• BDO Forensic Insights

    Volume 1

Topic: Whistleblowing

A statement about COVID-19

The last six months have flown by and today we are in a phase of challenge - a true black swan event. Now is the time to ensure your whistleblowing service is working.

With the initial focus of the pandemic on the health impacts, many businesses transitioned to work from home arrangements to keep employees safe and comply with lockdown rules. However, this shift may have diluted the established controls in your business and put you at greater risk of misconduct such as financial crime.

Financial Crime

What has changed since COVID-19?

Watch now

Welcome to the perfect storm for corporate criminal behaviour and a perfect scenario for you to rely on your whistleblowing service. But, why is this the case?

Remote working – employees working remotely can reduces management visibility over workplace activity and hinder normal internal reporting channels. Therefore, access to an external reporting mechanism is a good way for management to keep their finger on the pulse.

Redundancies and restructure – some businesses may need to reduce their FTE leading to redundancies as well as potential financial crime risks. Two examples of this are:

  1. The people leaving could pose an increased risk to the business in terms of corporate criminal behaviour. While the majority probably won’t, be vigilant of the possibility.
  2. When people leave or are made redundant, role restructure becomes necessary. This restructure change can lead to a risk profile change and consequently, your financial crime risk assessment (fraud, corruption and/or money laundering) will need to be revisited.

Third party relationships – we have seen these relationships be redefined during COVID-19 due to supply chain disruption caused by border closures and lockdowns. In some cases, this has led to poor behaviour, either by or involving these third parties. The reach of your whistleblowing program to these third parties can greatly increase detection of this activity.

Key takeaways

  • Check your Whistleblowing Policy against ASIC Regulatory Guide 270 – Whistleblower policies which prescribes an extensive list which, in ASIC’s view, should be included in a compliant whistleblowing policy.
  • Ensure your whistleblowing hotline has been correctly implemented. Just because you are not receiving calls doesn’t mean that your business is in good shape culturally. Sometimes it is because the ‘hotline’ has not been integrated into your business correctly. Your employees and third parties should know how and where to make complaints about misconduct despite any workplace changes that may have occurred. This is also a good way to keep employees engaged with the business while working remotely.
  • Urgently review your financial crime risk documents, in particular, your fraud and corruption risk assessment and/or anti-money laundering risk assessment (if applicable). Ensure the risks and controls are still appropriate and reassess against the impacts of COVID-19 to your business.

Whistleblowing hotline

If you don’t have a whistleblowing hotline then contact us for a quote for our BDOSecure service.

“Your service provides our company with a valuable barometer for any misbehavior occurring in our day-to-day operations”

- BDOSecure CLIENT

Regulatory news

Latest updates and advice from Australia’s regulatory bodies

Regulatory enforcement has softened to allow business to cope with the effects of COVID-19. A softening, however, does not mean turning a blind eye. BDO is closely monitoring the regulatory environment to ensure clients are complying with their regulatory obligations. We are also regularly communicating with the regulators to ensure we are contributing to proportionate compliance in these times.

In an environment of increased fraud and misconduct, Australian Securities Investment Commission (ASIC) advised that responding to reports of misconduct and whistleblower reports remains a priority, and any business involved in such conduct will have its governance arrangements scrutinised. If you are caught by the Corporations Act please review your governance arrangements in relation to whistleblowing.

The Fair Work Ombudsman (FWO) stated that it will support workplaces through COVID-19 and seek to reduce the regulatory burden. However, the FWO said it will place significant focus on allegations of “serious non-compliance with workplace laws” including complaints about JobKeeper.

The Australian Taxation Office (ATO) announced its plans to target misconduct in relation to the various government stimulus packages. Part of its strategy is through the use of whistleblowers.

AUSTRAC remains focussed on remediating any company who fails to adhere to AML/CTF obligations and will prosecute where required. The message is clear - if your organisation is enmeshed in any form of misconduct, expect swift regulatory attention even during COVID-19. If your governance arrangements are found wanting, repercussions will follow.

In the news

We highlight the top news from Transparency International within Australia.

  • Public servants feel safer to report misconduct while working from home, according to head of whistleblowing service (August 2020). While the coronavirus pandemic has placed immense pressure on public servants across jurisdictions, the move to working from home has given many employees the confidence to speak out about wrongdoing
  • Murdoch University scraps prestigious course amid suspicions of payback for whistleblowing (August 2020)
  • In early February, Qantas stood down an aircraft cleaner and union representative who raised concerns over cleaning standards in aircraft — a matter that is now being investigated by WorkSafe NSW. This is after WorkSafe issued formal breach notices to Qantas a month later for failing to provide cleaners with a safe system of work, forcing them to handle wet tissues, used face masks and dirty nappies without proper protection. Adelaide Airport has also since been brought to a near standstill by a COVID-19 outbreak among Qantas baggage handlers.
  • In June a Sydney doctor working on the COVID-19 response was forced to sound the alarm that vulnerable patients in forced hotel isolations are not getting the care they need. Given the huge potential human cost of these decisions, we can only watch carefully and hope for a speedy and positive response.

Assistance

If you have any queries or need any support please do not hesitate to reach out to our specialists.

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