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Proactive vs. Reactive Investigations

Did you know proactive investigations can oftentimes stop an issue before it starts? We

regularly receive project requests from those who could have saved considerable time, stress, and money by reaching out sooner.


Six Successful Proactive Investigations Case Studies and Lessons Learned:


Asset Searches

Many Asset Search inquiries involve clients who have invested, often large sums of money, with individuals who promised sizeable returns on our client’s investments. Unfortunately, our basic investigations frequently reveal the true identities of the individuals to whom the funds were provided. In many cases, our client would never have invested, loaned money or done any business with the less than reputable individuals identified.


Lesson learned: Do not invest or loan money to anybody without a least a cursory check of their background.


Employee Misconduct & Theft

Owners and company executives are often willing to accept minor indiscretions or petty thefts and turn a “blind eye” to avoid a disruption to their organization. We have conducted many reactive investigations when clients receive tips, or their employees are arrested for criminal acts. These investigations include theft of company materials, use of company equipment and violations of company policies. The most common thing stolen from a business is “time.” Whether billing for overtime not performed, or working fewer hours than compensated for, the theft of time can compound into major losses.


Lesson learned: People often don’t do what you expect, they do what you inspect. Proactive investigations can save considerable time, money and headache.


Expense Abuse

The abuse of travel expenses is far reaching and can result in significant losses. Is your company reimbursing staff for mobile phone expense? Are different employees compensated at different amounts? Why? Are employees using personal vehicles for business related work? Are they using fuel cards? Or being paid for mileage? Are employees putting their companies at risk transporting children to school or sporting events, outside of their normal work hours? Have the required employee auto insurance policies/ coverages been reviewed? Are the company credit cards closely monitored?


Lesson learned: These inspections, audits, compliance reviews do not need to be overbearing or intrusive, rather part of routine proactive protocols.


Inventory Fraud

The technological advances in inventory control automation have drastically decreased mass inventory fraud, but proactive oversight can eliminate everything from slight to significant loss. A recent project placed us undercover in a packing plant that reportedly was regularly missing large quantities of product. Our operatives noted many deficiencies that ultimately helped the client improve their management and inventory processes. The most notable finding was an overheard conversation (argument) at the end of a shift where mentions of “fudging” inventory numbers was mentioned. After a detailed audit of inventory and inventory protocols, it was revealed that a true inventory had not been taken for months.


Lesson learned: Even though many processes, including inventory are now automated, there is a need for periodic oversight.


Company Asset Management

Asset Management can be cumbersome for companies. A recent client provided computers to all employees (approximately 125) which totaled a $250,000 asset investment. Interestingly they did not have a protocol for recovering a laptop from a departing employee or how to reissue devices to new hires (The same questions can be asked of any tech.)


Lesson learned: Proactively managing of company assets by mapping out protocols for employee issued devices can save considerable loss.


Vendor Management

Average businesses can have anywhere from 25 to 100 vendors, from phone & internet service to printer maintenance, cleaning companies and payroll & bookkeeping services. It is important to review vendor lists and activity to ensure safety, legitimacy, and effectiveness. Annually auditing vendors does not remove trust, in fact, it improves it. What do you expect from each vendor? How are they being paid?


Lesson learned: Simple proactive audits of vendors and credit card accounts protect the company, its processes, and its assets.