It is imperative to act decisively and quickly where allegations are made and to independently establish the facts and how to move forward to protect the company and it's employees.
Client
An International Charity
The Situation
An employee in the Finance Department of the organisation made a protected disclosure to the Deputy Chief Executive of false or misleading accounting within the Finance Department and possible fraud.
The reputational impact was significant if the allegations were true, and the organisation wanted to review its internal systems and controls to ensure they were fit for purpose.
What We Did
We were appointed to work jointly with another consultant who was an experienced internal auditor in organisations with a similar remit.
We interviewed the whistle blower and several other personnel in the finance department, and consultants working for the finance department. We also carried out an in-depth review of the organisation’s financial systems and controls and we focussed on the overall governance framework to assess how it compared with good practice in other parts of the sector.
With the agreement of the Chief Executive of the organisation we presented an initial overview report, triaging the problems, and presenting options for further work by reference to levels of risk.
We were commissioned accordingly to proceed with phase 2 in relation to the risks that were of greatest concern (which included the risk of financial misreporting, and transaction fraud).
Outcome
Our work demonstrated that the allegations by the whistleblower had some substance but were themselves of less significance than other weaknesses in systems and controls that we had identified.
Phase 2 of our work included substantial process checking, and auditing of transactions for fraud and risk of fraud, by sample and by established auditing processes.
Our final report gave assurance to the Chief Executive in relation to the integrity of the organisation’s accounts and made recommendations for changes in the organisation of responsibilities in the Finance Department and the introduction of new internal controls.
We also suggested changes in the accountability arrangements between the centre of the organisation and its substantial operating division.
"This situation could have been a minefield and have potentially explosive consequences for the company if left to fester. Axis came in and indentified where the real areas of concern were and highlighted the way forward." HW - Manager
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