Why your whistleblowing policy may be failing

 As a business owner, you know just how damaging fraud can be. You also know that the best way to stop fraud within your organization is to encourage whistleblowing. So, you set up an anonymous hotline, send a memo to your employees, and wait for the calls to come. But what happens if they don’t?

Don’t be fooled: no calls doesn’t mean your business is fraud-free.

However, before we can talk about why your fraud hotline is failing, let’s talk about why you need it to succeed. As mentioned earlier, fraud can be devastating to a business (particularly small businesses), and whistleblowing is one of the best ways to uncover this type of misconduct. 

Fraud hotlines can help you catch bad actors as soon as possible, saving your business countless losses. According to research from the Association of Certified Fraud Examiners (ACFE), a fraud hotline can help reduce the duration of a fraudster’s scheme by as much as 33%! The sooner you learn about fraud within your business, the sooner you can stop it.

 1)  Leadership 

All changes to company culture have to come from the top if you want them to stick. Fraud hotlines are no exception. If your organization’s leaders don’t prioritize the hotline, your employees will be far less likely to use it!

Make sure that your business’s leaders openly promote the fraud hotline by reminding employees of its existence and providing clear instructions for using it (ideally through signage or references employees can access on their own). This can make a huge difference in the number of reports you receive.  

 2)  Lack of Training

Most of your employees won’t give your fraud hotline a second thought — until the day they need to use it. In this situation, you must properly train your staff on how to access the hotline and report what they’ve seen/hear/experienced. 

Your employees should have easy access to information about your fraud hotline. They should also be able to find this information on their own in an employee handbook or online portal. After all, the anonymity of the hotline is ruined when employees have to ask their manager for the number!

 3)  Nervous Employees

One of the biggest reasons that employees don’t speak up when they witness fraud or other forms of non-compliance is the fear of victimisation. They don’t want to speak up if doing so costs them their job, their chances at a promotion, or simply a pleasant working environment. 

This issue can be challenging to overcome, but it speaks to the importance of great non-compliance training. Make sure your employees understand whistleblower laws, as well as your company’s anti-retaliation policy (if you don’t have one, get one). This will help reduce fears and likely lead to an increase in reports.

 4)  Unused Data/Reporting

Your fraud hotline may be failing EVEN IF you are receiving regular reports. How? If the insights you receive aren’t being examined or used to make changes. Your fraud hotline does much more than weed out bad actors; it tells you where you can improve the workplace. 

Use the data from whistleblowers to inform how you train employees. Use it to enhance your online security. No matter what reports you receive, the information can help you get a clearer picture of your company, and you can always use it to your benefit!  

 5)  Lack of Action 

Finally, the last thing that can contribute to a failing fraud hotline is a business’s failure to take action. If your employees report misconduct, but you deem it “not credible” and fail to investigate, your employees will believe that you simply don’t care! Not only will this behaviour lead to fewer fraud reports, but it will also erode the trust between you and your team. 

Every time there is an employee complaint on your hotline, it’s critical to take some action. Whether that means a full investigation or an in-house memo reminding staff of some rules depends on the claim, but taking SOME action is essential.

 Your take-home;

Using fraud hotlines can be hugely beneficial to your business. However, you will only reap the benefits if you use and promote whistleblowing correctly. If you don’t, you may find yourself falling victim to one of the mentioned hotline pitfalls — which can spell trouble for your company.

With the right training (for employees and yourself), your fraud hotline and attitude to whistleblowing can quickly become a benefit to your business.

INSURANCE FRAUDSTERS!

Well, I recently read an article in one of the mainstream dailies that the Association of Insurance Brokers of Kenya (AIBK) has moved to court to challenge the law that stipulates penalties on insurance fraud. The association has sued the National Treasury Cabinet Secretary, the Attorney-General and the Insurance Regulatory Authority while seeking to stop the implementation of the Insurance (Amendment) law.

Reason:

According to the details of the suit, amendments to the bill did not balance the rights of all industry players frustrate government policy of growing insurance penetration and criminalises handling of premiums by insurance brokers. Through their lawyer Paul Muite, they say the bill that was assented to on July 5 also seeks to bar brokers from collecting premiums.

“The implementation of the contentious law will have far-reaching implications that will result in wiping out the business on insurance brokerage in Kenya as well as jeopardise livelihoods,” said Mr Muite.

The contentious bill;

MPs passed the bill following lobbying and apparent kickbacks by insurance firms on reports that brokers delay remitting of premiums and that their agents engage in fraud.

Insurance firms now see brokers for who they are, an unnecessary middleman!

Protect this crime, please! Damn!

But now the brokers are seeking court protection, saying the new law puts them at risk of being arrested and prosecuted following its gazettement on July 19.

What is the crime?

Usually, brokers and agents act as intermediaries between policyholders and the insurance companies, advising buyers on products, policies available, and collect premiums.

From the suit details, the AIBK alleged that the sector will be plunged into a crisis leading to the loss of business and revenue among its members.

It also alleged that at least 5,000 individuals whose livelihood as well as families depend on them will be affected. The group has termed the disputed law as punitive and discriminatory against the petitioners’ members.

Sickening;

To that point, I sit up straight and sigh! It’s sickening that AIBK is fighting to undo a bill meant to put a check on crime. For the bill to be drafted, Insurers had suffered enough at the hands of these brokers.

Let’s take a look at the suffering;

·         Consumers of insurance products end up paying much more premiums to this middleman to cater for brokerage and transaction fees – unnecessarily putting more pressure on their pockets and or businesses.

·         The middleman still charges the insurance company for acting as agents – thus reducing the revenue portfolio for the insurance company.

·         As if the above is not enough, brokers still hoard these premiums and delay remittances to the insurance companies thus chocking the insurers further.

·         Various frauds reported in the recent past have been orchestrated by staffs of these brokers using insider information and expertise. This, insurers say contributes to more than 15% of claims lodged – FRAUD!

My English teacher back then, one Madam Makhanu, taught me that it is always fine, no matter what society will think of one, to call a spade a spade! I will this one out without fear of contradiction, insurance brokers are an unnecessary middleman in the insurance industry – PERIOD!

The suit is therefore utter gimmick and a complete mockery of the court process and the suit should be thrown out with costs to the complainant!

Respect to construction workers

I have such deep and profound respect for guys who work in construction sites. Those guys carrying mortar and blocks up and down endless staircases that don't even have banisters.

The guys that report to work 6.00am and leave at 8.00pm, the guys that are paid Kshs.25 or less per every hour worked, those guys who have to stand being yelled at and reprimanded for the tiniest bits.

The guys who barely make it a week without something damaged being deducted from their wages, the guys who have a wife and kids to educate in some community run CBO somewhere in Mukuru kwa Njenga & the poorly patched-up cartons of Soweto.

The guys that quit learning how to dress well but found comfort in Gikomba and the streets of Kawangware, those guys who are content in one pair of battered shoes because other people and priorities come before their own, those guys who struggle to keep up with the ever increasing financial demands of today's society but can still remain optimistic for a better tomorrow.

Those guys to whom unga and kerosene rising by shs.1 can mean him sacrificing his meal for his kids to have enough, the guys who are so far that NSSF & NHIF remains a dream to them, those guys who never complain and still go home every evening and find hope in the eyes and dreams of their children...,

Those are the guys I'd stop what I'm doing and take a bow for.

It's NEVER what you do to put food on the table that matters, it's your attitude towards it.
May God SO RICHLY bless these men

WHEN LUXURIES BECOME NECESSITIES

We’re all susceptible to inflating our expenses, and it’s especially hard to ignore once we get used to a lot of these “finer things” in life. Even if they don’t seem like “luxuries” anymore!

You wanna see what they are?

Of course, you do:

1. Smartphones. The biggest culprit of all! A decade ago I was just fine calling and texting around with my friends, and now if I go an hour without swiping on it then I have a minor heart murmur! I may just need to check into a psychiatric den.
2. Laptops. A bit more productive than the above, but I’m still very much attached to it more so than I’d like (if only you didn’t need a computer for blogging!).
3. Internet. The bad boy that connects our entire lives!! You literally disconnect from this one thing and your entire world is blocked out – and wallet expands overnight. Screw Netflix and YouTube! Lol!
4. Coffee shops. Remember the time before Javas or Starbucks, etc? ME NEITHER! Because that was NO LIFE without coffee on every corner!! It’s a freaking addiction…. And please don’t mention beer here!
5. Cars. Believe it or not, there was also a time where people walked distances currently unimaginable. Right now you just “Taxify” or “Uber” yourself to point B with the tap of a button. Cab hailing Apps are on each of sin 1 and 3 above!

Best to just never try anything fun so you never have to worry about getting hooked, haha… At least that’s my reasoning for staying away from hard drugs and weed my entire life.

I take one swig of booze and puff of ganja and get hooked on both on the spot! Ain’t no way I’m trying anything else and forever knowing the difference? Damn!

PSST:

Not everything we spend our money on is bad, of course, but if you don’t know why you’re still spending the way you are, it might make for a good opportunity to reassess and get back to the basics again. And good luck with that!

So, lets have some fun on this;

What are some of the luxuries you’re now accustomed to that you weren’t even aware of?

THE RED FLAGS OF PROCUREMENT FRAUD

Procurement fraud is not difficult to spot. Chances are you have witnessed potential signs of procurement fraud in everyday working life, so look out for potential ‘red flags’.

It should be noted red flags below are only an indicator there may be issues or concern, but doesn’t necessarily mean there is fraud. 

A.   BID RIGGING

1)     Identical bids, different bidders. The bids submitted by different contractors contain the same line items or the same bid.

2)     Higher cost. All bids are higher than the projected cost and prices

3)     Rewarded bid losers: Subcontracting losing bidders with or without the client’s knowledge.

4)     Tampering of bids. Physical alteration in one or more bids especially during the last minutes or after submissions.

5)     Anomalous cost difference. Obvious cost difference between the winners’ bid and the other bids.

6)     Similar increase in bid prices. There is a common similar per cent of increase in the bid prices even though they came from different bidders.

7)     Similarities. There are physical signs of collusion in the submitted bids (i.e. same handwriting, same numerical errors, same contact information, etc.)

8)     Coercions from the procuring entity. Qualified bidders initially took steps to bid but decided to not continue.

9)     Same rankings or no bids in rebids. Rebidding results show that the companies have the same ranking as the prior bidding or some bidders didn’t submit any proposal at all.

10)  Increase in cost. There are similar and standard increases in the costs of some line items when the project is rebid.

11)  Prices of the items drop once a new bidder comes into the picture

B.   MISINTERPRETATION OF FACTS

1)     No recorded minutes of the bid-opening meeting.

2)     Minutes of the bid-opening meeting are not signed in the original form by those who attended the meeting.

3)     There are time delays between the bid-opening and the dissemination of the minutes of the bid opening to all bidders.

4)     Lacking records. Procuring entities fails to keep written records of the procurement process (i.e. written reports on bid evaluation process, minutes of the meeting, copies of submitted bids, copies of correspondence of the bidders.

5)     Tampering bids. Submitted bids contain written corrections, deletions, or interlineations that changes key information (i.e. prices, validity period of the bid).

C.   KICKBACK BROKERS

1)     Single sourcing of a bidder. Contracts are awarded to the same supplier without competition at higher-than-market prices.

2)     An unnecessary middleman. A middleman or local is involved in a contract and his addition has no obvious value to the performance of the contract.

3)     Giving gifts. This occurs when procurement officials accept expensive gifts and dine in meals with bidders or their local agents.

4)     Overtly rich government officials. There are rich public officials who are in-charge of overseeing or implementing the procurement program even though their salaries are low.

5)     Reputation. Locals know the credibility of their officials and know when he/she accepts or demands bribes.

6)     Repetitive poor contractors. Concurrent awarding of public contracts to poor performing contractors.

7)     Ex-officials are suppliers. The former government officials become suppliers to the group that got the contract.

8)     Family connections. Local agents or suppliers are closely related, either through family or friendship with officials who run the procurement program.

D.   USE OF SHELL COMPANIES

1)     New names. Unknown companies with no track records in doing contracts serve as subcontractors to foreign or local contractors.

2)     Secrecy jurisdiction. A contractor or subcontractor company is registered in a “secrecy jurisdiction.” Otherwise called “Tax havens” where legislations allow for undisclosed offshore financial activities.

3)     Payments are made against invoices to accounts held by companies registered in a secrecy jurisdiction for contractors who are otherwise locally registered

4)     Opaque structure.        Subcontractor companies have an unclear ownership structure.

5)     No names. The owners of the subcontractor companies are listed as law firms or as incorporation agents and not the individual’s names.

6)     No offices. Subcontractor companies have no corporate facilities (i.e. headquarters, office space, etc.)

7)     Personal numbers. The phone numbers provided by the subcontractor companies are personal numbers or answering services.

8)     Family business. The family members of senior government officials own or manage the companies that receive the contract.

9)     Official sightings. Government officials are often seen in company offices or headquarters.

KE VS UG: THE BATTLE FOR FIRST OIL

ON YOUR MARKS:

Kenya has a 2022 target for “first oil” exports from Turkana through a pipeline via the new Port of Lamu. And here I am not talking about the “early oil” that Kenya is trucking to Mombasa from Turkana, which in reality is an operational activity to remove oil accumulations from past drillings of exploration and appraisal wells. I am correctly referring to commercial-scale exports through the Turkana-Lamu pipeline.

Across the border, the Ugandans are also planning to export their first commercial oil from Lake Albert oil basins through a pipeline via the Port of Tanga in Tanzania. Their target first oil export date appears to be slipping from 2021 to 2022.

GET SET … AND GO!!

Yes, it will be interesting and indeed healthy competition to watch who between the two countries and the two ports of Lamu and Tanga will be ahead in flagging off the first oil export ship.

It gets juicier with both presidents wanting to lay their legacy on these projects!

DISTANCE TRAVELLED:

Uganda discovered commercial oil in 2006 while Kenya found theirs in 2012. At one point the two countries had agreed to export their oil through one joint-venture pipeline passing from Western Uganda via Turkana to Lamu. However, this plan was dropped in 2015 when Uganda, for whatever reasons, decided to build their pipeline, through BongoLand, to Tanga jointly with the Government of Tanzania.

The 821 km Turkana-Lamu pipeline is planned to pump up to 120,000 barrels per day, while the 1445 km Uganda/Tanzania pipeline is planned to through-put 216,000 barrels per day.

Uganda is also simultaneously planning to construct a new 60,000 barrels per day refinery near the oilfields for completion about 2022.

My assessment is that in terms of alignment of various participating parties; legal/institutional capacity development; and status of project design studies, Uganda is definitely way ahead of Kenya. The only hitch, which was encountered recently, is serious disagreement on commercial terms (tariffs) in respect of the Uganda/Tanzania pipeline between the investors and the two governments.

BET ON UGANDA TO WIN;

If pipeline commercial terms are thrashed out in good time, it is possible for Uganda investors (Total, CNOOC, and Tullow) to commit investments and realize their production and pipeline projects for fist oil exports by 2022. Construction lead times are usually three years.

THE ODDS AGAINST KENYA WIN:

On the Kenyan side, the investors (Tullow, Total, and Africa Oil) are working at full speed to conclude their design studies in good time to permit final investment decisions by the end of 2019.

This would mean production and pipeline projects construction commencing in early 2020 for first oil export by 2022.

However, Kenya is not as ready as Uganda is. The facilitative legal and institutional capacity development is certainly miles behind Uganda. Commercial and fiscal terms are understood to be far from being agreed between the Kenya government and the investors, with no visible indication when this will be concluded.

While the land issues are mostly sorted out in Uganda, in Kenya we are just beginning the land acquisition process with evidence of weak alignment between national and county governments. Pushing oil from the wells will require large amounts of water that will need to be pumped from Turkwel dam in the neighbouring West Pokot County to the Turkana oilfields. For this to be realized, necessary protocols will need to be agreed and finalized early enough.

The above issues are likely to delay investment commitments by Kenyan oil investors. It is my opinion that unless the Kenya government prioritizes attention on the Turkana oil, Kenya may needlessly miss the 2022 date which would be very unfortunate.

In Uganda, oil has always received the highest possible level of official attention and facilitation.

With the latest near-total focus on THE BIG FOUR AGENDA in Kenya, there is a danger of oil development falling outside the cabinet priority radar.

Outstanding agreements need to be polished and signed. Legal, Institutional and technical capacity development needs to be fast-tracked. Well-oiled relationships between national and county governments will also need to be created and nurtured.

This way Kenya can be a serious contender for the “2022 first oil export prize” within the friendly contest with Uganda.

There is no compelling reason why Kenya should not make the 2022 target.

Dead weight employees!

You do not particularly like it but you're hanging in there. The bills have got to be paid, somehow. You hope it doesn’t but it is reflected in your every move. You only work as much as they’re paying you and fold up by 5:00pm day in, day out and wait to dishonestly take home a salary you haven’t earned come end-month. You've grown beyond the job or the job has grown beyond your capabilities. Either way, you're stuck, stagnant and miserable.

Stagnation is frustrating because we are built for continued progress. By sitting around sulkily doing your bare minimum, you're effectively firing yourself and creating a vacuum in your position for a more energetic and engaged professional.

There's probably nothing wrong with your job but you're definitely the wrong person for it at this time. No one will have any qualms letting you go. If that’s not the outcome you’re hoping for, there are three ways in which you assure yourself continued growth in any position that you hold.

BE RELEVANT:
First, establish that there is a need for what you do — a vacuum that your skill-set and professional drive fill.
Secondly, ensure that you are willing, ready and able to consistently provide the service. Lastly, no one ever really is but get as close as possible to being irreplaceable. You want to work in such a way that your excellence is unrivalled. There must be great difficulty in replacing you because your standards are very high.

It is not easy or fun but intelligent leaders have an inner knowing of exactly how to lead effectively. Authentic leaders know that there are those that are unwilling to do more than what is expected. This lot will rarely be challenged enough to remain engaged. If we are not for whatever reason willing to do more than we are paid for, we will never be paid for more than we are doing. We all want to be paid more.
The question is; do we actually do more or do we only do more when the appraisal period is around the corner?

KNOW WHEN TO LET GO!
Firing people is as important as hiring them. This is true both for the organisation and the employees. Intelligent leaders will simply not keep deadweight. Not for long, anyway because it is tantamount to defrauding their organisation by paying people for poor delivery. Not decisively dealing with weak links in the team sets a precedent for poor performance.

Popularity is rarely a true leader’s priority. A leader is a person with thick enough skin to make difficult decisions.
You see; a true leader is very clear about what may not be obvious to others. If the end result of an action or inaction will not positively contribute to the organization's objectives, his/her vision and legacy, it has got to be changed for the better. That's all there is to it.

If you’re bored to the point of non-delivery of the service you promised to give, do the right thing. If you’re unwilling to do more than you’re being paid to do, do the right thing. The right thing is to either change your attitude and meaningfully contribute or honourably resign and create the space in your life for what you’re willing to commit more of yourself.

If you’re keeping deadweight in your team, do the right thing — develop them or let them go thereby creating space in your organisation for better talent to come in.