Anti-fraud pros are best-suited to assess organizational cultures

Anti-fraud professionals are uniquely positioned to diagnose sick occupational cultures. Here are answers about workplace cultures that can help head off fraud before it occurs.

In 1997, at the height of the fallout from the largest fiscal bankruptcy ever suffered by a county in U.S. history, caused by reckless investment speculation, the Orange County (California) Board of Supervisors requested that the internal audit department develop and lead interactive workshops, known in the profession as “control self-assessments” (CSA).

The supervisors wanted to promote transparency and integrity in decisions, exchanges and disclosures, and embed a fiscally conservative, customer-centric and cost-effective culture across all county departments. They viewed these workshops as primary sources of information in determining how close or far away the attitudes and behaviors were to the newly desired values and vision for the county. The board also knew that one benefit could be a reduction in fraud, waste and abuse and, ideally, the avoidance of a repeat of the kind of breakdown in oversight and mismanagement that triggered the bankruptcy.

The most frequently self-diagnosed shortcomings in cultural attitudes and practices included such dysfunctions as:

• Inadequate supervision and training favoritism in internal promotions. 
• Lack of transparency and oversight in decision making. 
• Deviations from rules and policies. 
• Inconsistent treatment of employees. 
• Failure or reluctance to elevate bad news to upper management and/or the board. 
• And, on some accounts, retaliation against employees for raising concerns about possible or actual unethical behavior.

The revitalized board and management implemented immediate and long-range fixes in response to input from blue-ribbon task forces, external auditors and consultants, CSA workshops, and financial and performance audits.