Research has shown that the most powerful tools available for stopping a cycle of abuse are the employees and suppliers who witness the activity. The Association of Certified Fraud Examiners (ACFE) periodically surveys their members and the resulting statistics repeatedly find that tips from employees, suppliers and customers are the leading method of detecting fraud. The ACFE’s research also indicates that organizations with a fraud hotline in place cut fraud by nearly 60%.

Most public agencies have some form of a fraud hotline in place. The communications that publicize the existence of the hotline should be used as an opportunity to promote ethical behavior as well. Developing an ongoing communications campaign to encourage appropriate behavior deters fraud and helps create a more ethical culture within the agency. Understanding the communications tactics that will have the greatest impact on fraud gives auditors more knowledge to assist in stopping fraud, waste and abuse of public funds.

According to the National Business Ethics Survey (NBES) of 2003, there is a strong correlation between communication programs and increased reporting of misconduct. When communications are present, employees feel more comfortable reporting issues of fraud. The best campaigns teach employees how to recognize and report unethical behavior while using a positive tone.

The purpose and confidential nature of the hotline should be a topic that is always mentioned, but should not be the only focus of communication. This will enhance the program by nurturing an ethical environment and helping honest employees realize they can help the agency by reporting harmful activities.

Let’s look at the example of a posting in employee break rooms. This might simply be a sign that says “If you are aware of fraud or abuse, call 800-000-0000 to report it.” This makes employees aware of the phone number, which is important, but that is all it accomplishes. A more effective approach would be to offer a more engaging poster with a message beyond just the phone number and its purpose. A poster with a picture of a hand off of money gets attention. The corresponding message should describe the agency’s commitment to maintaining an ethical workplace and the expectation that employees and suppliers with avoid illegal activities. The hotline information is the final message, described as a option for those who are aware of questionable activities and would like to file a confidential report.

The mere presence of a hotline and the corresponding communications campaign can also deter fraud. Creating an awareness of workplace ethics diminishes fraudulent activity, according to the NBES survey. A tactical communications campaign focuses on appropriate behaviors in order to educate employees and help them realize they are accountable for their actions.

A fraud prevention communication plan will be more effective if it builds on proven models regarding mass communication. The advertising industry develops communication around three cornerstones: message, reach and frequency. Stated simply, an engaging message needs to reach the right person at the right time in order to influence that person to take action.

Message. Creating “messages” about ethical behavior may seem awkward at first, given the implication that unethical behavior is underway. Maintaining a positive tone of voice in frequently repeated messages from top management will eventually make the impression that the agency is focused on nurturing appropriate behavior as well as discouraging inappropriate activities. For example, instead of saying “Report Abuse” on a sign as the entire communication to employees, the head of the agency could post a letter or send an email once per quarter that makes a statement about an ethics topic. Hearing repeatedly from the top executive about the importance of every employee conducting business with the utmost level of professional honesty will give the communication more credibility over time.

Communications should also be specific, illustrating issues where possible, because this makes the message more personal to the recipient. Discuss the types of behaviors that are condoned and emphasize a commitment to maintaining an ethical workplace. In the same message, outline options for reporting behaviors that are unacceptable. Again, keeping the tone of communications serious but positive will enhance the effectiveness of your program.

Reach. Information about ethical behavior should be directed to different “audiences”. For example, communication should be directed toward suppliers as well as employees. This is imperative because just as internal employees report issues like expense report abuse, the employees of vendors have been known to reveal fraud schemes such as deliberate over billing or requests for kickbacks. If the agency is trying to overcome a past history of prevalent fraud, the general public is a critical audience and needs to receive messages that are tailored accordingly.

Most agencies will find that communication involves several vehicles. Leverage existing tools like newsletters, email, recurring employee meetings, breakroom postings and pay roll inserts to send information about ethics and the hotline. In order to nurture an ethical culture, all employees should be included in communication, even if this requires mailings to their homes.

Reaching suppliers typically involves mailings, language in contracts and messages in payment checks. One important aspect of communication to suppliers is attempting to reach beyond the top executive or primary contact person, because other employees, especially those in accounting, may be aware of schemes like over-billing. Internally, try to avoid the mistake of only sending information to managerial or white-collar employees.

Frequency. Reaching the right people with frequency is critical for the success of the hotline for fraud detection. Like any operational process, the hotline will only work if people use it, and people will not remember the hotline unless they hear about it more than once a year. This point is best illustrated by looking at the world of consumer advertising. Advertising industry research indicates that Americans are exposed to 1,500 promotional messages in a typical day. Given the daily flood of information we process, it is hardly surprising that people do not recall what they heard in an employee meeting last month. Sensible human behavior dictates that we each heavily edit the information that we retain to only include things that we believe to be relevant.

For example, if you are not thinking of buying a car you probably will not remember the car ads that run during the last television show you viewed. On the other hand, if your car just left you stranded and its time for a new one, you probably watched the entire ad. Manufacturers understand that they must stay in front of you frequently so that they grab your attention on the right day. The same principle holds true for communications about reporting fraud. Hotline messages become relevant when someone has noticed questionable activity. Repeating hotline information will help the message reach the right people at the right time.

The AICPA has published guidance for both corporations and public agencies regarding whistleblower communications and the surrounding communication. The AICPA’s suggestions for cultivating a vigorous whistleblower program include:

Employee communication regarding the hotline should mention protective measures like the use of a third-party provider (if this is the case), the fact that caller ID is never used and that the hotline provides a way for the tipster to maintain an ongoing dialogue while remaining anonymous.

To view the complete list of questions in the AICPA’s whistleblower tool, visit: http://www.aicpa.org/audcommctr/toolkitsgovt/Whistleblower_issues.htm

One of the most important aspects of both employee communications and the hotline’s processes is the safeguarding of confidential information. Any information regarding the hotline should mention that reports are confidential and that anyone making a report can remain anonymous. People who investigate allegations should be thoroughly trained about the importance of protecting the identity of the whistleblower and the details of the investigation.

Whistleblower communication strategies can help local government auditors and agencies discover potential fraud, waste and abuse within their agencies. The fight against fraud may seem like an ongoing battle for agencies, but communication strategies and anonymous hotline can have a long-term impact through cultural change.