Breaking Down Employee Misconduct and Internal Investigations

Internal investigations are no joke, especially if it involves employee misconduct or a misuse of funds from the organization. Ensuring leadership takes a unified approach to internal investigations is crucial for earning employee trust. “If an internal investigation is handled correctly, it can earn a sense of respect and trust from the employees of the company. They are much more likely to buy into the company culture if it is something they respect,” says Michael March, a tax attorney at Whiteford Tax Defense.

This article breaks down how you should be handling your internal investigation in a way that earns your employees’ trust.

Activities that Trigger an Investigation

While this isn’t an exhaustive list, here are some things that could trigger an internal investigation:

• Embezzlement
• Asset Misappropriation
• Financial Statement Fraud
• Harassment and Discrimination
• Misuse of Company Resources
• Workplace Violence
• Alcohol and Drug Misuse

These are some of the things you should keep an eye out for when deciding whether or not an internal investigation is necessary.

Your Guide to Conducting an Internal Investigation

With all internal investigations, ensure that you are gathering indisputable evidence regarding the claim at hand. Bring financial documents, work messages, employee witnesses, and all hard copy resources you can find to support your claim. 

Be sure to also prioritize mitigating the risk that has been done. Put the employee on suspension until the investigation is complete and find someone you trust to put the pieces back together. 

How to Conduct Witness Interviews

Be sure to maintain objective and to ensure your witnesses don’t have a secret agenda behind their testimony. Ensure that you emphasize that counsel represents the company, not the individual. 

Ask open ended questions and corroborate witness statements with documents for further proof. Offer the implicated employees an opportunity to give their opinion on the evidence and to offer their side of the story to maintain fairness.

At the end of the day, ensure all parties are treated fairly and with respect throughout the entire process. 

Documents to Review

There are key documents you should be reviewing in the process of an internal investigation. Here is a list of some you should be bringing as evidence:

• Financial statements
• Cancelled checks and payments 
• Corporate credit card statements
• Expense reports and vendor files
• Reimbursement requests
• Time sheets
• Access logs

If you are a non-profit, there are additional things you should keep an eye out for. Ensure that the activities were aligned with the restrictions regarding funds and donor information as well as the duty of care required.

How to Disclose to the Owner and/or Board of Directors

Ensure that you are bringing this to their attention with a solution in mind. If they were unaware of any possibility of this happening, it may come as a shock to them. Be sure to be empathetic and transparent throughout the entire conversation.

Outline the facts in a timeline based approach and present a clear plan on how to mitigate risk moving forward. Include who owns each step of the plan and the action items that are going to take place in the future.

Overall

The way an internal investigation is conducted is crucial to gain employee trust and to improve processes moving forward. Ensure that your company is up to speed with the proper proceedings of an internal investigation.