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Accident Compensation Corporation
Investigation Capability Reviews
28 November 2013
They will build a good profile and will be perceived as fulfilling an important role for a mature business.
The individual will be a key participant in the recently formed Disclosure Committee at ACC that will adopt the role of an assessment panel that considers
allegations as they come in and is kept up to date with investigations that are undertaken.
Review of National Investigation Unit
In our opinion the team within the National Investigation Unit (“NIU”) has made good progress since the changes implemented after the review in 2007. In a
survey completed by 163 ACC personnel, more than 75% of the respondents said they:
• have a good or excellent understanding of the role of the NIU
• believe the Unit is responsive
• are satisfied with the NIU overall
• have had decision making supported by the NIU
The employees who provided negative commentary focused on poor turnaround times, the unit being separate from the network and staff not hearing back
when they have referred information to the NIU.
There are a variety of areas where our review of the Unit against peer agencies and counter-fraud better practice1 suggests ACC should take a different approach.
Three key issues in our opinion require attention:
Narrow focus
There is an almost exclusive focus on client (external) fraud at ACC, which has in our opinion been to the detriment to achieving prevention, deterrence and
detection outcomes with providers and levy payers. A clear and more balanced strategy, endorsed by the executive, will be required to have a better focus.
Efficiency gains made through more aggressive file screening, having intelligence support with each of the area teams and addressing the case management and
workflow needs is also very likely to allow extra work to be undertaken without impacting the client-based savings made.
To align with counter-fraud better practice1, we have recommended in this report that the NIU’s scope increases to form an ACC Integrity Service that will address
a more holistic view to countering fraud and corruption risk, focusing not just on investigations but also prevention and detection initiatives. Employee fraud and
corruption risk and the on-going commitment to the fraud and corruption risk assessment also need to be better catered for.
In our opinion there are merits to have the expanded team reside in an ACC-wide area of the business. We have suggested a move from Claims management to
Actuarial and Risk as one option to consider.
1 See centre of Outcomes Model on page 5
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NIU leadership disconnected
The Investigation Unit is, in or opinion, missing a significant opportunity internally. We observed during the review a distinct lack of engagement between the
Unit and the Executive. Feedback received suggests that this perceived disconnection may have resulted in the NIU being an invisible service line within ACC.
Our observation from comparing ACC with the peer agencies highlighted that ACC would benefit from widely communicating the units counter-fraud strategy and
the initiatives it was working on to colleagues, providers and the public to proactively publicise what the team does and why. This encourages more open
communication, increased compliance and an acceptance of the need and benefits for stakeholders when ACC to undertakes this work.
Leadership in NIU Intelligence disconnected
The centralised intelligence model the NIU uses is not customer focused. The feedback we received throughout the review was that this approach has
consistently delivered a product and service that is not meeting the needs to the customers who are the investigators in the areas. We have suggested a re-think;
possibly a move to regional Intelligence Analyst model that could see an early and sustainable improvement in investigator efficiency and customer satisfaction
levels.
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Alignment with ACC’s new Counter-Fraud Outcomes Model
2.4
A model was developed at the end of the Fraud Risk Assessment to help describe what the Corporation is aiming to protect, the approach to take, and
what the goals are. This review is intended to provide advice around the capability required to deliver on the desired outcomes in this model.
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Scope of this Review
2.5
The objective of the first phase of work was to provide a practical plan to build a sensible, cost-effective employee-focused capability that would leverage
lessons learnt elsewhere and identify areas for ACC to avoid. This work would explore the options of increasing ACC’s focus on the inevitable employee-
focused threat by capturing the views of a range of pre-approved peer entities who have established an employee-focused capability.
2.6
The objective of the second phase was to understand and comment on the extent to which the NIU has:
• an unambiguous strategy and clear objectives that align with the Corporate strategy for fraud
• a commensurate organisational structure
• the optimum capability & capacity to deliver on the strategy
• an efficient and effective set of tools and technology to complete the work
to support ACC in the achievement of its goals.
2.7
Both phases were to leverage the findings of the Gap Analysis and Fraud Risk Assessment to ensure the capability ACC has going forward is fit for purpose
and caters for the identified gaps and risks.
Limitation of this Review
2.8
The terms of this engagement and the scope of the work you asked us to undertake is different from an audit or a review engagement, and the assurances
associated with these reviews are not given. The financial and other information contained in this report have been provided by ACC’s personnel. Our
review was based on enquiries and the exercise of judgement. There is, therefore, an unavoidable risk that some issues may remain undiscovered. Our
review cannot be relied on to prevent or detect specific or actual incidents of fraud or error.
2.9
Due to the size of the NIU, we have interacted with all of the key managers and a selection of the operational team members. As such have not
interviewed all of the personnel in the Unit.
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Fieldwork
2.10 We completed the internal fraud capability phase in May and June. The review of the NIU was then completed in August and September. This involved
contact with a number of third parties who were all keen to help ACC where they could. We also spent time with members of the ACC Executive, senior
managers and ACC operational staff. Our principal ACC contacts, and project sponsors, were:
• 9(2)(a)
(Company Secretary) – sponsor and engagement oversight; and
• 9(2)(a)
(Associate Company Secretary) - assisted with the overall review and coordination of the interviews and provision of
information.
2.11 We were provided with full access to relevant financial, personnel and other operational documents. As with the Gap Analysis and Fraud Risk Assessment
work, all ACC personnel fully engaged with our enquiries and review.
2.12 At the conclusion of our fieldwork we discussed our key findings with 9(2)(a)
. We also provided ACC with a copy of our draft report on 13/9/13.
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Strategy and Objectives
3.3
A common theme for those responsible for responding to allegations that involve serious wrong doing by employees is the need to be supported by clear
messaging from the top of that organisation and through to all employees. The messaging works best when it is unambiguous and is delivered by the Chief
Executive. The messaging outlines what the organisation’s attitude is to employee ethics and integrity issues, and also covers how seriously it will take the
education, prevention, detection and response to issues that arise.
3.4
If the position is stated to be ‘zero tolerance’, it is imperative that the policy statement is backed up by action when issues arise.
3.5
In that messaging from the top, strong and positive ethics and integrity related statements are a feature. Those charged with enabling the policy are well
known across the business as being fully supported from the top and having a clear mandate to deliver on the position set by the CEO and Executive.
3.6
Operating protocols are clear and agreed – as the organisation needs to understand where responsibilities sit.
Recommendations
1.
The CEO and Executive Team should consider their position and communicate in clear ‘business as
usual’ terms what the organisation’s attitude to fraud is
2.
The Disclosure Committee is well placed to ‘operationalise’ that position.
3.
As the scope of the fraud policy is being expanded to cater for serious wrongdoing, which is a positive
step, the desires of the senior team should be clearly reflected in that document. This will include:
•
what the position is and why it is important;
•
a commitment to providing proactive education for new starters and the longest serving team
members;
•
highlighting the mechanism to report concerns; and
•
how ACC will conduct a robust and transparent investigation when issues arise.
4.
Develop a set of protocols to reinforce and clarify exactly who is responsible for what.
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Process
3.7
A common theme emerged from the interviews. What has proven successful with both private and public sector organisations is having a group that
regularly meets to oversee the proactive and reactive measures taking place by the organisation regarding its employees. A multi-disciplinary group works
the best with senior personnel representing the following areas of the business:
• Senior Manager from the business
• HR
• Legal
• Risk & Assurance
• The Investigator (who will coordinate or undertake the investigations)
3.8
This group or Committee assembles on a scheduled basis to review the proactive efforts and to be provided with updates on the investigations underway.
3.9
The group is visible and transparent to the business. Employees know of its existence and the role it performs, and as there are various skills represented,
the risk of challenging the process and the outcomes is reduced. All allegations are assessed and a conservative line is taken when deciding whether to
investigate or not. Feedback of the allegation outcomes are provided back to the business by the group to ensure continuous improvement.
3.10 The investigators who implement the strategy are focused on prevention, detection and response. In entities where allegations against employees are
regularly made, the broad split of focus tends to be 40% on prevention, 20% on detection efforts and 40% investigating allegations.
3.11
Key Prevention initiatives include:
• Developing awareness training material
• Delivering awareness sessions for new starters at induction
• Delivering awareness sessions for managers and staff at scheduled sessions
• Working with the assurance / risk managers to foster continuous improvement to the control environment
• Working very closely with HR to ensure alignment across all aspects
• Providing reporting to the business around emerging trends, key initiatives and progress on investigations
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Tools, Technology and Systems
3.14 The two banks, Inland Revenue Department (“IRD”), the Ministry of Social Development (“MSD”) and the NZ Police are in our view were the more effective
of the entities we spoke to at leveraging business as usual data to look for employee related risks. A standout common theme involves having a very good
relationship with the business data owners and their analysts. The effective Internal Investigators work hard to have ease of access to the information
together with the ability to scan the data warehouses for activity that may fit certain risk profiles. When the various business rules are triggered,
assessment and intervention where necessary can occur based on indicators in the data
3.15 The Police have developed an ‘Early Intervention’ programme which is intended to support and assist employees who may be facing personal or
professional difficulties that could escalate into a performance or misconduct issue. It is a voluntary and confidential process which involves employees
meeting ‘red flag’ business rules in the employee related data that results in an intervention.
• The data in the Police context is their ‘client’ database, PeopleSoft, tactical options data (front line decision making involving various use of force
options) and complaint data.
• The employee’s supervisor is advised of the alert that has triggered, and they have an off the record ‘Intervention’ discussion with the employee.
• While the data types and the Police context may not seem relevant to ACC, it is the principle of firstly understanding what may be indicators of an
increase in motivation and rationalisation2 for an ACC employee to do the wrong thing, and secondly receiving a proactive ‘heads up’ that an
employee who may be at risk should have the option of being spoken to.
3.16 In terms of the tools and systems successfully deployed elsewhere, the following are consistently deployed by internally focused personnel:
• Ready access to data mining capability (The combination of ACC’s Business Information and Reporting team “BIAR” and the NIU’s Intelligence
Analysts have this capability)
• Access to i2 Analyst Notebook capability to assist with detection and investigation efforts (ACC already has this tool and iBase)
• Access to pre-arranged third parties that can provide specialist computer forensic and forensic accounting resources
• Access to additional investigative resources that are able to work closely with managers in the business during what is typically a stressful time
• Video conferencing to facilitate committee meetings
• Digital dictaphone and transcribing support
• e-Learning for employees to learn about red flags and reporting concerns
2 Refer to the ‘
ACC Employee Fraud Diamond’, page 24, ACC Gap Analysis and Fraud & Corruption Risk Assessment Report
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• Email & internet usage monitoring
• A central reporting database that has strictly controlled access
3.17 The successful Integrity Investigation Manager will build repeatable awareness training that they can roll out to employees, whether they are being
delivered for new starters or experienced personnel.
Recommendations
1.
When recruiting the Integrity Investigation Manager, ensure the person has a proven ability to work
alongside people in the business such as the BIAR team, and that they have a good grasp of how
business data can be exploited in this context.
2.
Consider the merits and application of an Early Intervention type of approach in the ACC context.
Perhaps this could be one of the proactive initiatives for the new Integrity Investigation Manager to
explore.
3.
Equally, the successful Integrity Investigation Manager will reference the above tools and systems list to
identify any gaps in the ACC toolkit.
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Structure
3.18 Where the responsibility for employee focused prevention detection and response efforts is pushed down too far in an organisation, the peer agencies
have found from their experience the effectiveness reduces considerably. The other common observation is to encourage an independent perception of
the role, the placement within the organisation in an area that has a business-wide view such as risk, assurance, legal or if there is one, the Office of the
Chief Executive.
3.19 The ratio of employee-fraud focused investigators to total employees hovers around one FTE per 1,000 to 2,000 employees.
3.20 Investigators focused on employee fraud are often part of a broader investigation team, physically working alongside their fellow investigators focused on
external threats. When working well, the employee-fraud focused investigator’s proactive prevention efforts are highly visible to their fellow investigators.
Equally there is typically some form of a ‘Chinese wall3’ element where the employee focused detection and investigation work has additional security and
sensitivity applied. This approach also applies when Intelligence Analysts from the broader team are called on to help the employee-fraud focused
investigator make sense of the data mining efforts.
3.21 As mentioned in the previous section, where additional resource is required, using third party specialist investigation resources can be preferable to avoid
the awkwardness that can be experienced by the organisation’s investigators focused on external threats. As they rely heavily on front line employees to
contribute information on third party threats, a barrier can emerge if they are perceived as the same people who investigate their colleagues.
Recommendations
1.
If the recommendation to have a manager of a broader scoped ‘Integrity Services’ is adopted (see later
sections), incorporating internal and external threats and the fraud risk assessment work, the leader of
that function would be at an appropriate level within organisation (3rd tier reporting in to a member of the
Executive team). The Integrity Investigation Manager would report in to that manager.
2.
Create one FTE Integrity Investigation Manager position, incorporated within Integrity Services.
3.
While ACC has a substantial team focused on external threats, feedback from the peer agencies, ACC
managers and NIU staff suggests it may be unwise to deploy the external-threat focused investigators to
investigate employees.
3 A Chinese wall is an information barrier implemented within an organisation to prevent exchanges of information that could cause conflicts of interest. (www.wikipedia com 2013)
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People
3.22 The profile of the individuals who have had more success as employee focused managers became quite clear from the peer agencies and is consistent with
our own observations. The entities have reflected that the type of work that is carried out demands a specific type of individual. The effective examples
possess these qualities. They tend to be :
• Extremely good communicators and ‘business friendly’. They are not perceived as a stereotypical ‘policeman’ who may be focused on a
prosecution.
• Comfortable interacting with senior managers who may, when such allegations surface, be subject to significant stress.
• Very strong relationship builders that are very closely aligned with senior HR personnel.
• Experienced at conducting very sensitive employee focused investigations, ideally with some experience in a commercial environment.
• Strong investigation background with very strong interviewing skills.
• Preferably CIB (or equivalent) trained and qualified to provide comfort regarding the integrity of the investigation and where required the
prosecution process.
• Experience in exploiting technology to detect and respond to employee related issues.
• Has an established network with peer agencies.
Recommendations
1.
ACC should consider establishing a new Integrity Investigation Manager position.
2.
The critical success factor will be the profile of the person. Taking in to account the points outlined
above, ACC should carefully seek out a business friendly senior investigator who has experience
investigating sensitive matters and has a proven ability to adopt the role of trusted business adviser,
very familiar in taking a holistic view to employee integrity related issues.
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Alignment
3.23 To be effective, the review concluded that employee focused investigators require very strongly alignment and relationships with the organisations HR
function. Some organisations have a dedicated HR team member assigned to the integrity function.
3.24 Senior and operational managers should expect the Investigator to be:
• Culturally aligned with the business. This applies to the overt and discrete initiatives undertaken
• Absolutely aligned with the CEO’s position on employee integrity related issues
• Very aware of business processes and priorities
• Sensitive to business owners needs to have a well-balanced, transparent process around their employees
3.25 The investigators are well connected with peers working within other agencies in the private and public sectors. The effective investigators are viewed as
being at ‘the front of the pack’.
Recommendations
1.
Consistent with earlier comments, we cannot over-emphasise the need for the integrity Investigation
Manager to be very closely aligned with ACC’s HR team.
2.
ACC should have an objective to have the Integrity investigation Manager (over time) viewed internally
and externally as a very professional adviser that provides a very high quality service, adding value to
the trust and confidence in the brand.
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4.6
We then analysed the results to understand the percentage of positive and negative responses by geographic area. While there are subtle differences by
area, overall the ACC customer ratings are high:
Understanding
Responsiveness
Northern
Northern
Central
Central
Southern
Southern
0%
20%
40%
60%
80%
100%
0%
20%
40%
60%
80%
100%
Positive
Negative
Positive
Negative
Satisfaction
Assisting in decision making
Northern
Northern
Central
Central
Southern
Southern
0%
20%
40%
60%
80%
100%
0%
20%
40%
60%
80%
100%
Positive
Negative
Positive
Negative
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4.7
A large number of respondents provided us with multiple comments. To preserve their privacy we have elected to not add that detailed feedback to this
report. Some general themes that emerged were:
• Front line staff are more satisfied when they have investigators in the branch.
• Sharing a branch with an investigator has a direct correlation to integration between the Branch and Unit and increases perception and
responsiveness.
• Responding to colleagues in a timely fashion is clearly an issue for many. Several have never heard back after sending information in to the NIU.
• The quality of the experience varies depending on the investigator interacted with.
• The Case Managers like surveillance.
• Providing education to Case Managers and Branch Staff is desired, covering what to look out for and what to do with the information.
• Investigators should provide feedback when a file they referred to the Unit is closed and why.
• A weekly/monthly newsletter on the intranet about emerging trends would be really helpful.
• Supply training to network staff regarding conflict resolution and other skills may be found in the Unit
• The Case Managers would like to see Investigator’s KPI’s align with their own. Having visibility over the NIU’s timeliness expectations of
investigators would help avoid the feeling referrals can sit indefinitely.
4.8
We also produced a view of the words that the ACC employees used in their feedback. The words are displayed those words in accordance with their
frequency below. The darker and larger the word, the greater the frequency in the survey responses. Please note this is based on a simple word count
rather than providing an interpretation of positive or negative bias. The frequency of the more prominent words seems consistent with the observations
made above.
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Feedback from Senior Managers
4.9
We also spoke with a small number of ACC senior managers to receive direct their feedback. We combined this with feedback that was informally
collected during the Gap Analysis and Fraud Risk Assessment phase of this work (Refer Appendix B of this report and Appendix B of the related Gap Analysis
and Fraud Risk Assessment Report).
4.10 The feedback from the managers was that they value the function that the NIU performs. Key themes and suggestions around how the service could be
improved emerged from those conversations:
• The Team has very low visibility within the Corporation, they seem to answer to themselves.
• Lack of alignment between network key performance indicators (“KPI”) and NIU KPI’s.
• Need snappy reports to highlight activity and produce ‘Emerging trends’ via one pagers for the network personnel.
• Need to be better at closing the loop on information disappearing into the NIU.
• Need faster turnaround times.
• More hands on awareness training for network personnel.
• Case Managers work hard to build rapport with Clients, even more so in recent times. It is important the NIU personnel approach things in a
consistent manner.
• Carefully select the matters that surveillance efforts are applied to. Surveillance is a great tool when used well.
• It is helpful when the investigators encourage informal discussions with network personnel, and shouldn’t always require a formal approach – at
least initially.
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Feedback from Crown Prosecutors
4.11 We spoke with representatives from the Crown Prosecutors at the three main centres, Auckland, Wellington and Christchurch. The key themes that
emerged from those conversations were:
• The Prosecutors have good relationships with the investigators.
• There is an opportunity for ACC to fill a gap by putting together a clear prosecution and recovery strategy which the three offices are keen to help
with. This would outline what the objectives and priorities are and how ACC would like their prosecutors to implement that strategy. The
prosecutors would like to have goals to work towards that align with the NIU and wider ACC strategy;
• The quality of files the prosecutor receives are, generally, very good, especially when compared with other peer government agencies. Having ex-
CIB personnel has helped. File quality can vary depending on the investigation staff that has been involved prior to it arriving at the Crown. On
occasion, a file that has presumably made it through the Investigation Unit checking process can still require a lot of work. This though is the
exception.
• The Auckland Area received special mention due to a noticeable and marked improvement in their prosecution file quality over the last 5 years;
• If consistency in the service received by ACC in the provincial areas is variable, ACC may see value in adopting a more centralised crown prosecution
provider model, with Auckland, Wellington and Christchurch firms providing all of the support, increasing consistency. The prosecutors understand
the additional travel costs during trial will need to be weighed up with the benefits in that assessment.
• There is a risk that files that sit for an extended period before being investigated and then taking an extended period to investigate run the risk of a
stay of proceeding application made by the clients counsel. The investigators need to keep a close eye on ageing files.
• ACC could achieve greater financial returns and realise a higher degree of deterrent effect by pursuing civil recoveries when there are assets to
recover.
• There appears to be an opportunity to prosecute more providers but any decision to pursue needs to be made in line with the strategy as outlined
above.
• The Prosecutors see value in conducting a targeted ‘blitz’ on at risk areas.
• The Prosecutors are keen to provide training on the application of new legislation.
• The Prosecutors can provide coaching and advice to case managers involved in review meetings which the network personnel can find stressful.
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4.13 We later interviewed some NIU team members in ‘one on one’ settings. The key positive themes were:
• The team members are very passionate about the importance of their work
• The Investigators and Intelligence Analysts have a strong desire to provide a good product or service
• The recent awareness sessions run across the branches were very positive for the network staff and the NIU team.
4.14 The most significant negative aspects that came through in those conversations were:
Disconnected at the top
• The observation made was that Investigation Unit is missing a significant opportunity internally as there is a distinct lack of engagement between
the Unit and the Executive.
• This issue is thought to have emerged from a desire by the Unit to be an invisible service line within ACC. This position is in stark contrast to the
pre-2007 report era where the Investigation Unit (as it was then) had a high profile (for what we understand were the wrong reasons) perceived at
that time to be causing negative perception issues for ACC.
• There is therefore a lack of connection between the activities the Unit performs and the strategy of ACC and the Executive. The team perceive in
absence of that connection and an aligned strategy, the Unit creates its own priorities and work plans in isolation of the business.
Success criteria and a lack of focus on providers and levy payers
• The team are almost entirely focused on investigating claimant (external) fraud. This is due to the requirement to ensure clients receive the correct
entitlements. .
• Provider investigations are avoided as they are time consuming and involve expensive prosecutions – often for a very small value defrauded from
the scheme. Levy payers are another area where, with an increased level of analysis and scrutiny, a greater level of assurance could be achieved
around the accuracy of levies being applied to the scheme.
Leadership in the NIU Intelligence
• The Intelligence function has been consistently producing product that, on 90% of occasions, is not what the Investigators require. The staple
product is in depth profiles on individual which can take several weeks to produce, during which time an investigation progresses.
• The feedback provided to the Manager Intelligence for several years has not resulted in a change to the service provided.
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• The Analysts are adhering to the instruction of their manager. The investigators perceive the cause of this issue is a lack of appreciation by the
Manager Intelligence of who the customer is and providing a service the customer wants. The position taken appears to be instructing the analysts
to produce what is considered correct rather than providing what the customers’ desire.
• This long term gap has resulted in Administrative Support personnel in the regions producing Intelligence product for their teams, effectively
bypassing what the Intelligence Analysts spend a lot of time and effort producing. When detailed profiles are needed, what is produced by the
Intelligence Analysts is very helpful. Providing more instances of a trimmed down product would be of more benefit on the majority of occasions.
• Tools such as the geospatial capability, purchased to add value to the intelligence product, is currently under-utilised and could be helpful to other
parts of the business. The perception raised by some staff was there is desire among some in the NIU that they would prefer to keep those
specialist capabilities within the Unit.
Case Management and workflow
• The introduction of a robust Case Management and workflow tool will remove a large amount of low value duplicated effort and reduce the risk of
privacy breaches with spreadsheet and email workarounds in place.
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Peer Agencies
4.15 Having built up a good understanding of relative strengths and areas of improvement, we interviewed key personnel from a number of other agencies in
New Zealand, Australia and the United Kingdom to get a sense of how they are approaching external investigations (The interviewees are outlined in
Appendix B).
Large Bank
4.16 These conversations reinforced various aspects of the good progress made by the Unit, such as:
• the skillset of the investigators
• having access to a team of Intelligence Analysts
• achieving a high conviction rate
• with the exception of the workflow case management needs, having an excellent suite of investigative and analytical tools
4.17 There are many areas that are working well and do not require any change. For these we have not assigned much commentary as they are going well,
rather we have focused on the advice provided by the other agencies that may help to address any gaps and improve the NIU.
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4.23 In relation to staying engaged with ACC colleagues, The Transport Accident Commission (“TAC”) has developed an e-Learning fraud module that their client
facing staff completes. They have achieved a 95% completion rate by their colleagues which has proven to be a very effective way of educating and staying
connected to the TAC’s investigators key customer group.
4.24 Peers provide a wide variety of educational material to external stakeholders via their websites, attending industry meetings and through in person training
and e-Learning.
4.25 The peers suggest ACC get really close to provider groups and an effective mechanism can be through participating in industry gatherings such as
scheduled meetings and seminars. This responsibility can be shared by Investigators. When provider investigations or themes arise, ACC should be
proactive in approaching the industry groups to share the insight and encourage them to communicate to their members. This encourages information
being supplied about other activity by providers and should have a deterrent effect.
4.26 To help build relationships internally, peers who run similar teams strongly encourage the holding of informal meetings over a coffee with members of the
Executive.
The lack of focus on providers and levy payers
4.27 The NIU focuses team effort almost exclusively on client fraud. The key driver of this is due to an understandable expectation to achieve savings for the
scheme by removing people defrauding the scheme through intervention. The savings are calculated using an actuarial method. We note that peers in the
private and public sector also use this method.
4.28 Agencies such as WorkSafe and NHS Protect recognise the need to also address provider and levy payer fraud risks. We note this concern is shared by NIU
personnel and managers we spoke to across ACC. The Crown Prosecutors also mentioned the lack of focus on Providers.
4.29 The peers have suggested that while having the requirement to achieve client related savings is very important, the strategy and activities of the NIU
should also reflect the need to assign some priority to providers, and to a lesser degree levy payers. TAC has a very approximate 60/40 split between client
and provider focus, and WorkSafe have a ~80/20 split between client and provider focus. The focus on levy payers is a minor component of their provider
percentage.
4.30 When adding a focus on providers, the peers think ACC should consider the important deterrent effect of prosecuting providers, and monetary value of the
fraud is a minor consideration when deciding whether to pursue an investigation and if the evidence supports it, prosecution.
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Investigation process
4.31 The NIU’s current approach, where investigators hold 25 to 40 files each, is in our opinion inefficient. The view of peer agencies is each investigator should
have no more than 10 investigations, and much less if they are holding complex cases.
4.32 The organisation receives approximately 1,400 allegations per annum from the public and internal sources. Around 12% are removed from the scheme or
have their entitlement decreased, and around 1% make it through to prosecution. The NIU recognises a large proportion of the 1,400 allegations spend
too long in the investigation process, consuming effort, before a decision is made to remove them from the process.
4.33 Other agencies complete more vigorous triage assessment of the complaints when they arrive. Some use weighted scoring tools to assist with this process.
The common objective is to only provide investigators with files that are likely to proceed through to a desired and tangible outcome. This does not
necessarily mean pursuing a prosecution, as the cessation of weekly payments to a person defrauding the scheme is also a fantastic result.
4.34 Other agencies have frequent status reviews across their file load, frequently applying a rigorous assessment of whether the matter still warrants the
investigators effort.
4.35 We understand the NIU has started improving this approach. Reinforcing the need for change is the age of the file load and recent case load data indicates
there is an issue:
145 open investigations from 2009
38 open investigations from 2010
70 open investigations from 2011
211 open investigations from 2012
276 open investigations from 2013
4.36 Like all of the agencies including ACC, IRD recognise they can’t investigate all matters and evaluate their allegations based on the following criteria:
• Importance
• Deterrence
• Materiality
• Public interest
• Social impact
4.37 The peer agencies have consistently suggested a maximum time frame for client related enquiries is 6 months. This excludes prosecution files. The
maximum investigation period for a provider is 12 months. Peers have experienced negative publicity when individuals have been investigated for
extended periods and the passing of time also presents practical challenges such as witnesses not being able to recall historical events.
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Intelligence support
4.41 Peer agencies have stated that producing an intelligence product that is not used by the investigators is an expensive waste of effort and resources.
Intelligence is key but it has to be focused and what the investigators need to effectively carry out their job.
4.42 One agency said that the intelligence team need to understand the expectations of their customer and they must provide what the customers want
without pushing their own agendas. We note that due to slow turnaround times for the in-depth profiles currently produced, NIU administrators have
been asked by investigators to produce a trimmed down version, satisfying the investigators needs.
4.43 The agencies consistently recommend that Intelligence Analysts should ideally be physically close to the investigative team as this results in efficient
provision of the service the customer wants. A common failing experienced by the peer agencies was also noted that some intelligence professionals
gravitate to the production of more challenging, in-depth but time consuming strategic intelligence product, often to the detriment of the production of
greater quantities of tactical product.
4.44 To ensure consistency when analysts are geographically dispersed, ACC should consider maintaining some form of centralised quality control, peer review,
and coordination function.
Case Management and workflow
4.45 The agencies all have different case management systems, and we have not been exposed to any that come highly recommended by the peer agencies.
4.46 NHS Protect originally purchased an ‘off the shelf’ package for a reasonable cost, and then experienced significant unplanned increases in expenditure
when they required post implementation modifications to be carried out. They ended up disposing of that system and had two consultants customise a
ground up tool which they are pleased with. The key piece of advice is having multiple investigators involved in the selection, design and testing process.
4.47 The absence of a case management and workflow tool swill result in NIU managers and personnel wasting effort.
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Structure
4.48 This review was also asked to assess the extent to which ACC has a commensurate organisational structure to meet the requirements of a fraud or
investigation capability.
4.49 After the review in 2007, the Unit was moved to reside in claims and the following structure was adopted. Broadly speaking, the structure underwent
some minor changes in 2010, and still reflects the Area investigation team model with a centrally located intelligence and support capability.
Proposed structure in the 2007 report
Investigation Unit Structure Review
4.50 The NIU review has identified a number of positive aspects and a number of barriers to the team being more successful than it operates today. Some of
these pressure points could be attributable to the structure of the unit.
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Appendix C – Offshore Peer Agency Contacts
9(2)(a)
Managing Director
NHS Protect
9(2)(a)
London, 9(2)(a)
Tel: (+44) 9(2)(a)
9(2)(a)
www.nhsbsa.nhs.uk/Protect.aspx
9(2)(a)
Manager, Investigations
Enforcement Group
WorkSafe
9(2)(a)
Melbourne9(2)(a)
Tel (+61) 9(2)(a)
Fax (+61) 9(2)(a)
Mob (+61) 9(2)(a)
9(2)(a)
www.worksafe.vic.gov.au
9(2)(a)
(has established a connection with the NIU already)
Manager Investigations
Forensics Group
Transport Accident Commission
Direct (+61) 9(2)(a)
Fax (+61) 9(2)(a)
9(2)(a)
www.tac.vic.gov.au
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