failings in the risk management process. 6.8.3 Consider suitable recommendations for improving risk management by a better understanding of the risks, and required controls, and the need to ensure controls that are already in place are properly observed. 6.8.4 Consider the extent to which the problem under investigation impacts on the risk appetite that has been established for the relevant business area. 6.8.5 Consider becoming involved in management team discussions of risk mitigation that could benefit from the findings of the investigation – in terms of considering any unmitigated risks that should be addressed through future management strategies.

6.9 All investigation reports should be marked confidential and released only to authorised persons

6.9.1 Discuss the report circulation protocols agreed with the sponsor at the start of the investigation and ensure that no changes are required to this list.

Quality assurance

173

who should be advised to maintain the report’s confidentiality.

6.9.2 Ensure that the senior director for the area affected by the investigation is given draft copies of the report before it is finalised. 6.9.3 Place a confidentiality marker on the report and advise readers not to divulge the contents. 6.9.4 Consider giving specific individuals a code name such as A, B or C to avoid using their actual names in copies of sensitive reports which may become widely circulated. Restrict the key for the coded names used to as small a number of authorised persons as possible.

6.10 All aspects of the investigation should be managed by a quality assurance process which ensures the resulting reports are accurate, balanced and completely discharge the terms of reference of the investigation.

6.10.1 Design a quality assurance process based on Chapter 7 of the book which includes set standards, training, the sponsor’s review role, checklists and the use of standardised documentation. 6.10.2 Consider preparing a glossary of the various terms and concepts relating to the adopted standard for internal investigations. 6.10.3 Prepare a formal General File Note for any information that cannot be recorded in other standard documentations. See Document Twelve. 6.10.4 Review the draft report and consider whether it is fair and balanced in the way findings are presented. 6.10.5 Review the draft report and consider whether it is fully supported by the investigations file, particularly relating to factual accuracy and the representation of underpinning evidence. 6.10.6 Ensure that all findings, conclusions and recommendations are documented in the Fieldwork Summary Schedule, which itself should contain cross-references to the respective paragraphs in the investigations report. Each time the draft report is altered,

174

Internal Investigations

(Continued) Basic Guidance

Checklist of Tasks to Consider the Fieldwork Summary Schedule cross-references should by altered likewise. 6.10.7 Review the draft report and consider whether it fulfils the terms of reference set for the investigation. 6.10.8 Include a general note of thanks for all those who provided assistance to the investigator.

Sign-Off by Sponsor:

I am satisfied that the results of the investigation have been fully and accurately reported to all those persons who are authorised to receive appropriate reports.

7.5 STANDARDISED DOCUMENTATION Quality is about doing things consistently well. Consistency is promoted by using standards; that is, standardised approaches and standardised documentation. We have designed 12 simple documents to help the investigator produce a worthwhile product, and each document is referred to in the various checklists set out above. An investigation is not about filling in the right forms. It is about accomplishing the set aims of the investigation through a professional approach. Standardised documents, as with the checklists, are simply used to support the investigator’s work and provide guidance where required. We set out below the 12 standard documents as illustrations. These documents may be set up as templates to form a documentation resource to accompany the Basic principles, Basic guidance and the various checklists found in the book. Document One: Fact-Finding Status Report This document should be prepared after an allegation has been received to inform a decision on whether to go ahead with the investigation and to help prepare the more detailed initial investigation plan. Document Two: Initial Investigation Plan This document should be prepared after the fact-finding stage and the plan should be approved by the sponsor.

Quality assurance

175

Document One (Doc Reference: ) FACT FINDINGS STATUS REPORT Investigation:

Prepare by: Date:

Source of the Complaint: Work Carried Out: Findings: Recommendation: Points for Term of Reference: Special Factors:

Document Two (Doc Reference: ) INITIAL INVESTIGATION PLAN Results of Fact Finding: Terms of Reference: Scope: Special Factors: Size Score: Investigator’s Budgeted Hours

Large

Medium Planned

Small Actual

Travel Expenses Other Expenses Fees For Experts Total Costs Investigator:

Sponsor:

Comment

176

Internal Investigations

Document Three: Investigations Risk Management Strategy This document should be prepared for larger and more complicated investigations where there is pressure to minimise any mistakes or oversights. The risks that impact on the aim of the investigation should be identified by the investigator and sponsor (ideally through robust discussion), which should result in a clear strategy to address those risks that are considered high impact. The strategy should be regularly updated. Document Three (Doc Reference: ) INVESTIGATIONS RISK MANAGEMENT STRATEGY For use in longer investigations Risks to the investigation

Completed by: Date:

High-impact risks

Risk management actions

Progress on actions

Sponsor Endorsement: Date:

Update the strategy on a regular basis

Document Four: Fieldwork Summary Schedule This spreadsheet-based schedule is the most important document in the investigation. It contains all the information required to understand the work that has been carried out and it enables the investigator to prepare and present suitable reports.

Quality assurance

177

Document Four (Doc Reference: ) FIELDWORK SUMMARY SCHEDULE Issues/claims/suppositions (cross-referenced to terms of reference)

Summary of Evidence (cross-referenced to Evidence Schedules)

Conclusions and recommendations (cross-referenced to report paragraphs)

Ref

Ref

Ref

Document Five: Diary of the Investigation This document should be prepared by the investigator for all significant matters that arose during the conduct of the investigation. It will act as a formal record of work carried out and decisions made by the investigator. Document Five (Doc Reference: ) DIARY OF THE INVESTIGATION Date

Event/Incident/Decision

Impacts

178

Internal Investigations

Document Six: Evidence Schedule This document should be prepared for each exercise that involved examining evidence relevant to a specific claim that is under investigation. The results of the evidence-gathering exercise should be summarised in the Fieldwork Summary (Document Four).

Document Six (Doc Reference: ) EVIDENCE SCHEDULE (Cross-reference to Fieldwork Summary) Claim:

Doc Ref:

Source of Evidence:

Test and Evidence Extracted:

Results (Entry for Fieldwork Summary):

Evidence ‘C’ Score (if applied):

Document Seven: Evidence Assessment ‘C’ Score Criteria This document should be used when assessing a significant source of evidence to assess its overall reliability and impact on the investigation.

Document Seven (Doc Reference: ) EVIDENCE ASSESSMENT ‘C’ SCORE CRITERIA Evidence Schedule Reference

Contrary −1

Cloudy 0

Consistent Confirming Compelling 1 2 3 (set out the reasoning for the applied score)

Concrete 4

‘C’ Score

180

Internal Investigations

Document Eight: Witness Statement This document should be prepared where an interviewee has a specific statement to make that provides important evidence for the investigation. The document may instil a degree of formality into evidence gathering and, as such, may appear intimidating for the interviewee – which means it should be used sparingly.

Document Eight (Doc Reference: ) WITNESS STATEMENT Name: Post/Role:

Date:

Investigation: STATEMENT:

This is an accurate and complete account of my statement: Signed:

Witnessed by:

Date:

Date:

Ensure that a typed version is prepared and re-signed from this record

Quality assurance

181

Document Nine: Interview Record This document should be prepared during all interviews and typed up at a later stage. The initials of the person posing or answering a question should be placed in the first column. It may be possible to prepare a typed version during the interview, although this technique may act to impair the free flow of conversation.

Document Nine (Doc Reference: ) INTERVIEW RECORD Name: Post/Role:

Date:

Persons Present: Location: Investigation: Initials

Interview Record

Ensure that a typed version is prepared from this record

Document Nine/Nine(A): Interview Record (long version) This document should be prepared during longer and more involved interviews and typed up at a later stage. The front summary box is designed to provide a short account of the key points from the interview so a reviewer need not read the entire document, if appropriate.

182

Internal Investigations

Document Nine(A) (Doc Reference: ) INTERVIEW RECORD Long Version Name: Post/Role:

Date:

Persons Present: Location: Investigation: Summary of Key Points:

Initials

Interview Record

Ensure that a typed version is prepared from this record

Quality assurance

183

Interview Record (continuation sheet) Document Nine (Doc Reference: ) INTERVIEW RECORD Name: Initials

page no. Interview Record

Ensure that a typed version is prepared from this record

Document Ten: Executive Summary Report This one-page document should be prepared as a distinct report or as a summary report when preparing more detailed investigation reports. It should be clearly marked interim/draft or final report.

184

Internal Investigations

Document Ten (Doc Reference: ) EXECUTIVE SUMMARY REPORT (Interim/draft/final version) Date Investigation:

Prepared by: Date:

Terms of Reference: Background Information: Methodology: Main Findings: Investigator’s Opinion: Recommendations:

Document Eleven: Timeline of Events This document should be prepared to reflect the chronological order of events that are being investigated. An indication may be made as to the veracity of evidence to support the information, and the ‘6C’ score approach may be applied. Document Eleven (Doc Reference: ) TIMELINE OF EVENTS Date

Event

‘6C’ Score (see Document Seven)

Quality assurance

185

Document Twelve: General File Note This document should be prepared for all records containing information that cannot be recorded on any other standard documents. All exercises involving the detailed examination of specific items of evidence can be recorded on this document and then summarised in the Evidence Schedule (Document Six).

Document Twelve GENERAL FILE NOTE Prepared by:

DATE Doc Ref Number:

SOURCE:

FILE NOTE:

IMPACT ON THE INVESTIGATION:

Document Twelve(A): General File Note (long version) This document should be prepared for all longer records of information that cannot be recorded on any other standard documents. The front summary box is designed to provide a short account of the key points from the interview to allow any reviewer to avoid reading the entire document, if appropriate. All exercises involving the detailed examination of specific items of evidence can be recorded on this document and then summarised in the Evidence Schedule (Document Six).

186

Internal Investigations

Document Twelve(A) GENERAL FILE NOTE (long version) Prepared by:

DATE Doc Ref Number:

Summary of Key Points:

SOURCE:

FILE NOTE:

IMPACT ON THE INVESTIGATION:

7.6 IT’S BASICALLY SIMPLE We have described quite a few guidance notes and checklists in this chapter, as well as illustrating how standard documents can be used to assist the investigator. The amount of material that has been discussed above may give the impression that internal investigations can be difficult to perform and record. The Basic approach is really very practical, even if there are guidelines to observe and a few forms to complete. In fact, the Basic approach is a simplified version of the more complicated ways of performing internal reviews that all professional auditors know and understand. Figure 7.2 illustrates the essence of the Basic approach to prove that it is very easy to apply in practice. The Basic approach involves making the following simple considerations: • Begin the investigation. Talk to the source of the allegation (fact finding) and prepare a plan of work along with the terms of reference. • Ascertain the issues. Find out more about the problem and the context, mainly through interviewing people and considering the procedures.

Quality assurance

187

• Substantiate the claims. Check out the facts by gathering statements, carrying out surveys and examining relevant documents, data and files. • Infer the implications. Work out whether the claims are true or not and what steps are needed to correct the problem and any fallout. • Communicate the results. Tell authorised persons who need to know about the results and who are responsible for acting on our findings.

INITIAL PLAN TOR: Diary of the Investigation

Let’s record our efforts

What do we make of the allegations? FIELDWORK – SUMMARY SCHEDULE TOR:

What’s the: Interview Records

Evidence Schedule Issue:

What people know

What does the evidence suggest?

Problem Known Our Conclusions Facts & Recommendation

REPORT DRAFT/FINAL General File Notes

Sundry Tests

Timeline of Events

What Actually Happened

Spell out the Fieldwork Summary

Figure 7.2 Overview of the Basic approach.

7.7 TO CLOSE Basic investigations are very simple but they must be conducted in a structured and effective manner. We have now completed the full cycle of planning, performing and presenting the internal investigation. We have dealt with some pretty detailed factors and some very specific practical matters to help equip general managers with a brand new skills set. Our final chapter is a chance to step outside this fine detail and deal with some of the wider ideas and concepts that come into play as we build on our discussion of corporate accountability that was outlined earlier in the book.

8 Beyond basics

The regular use of internal investigations implies there will always be problems that need to be addressed by senior management. The concept of encouraging employees to investigate each other suggests an organisation in chaos. Moreover, the task of constantly looking back on what happened often many months ago denotes feelings of pessimism as we trawl over old files and ask people to think back to past events. There is some truth in this viewpoint, in that organisations which employ large teams of investigators to check that the rest of the workforce is behaving itself may be seen by some as morally bankrupt. Two questions arise: • Why employ an army of checkers to rake over past events? • Why not just employ good people to work for the organisation so that we can spend our time surging into the future? The approach we have documented in the book should not be seen as a backwards-looking weapon to batter the workforce into submission. It should be seen as an attempt to ensure there is good corporate accountability by dealing with anything that stops an organisation being successful. It means listening to front-line staff when they warn management about significant problems: Unions had warned a major airline that their baggage staff had not been properly trained and expressed their concerns regarding the ‘big bang’ approach to transferring a large number of flights to an international airport’s new Terminal Five in 2008. The result was a failed system, lost bags, cancelled flights and a great deal of damage to the airline and the airport’s international reputation. If the original claims by the unions that there is too much risk in going for a big bang implementation had been fully investigated – the disaster may have been averted. As well as promoting corporate accountability, a forwards-looking approach to internal investigations is aimed at developing a better risk management culture, which is the main point we want to explore in this chapter.

190

Internal Investigations

8.1 WHY A RISK MANAGEMENT CULTURE? Risk management, governance and control are bywords for a successful organisation. Most scandals over the years result from: • Poor governance, where corporate standards have been lacking as top executives behaved recklessly. • Poor controls, where systems have failed or a rogue employee has bypassed controls. • A poor risk management process, where risks have not been fully appreciated, or no one bothered to explain to investors and stakeholders that a high-risk strategy was in place. These three factors can be summed up as failings in the actual risk management culture in place in an organisation or within parts of the business. The Basic approach is steeped in the desire to produce a beneficial impact on the organisation’s risk management culture. A sound risk management culture has several components: 1. Focused people who understand their risk profiles and the types of risks that most affect their business. 2. A dependence on sound control frameworks and reliable controls to help mitigate risk to an acceptable level of exposure. 3. An alertness to changes in the marketplace that means new or changed risks are assessed and integrated into the risk management process. 4. A constant search for anything that suggests the current risk management process can be improved or there are significant risks that need to be better understood and mitigated. Using our definition of a good risk management culture, the knowledge that comes from identifying and investigating problems can be a useful source of information on new risks. This constant search for new risks is spelt out in point 4 of our list of factors that support an astute risk culture. Risks can hurt an organisation, and it is those risks that are not fully appreciated that hurt most. Investigations happen when a problem arises that cannot be addressed by the usual processes in place in an organisation. That is, the current risk management process has not been set up to keep the problem under wraps. The Risk Culture Cube in Figure 8.1 illustrates an integrated approach to understanding how internal investigations, using the Basic approach, can feed into the risk culture. Figure 8.1 suggests that a formally structured internal investigation will uncover the truth behind the conduct of people implicated in the problems (What about Accountabilities?), while also giving advice on how to improve

Beyond basics

191

m?

ble

at’s

RESULTS

TASK

BASIC STAGES:

ts

INITIALPLAN PLAN INITIAL TOR: Diary of the Investigation DATE ITEM

th

Wh

Corporate Accountability

TOR

ro eP

Begin Investigation

DATE

Fac the ? o d at est Wh Sugg

Sign-Off FIELDWORK –SUMMARY SCHEDULE TOR: ISSUES

EVIDENCE

IMPLICATIONS

Evidence Schedules Issue: Aim Technique Results

Ascertain Issues Substantiate Claims Infer Implications

Quality Assurance

REPORT REPORT Draft/Final DRAFT/FINAL TOR

t bou ? at a ilities h b W nta ou Acc

Communicate

FINDINGS

Results

Risk Management Impacts

RESULTS

TOR

ls?

ntro

Timeline of Events DATE EVENT

bo

at a

Wh

o ut C

Figure 8.1 The ‘Risk Culture Cube’.

weaknesses (What about Controls?). The lapses in accountability and the type of controls that need to be improved all add to the understanding of risk and the overall richness of the risk management culture that is in place. An investigation will provide a response to concerns that are starting to come to management’s attention, and it gives them a chance to tackle these concerns before they spiral out of control: Widespread selling of ‘liar-loans’ over 2007–2008 involved many lowincome people inventing jobs and income levels, urged on by predatory brokers. Meanwhile the banks lent money on these sub-prime markets and re-packaged these loans with more secure mortgages which were traded on global money markets. As property prices slipped this type of borrowing became more exposed and many high-risk mortgages were foreclosed. If rumours of shady deals by some brokers had been fully investigated, it is possible that many of these risky loans would not have been approved. Unfortunately, the result was the 2008 credit crunch. Internal investigations can be an excellent way of improving the risk culture by asking for the right standard of conduct from employees and associates and by helping to improve risk-mitigating controls. Moreover, investigations will isolate any major new risks, such as the widespread mis-selling of

192

Internal Investigations

financial products, and can therefore create a culture that better understands its risks.

8.2 RISK SCANNING An integrated approach, whereby internal investigations are used to strengthen the risk culture within an organisation, is based on an expanded view of investigating problems. Figure 7.2 made clear how simple the Basic approach is in working out what needs fixing. We expand this theme in Figure 8.2.

INITIALPLAN PLAN INITIAL TOR: Diary of the Investigation

Let’s record our efforts

What do we make of the allegations? FIELDWORK – SUMMARY SCHEDULE TOR:

What’s the: Evidence Schedule Issue:

Problem Known Our Conclusions Facts & Recommendation

REPORT REPORT Draft/Final DRAFT/FINAL

Timeline of Events

What Actually Happened

Spell out the Fieldwork Summary

Improve

What does the evidence suggest?

Figure 8.2 The outputs from a Basic investigation.

Figure 8.2 spells out the outputs from a Basic investigation as improved conduct, improved controls and new inputs to the way risks are scanned and understood across the organisation. This wider concept means investigations reach beyond a series of one-off random inquiries that is often the case in many organisations. To sharpen the way an organisation scans for risks, internal investigations should be encouraged into any issues that indicate a risk that is not being fully addressed:

Beyond basics

193

If several staff members complain that some of the information held on their systems about customers is either out-of-date or erroneous, this should start the alarm bells sounding. A failure to investigate these concerns may lead to lost business, breach of the Data Protection Act and even the collapse of an entire product line. A proactive viewpoint changes our perspective in that we now see problems as an opportunity to design a better and more focused business. Problem solving creates scope for an organisation to learn and grow. We need to isolate risks and understand their impacts before we can go on to design controls and promote the type of conduct to keep the business under control.

8.3 ESTABLISHING CONDUCT Figure 8.2 requires the investigating officer to establish accountabilities by considering the conduct of all parties implicated in the investigation. Establishing clear accountabilities is quite different from adopting a ‘blame culture’, although there are some similarities. A flow model in Figure 8.3 can be used to draw a distinct line between blame and accountability. Figure 8.3 suggests that, where an internal investigation has uncovered major problems,

Blame Culture

Major Problem Apply Accountability Framework Deceit/Fraud/Abuse Yes

No

Problem Caused by Someone? Yes

No

Failure to Avoid Problem? Yes

Can Someone Take the Rap?

No

Sufficient Resources & Support? Yes

No

Any Reasonable Explanation? No

Yes

Disciplinary Action

Figure 8.3 Flow model.

Lessons Learnt

194

Internal Investigations

we may need to attach some degree of blame to an accountable party – but only after several key questions have been addressed. When the five key questions in Figure 8.3 have been answered, we can think about instigating the disciplinary procedure – where someone has to be held accountable for their actions, or failure to act. This contrasts with the blame culture, where an organisation responds to a problem by working out whether anyone can be set up to ‘take the rap’: A large weapons company was accused of bribing overseas officials to win huge contracts, although the criminal investigation was dropped on government orders because such a move was seen as threatening the national interest. But the scandal has never gone away and years later, the company sacked hundreds of consultants and middlemen who worked during the time of the bribery claims. Internal investigations should comment where the conduct of anyone working for or with the organisation has fallen short of acceptable standards. Not as a witch hunt, but in recognition that both accountability and controls need to be considered as a way of improving the culture within an organisation that means all risks are fully understood and suitably addressed.

8.4 ESTABLISHING CONTROLS We arrive at the topic of internal controls. An important output from an investigation is information on the state of control, and whether it needs to be improved. Complaints, allegations, errors, anonymous claims and staff concerns can all point to weaknesses in the current control arrangements that might stop an organisation from achieving its objectives. Using the Basic approach to investigate these issues means we are bound to consider giving advice on improving controls. Figure 8.4 sets out the framework for assessing controls. To achieve a successful risk culture, we need to put our workforce in a position to understand their risks and install controls that guard against unacceptable levels of exposure. Some corporate cultures focus on aggressive sales, some on cost cutting, while others are based on leading-edge customer service as different organisations strive for different control cultures. Figure 8.4 allows several different decisions ranging from designing new controls, to improving existing controls, to ensuring that people are skilled enough to comply with these controls. Intentional breaches of agreed control routines will be dealt with as an accountability issue as discussed in the previous section. As soon as the investigator has worked out the cause of the problems under review, advice can be issued on improving the control

Beyond basics

195

Problems

Underlying Cause

System of Internal Control

Lack of Controls

Inappropriate Controls

Breach of Controls

Design & Install

Improve & Refocus

Intentional? NO Train, Develop & Enforce

YES

Discipline?

Figure 8.4 Internal control dimensions.

arrangements to tackle these causes. This advice does depend on establishing an effective internal investigation in the first place: The employment of illegal immigrants in care homes gives rise to a major risk as these workers, by definition, cannot be subject to the required criminal records checks. In some homes, this practice was highlighted by ex-employees but ignored by many of the care home managers – who saved money by using cheap workers. The failure to investigate these claims means that vulnerable people cannot be fully protected and the homes open themselves up to prosecution and on-the-spot fines. Better controls over the recruitment process would have enabled the homes to only employ people who have the correct legal status that enables them to work in this field. Organisations that fail to investigate allegations and concerns will miss opportunities to get to grips with outstanding problems, and they will fail in their duty to protect the interests of their stakeholders.

8.5 CORPORATE REPUTATION We started this book by examining the importance of corporate accountability in all types of businesses and the wider public sector. Corporate accountability is driven by, and influences, the organisation’s corporate reputation, and

196

Internal Investigations

it is this overall reputation that indicates whether management has been successful or not. Problems that lie without resolution will eventually reflect badly on an organisation. Problems that are addressed in a quick and effective manner will reflect well on an organisation and enhance its reputation. Figure 8.5 outlines the types of issues that impact the corporate reputation of many larger organisations. Corporate Reputation

Failed Projects

Operational Fraud & Errors Abuse

Poor Financial Complaints Results Misstatement

Public Disclosures

Figure 8.5 Issues affecting corporate reputation.

Any significant problems relating to failed projects, errors, fraud and the other issues set out in Figure 8.5 will need to be investigated and disclosed to the stakeholder community. Rather than experiencing a problem and trying to keep it under wraps, it is much better for an organisation to disclose that they have uncovered a problem and indicate that the matter will be fully investigated using their standard approach to dealing with such matters. Unfortunately, problems that are only hinted at today may turn into a full-scale crisis some time in the future: Many companies have been warned by law enforcement agencies that criminal gangs are planting employees as ‘sleepers’ inside financial sector companies waiting to breach security and commit financial crime. If these risks are not properly investigated, major crimes could occur that may have been avoidable. When confronted with an emerging problem, most organisations use one of three options: 1. Ignore the problem. 2. Bring in a consultant. 3. Give the task to a human resource manager.

Beyond basics

197

Option 1 is obviously dangerous in the long term. Options 2 is useful but it does mean the organisation is at the mercy of a consultant who may be more interested in earning fees than resolving the issues as quickly as possible. Moreover, there are some straightforward problems that do not need an expensive professional. The final drawback is that it may be thought that the person who authorises the consultant’s fees has a great deal of influence over the work carried out and the report that is eventually issued. It is possible to assign one person to carry out internal investigations, say a human resource manager, as noted in option 3. The Basic approach that we have developed argues that the ability to investigate problems and issues should be an accepted management tool that is understood and employed as part of the ongoing process of managing an organisation. All organisations should consider developing this important new skill in a pool of managers to retain ownership of internal investigations and to ensure that these investigations are carried out in a professional manner.

8.6 TO CLOSE We have explained why there needs to be a Basic approach to internal investigations to support good corporate accountability. We have gone on to examine the stages of this approach in some detail to ensure the reader gains a solid ‘how to do it’ insight. Principles and guidance have been used to set a structure on the way an investigation might be carried out and reported to best effect. Chapter 7 on quality assurance provides detailed ‘tasks’ that may be considered when working through an investigation to ensure all bases are properly covered. This final chapter has taken a step back to consider the wider implications of using internal problems to drive an organisation forwards and make it stronger. The internet has opened up a world of information, some of which is reliable and much of which is highly questionable. Even official sources of information can be suspect as commercial concerns, along with public sector bodies, seek to massage their reputation by reporting good news and hiding tricky problems. Statistical data can be worse, in that figures can be quoted out of context to support more or less any view that is being proposed. Big business hinges on corporate reputation and trust, while stock markets can swing wildly at the merest hint of trouble or rumours of a planned takeover. Some of this information can be planted to fix share prices as buyers and sellers vie for gains or try to minimise potential losses. A well-run and impartial investigation is important in a wider sense as it can be used to tell the real story behind any issue that has not been resolved – even at a society-wide level. Public enquiries, international reviews, industrywide examinations of work practices and a whole array of projects can all benefit from using a structured approach to performing their investigatory

198

Internal Investigations

work. Returning to internal investigations, the organisational iceberg concept suggests that executives and senior back-office people sit on top of their corporate empire but the real work is submerged below sea level and, like an iceberg, most of this activity cannot be readily observed – as shown in Figure 8.6.

What Executives Dictate x

What Management Direct x x

What Employees Actually do at Work x

Figure 8.6 Model of corporate activity.

Internal investigations will address whether executives are making the right decisions, whether management are implementing these decisions properly, and whether everyone else is doing all that is required to turn these decisions into successful business products. Anything that upsets this simple equation damages the integrity of the risk management culture that is in place, and should be Basically investigated.

Index

access rights 42–3 accountabilities establishing 193–4 recommendations 127, 128 Basic approach overview 186–7 Basic (corporate) standard 4–7 Basic fieldwork 51–2 Part I: ascertaining the issues detailed consideration of issues 52–4 Diary of the Investigation 60–1 example 10, exploring 61–2 moving to next stage 62–3 practical examples 55–60 understanding the processes and operations 54–5 Part II: substantiating the claims considering claims 63 establishing the context 77 evidence gathering 67–9 good evidence 63–5 rules of 76–7 sources of 65–7 structured way of using 70 example 10, exploring 77–81 moving to next stage 81 practical examples 71–6 using data samples 69–70 Part III: inferring the implications Evidence ‘C’ Scale 83–4 example 10, exploring 92–3 getting to the implications 81–2 organisational politics 82–3 other considerations 84–5 practical examples 85–91 quality assurance checklist 155–61

tools: interviewing 95–6 Basic model 100–2 difficult situations 112–14 example 10, exploring 110–12 four dimensions of 96–8 getting results 107–10 open forum inquiry panels 99–100 preparing the interview 102–4 structure of interview 104–7 Basic guidance communicating results 136–7 conducting interviews 114–15 the context 6–7 corporate accountability 25 fieldwork 93–4 initial planning stage 48–9 Basic principles 6, 9, 27, 51, 95, 117 principle 1: corporate standard 141–5 principle 2: corporate accountability 141–5 principle 3: fact-finding exercise 150–5 principle 4: evidence gathering 155–61 principle 5: interviewing 161–6 principle 6: communicating results 166–74 bid rigging 22 body language, interviewing 109 breach of procedure 21–3 bribery and corruption 19 budget criteria 40–1 codes of conduct, breach of collusion 19

22–3

200

Index

communicating results 117–18 example 10, exploring 133–4, 135 investigator’s opinion 123–6 quality assurance checklist 166–74 recommendations for better internal controls 128–30 of investigator 126–8 reports structuring 121–2 types of 118–20 risk management 130–3 timeline of events 122–3 types of reports 118–20 complaints procedure 15–17, 66, 146–7 compliance checks 66 Computer Misuse Act (1990) 22 conduct, establishing 193–4 confidentiality, observing 45–6, 103, 146 conflict of interest 37 contract and procurement rules 22 control, initial planning stage 43–5 controls establishing internal 194–5 recommendations 127, 128 corporate accountability 9–10 breach of procedure 21–3 checklist of tasks to consider 145–50 complaints 15–17 and corporate reputation 195–7 fraud 18–20 health and safety 20–1 links to governance 11 results 12–14 size of issue 14 staff discipline 17–18 terms of reference 11–12 whistleblowing 24 corporate activity, model of 198 corporate (Basic) standard 4–6 checklist of tasks 141–5 corporate reputation 195–7

data mining 67 Data Protection Act (1998) 22, 160 data samples, using to substantiate claims 69–70 deception 19 diary of the investigation 5, 60–1, 157 document template 177 dirty tricks, avoiding 67 discriminatory practices 17 documents 5 Diary of the Investigation 177 Evidence Assessment ‘C’ Score Criteria 178–9 Evidence Schedule 178 Executive Summary Report 183–4 Fact-Finding Status Report 174, 175 Fieldwork Summary Schedule 176–7 General File Note 185–6 Initial Investigation Plan 174, 175 Interview Record 181–3 Investigations Risk Management Strategy 176 Timeline of Events 184 Witness Statement 180 emotional maturity of investigator 37–8 evidence criteria of good 63–4 nature of 64–5 rules of 76–7 sources of 65–7 structured way of using 70 unusual methods of gathering 67–8 Evidence ‘C’ Scale 83–4, 178–9 evidence schedules 5, 78–9, 178 executive summary reports 119, 135, 183–4 experts, role of 41–2 external partners, role of 39 fact finding stage 28–9 quality assurance checklist

150–5

Index

Fact-Finding Status Report 119, 174, 175 false accounting 18–19 fieldwork see Basic fieldwork Fieldwork Summary Schedule 5, 53, 176–7 financial regulations, breach of 21 forensic techniques 67 formal statements 65, 79 fraud 18–20 Fraud Act (2006) 19 General File Note documents governance 11, 190 gross misconduct 17

185–6

health and safety 20–1, 149 Health and Safety at Work Regulations (1992) 20 hour-glass opinion 125 Human Rights Act (1998) 18, 160 ICAC Approach 127 iceberg concept of organisations 198 information security standards, breach of 21–2 Initial Investigation Plan document 5, 174, 175 initial planning access rights 42–3 controls 43–5 example 47–8 fact finding 28–9 lead investigator, appointing 37–8 locating hot spots 32–4 other roles and responsibilities 39–40 publicity 45–7 quick fix 29–30 reasons for 27 resources 40–2 sponsor, identifying 35–6 tasks, establishing 34–5 TOR, setting detailed 31–2 inquiry panels 99–100 interim reports 45, 119

201

internal controls establishing 194–5 recommending better 128–30 Interview Record documents 181–3 interviewing 95 and the Basic model 100–2 difficult situations, dealing with 112–14 example 10, exploring 110–12 four dimensions of rapport 96–8 getting results 107–10 at initial planning stage 34 open forum inquiry panels 99–100 preparing the interview 102–4 quality assurance checklist 161–6 reasons for 95–6 structure of interviews 104–7 investigations aims of 12 issues and problems 2–3 levels of 41–2 line manager’s role 3 reasons for 1–2 sizes of 40–1 Investigations Risk Management Strategy 176 investigators formal opinion of 123–6 recommendations of 126–8 roles and responsibilities 39 specialist 41–2 suitability of 37–8, 153 large investigations, resources for 41 lead investigator, appointing 37–8 line manager’s role 3, 39 location of interviews 103 medium-sized investigations 40 misreporting of performance results 23 natural justice, basing investigation on 11, 12 not spots, locating 32–4

202

Index

open forum inquiry panels 99–100 open-mindedness, of investigator 38 operational procedures, breach of 23 opinion of investigator 123–6 organisational politics 82–3 performance reporting 23 planning see initial planning politics, organisational 82–3 practical examples bullying 71–2, 87 e-mails affecting productivity 74, 90 investment products 75, 91 overtime 72, 87–8 preferential performance reports 74–5, 90–1 sick leave 71, 86 unfair dismissal 73–4, 89–90 vehicle repair 73, 89 working practices 72–3, 88 see also risk register example press office, role of 39, 46 Prevention of Corrupt Practices Acts (1889 and 1916) 19 procedures breach of 21–3 recommended 129 processes and procedures, ascertaining the issues 54–5 Public Interest Disclosure Act (1999) 24 publicity 45–7, 146, 152 quality assurance 139 Basic approach overview 186–7 checklists 149–50 principle 3: fact-finding exercise 150–5 principle 4: evidence gathering 155–61 principle 5: interviewing 161–6 principle 6: communicating results 166–74 ensuring consistency 139–41

establishing a Basic approach principle 1: implementation of corporate standard 141–5 principle 2: promotion of corporate accountability 145–9 standardised documentation 174–86 questioning techniques 104–5, 108 quick fix stage 29–30 rapport four dimensions of 96–7 strategies to establish 97–8 recommendations 126–30 Regulation of Investigatory Powers Act (2000) 67, 160 reports 5 structure of 121–2 types of 118–20 reputation of organisations, issues affecting 195–7 resources, assigning 40–2 risk management investigation document 176 for larger investigations 44–5 risk management culture 190–2 risk register example (example 10) 47–8 ascertaining the issues 61–2 communicating results 133–4, 135 inferring the implications 92–3 interviewing 110–12 substantiating the claims 77–81 risk scanning 192–3 samples of data, using to substantiate claims 69–70 scheme of delegation, breach of 22 scope and size of issue 14 small investigations 40 specialist investigators 41–2 specialist personnel, role of 39 sponsors identifying 35–6 responsibilities of 36, 39 task checklist 151–2

Index

staff discipline 17–18, 147–8 standardised documentation 174 document 1: Fact-Finding Status Report 174, 175 document 2: Initial Investigation Plan 174, 175 document 3: Investigations Risk Management Strategy 176 document 4: Fieldwork Summary Schedule 176–7 document 5: Diary of the Investigation 177 document 6: Evidence Schedule 178 document 7: Evidence Assessment ‘C’ Score Criteria 178–9 document 8: Witness Statement 180 document 9: Interview Record 181 document 9a: Interview Record (long version) 181–3 document 10: Executive Summary Report 183–4

203

document 11: Timeline of Events 184 document 12: General File Note 185 document 12a: General File Note (long version) 185–6 tasks, establishing at initial planning stage 34–5 terms of reference (TOR) outlining 11–12 setting detailed 31–2 task checklist 150–1 theft 18 Theft Acts (1968 and 1978) 18, 19 Timeline of Events document 5, 122–3, 184 TOR see terms of reference (TOR) whistleblowing 24, 146–7 Witness Statement document witnesses 39, 84 witness statements 109

180