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Bill 4, the Public Interest Disclosure Act (also known as the Whistleblower Protection Act) is set to be legislated in late spring of this year. Whistleblower protection already exists on a federal level under the Criminal Code but Bill 4 is the first of its kind to specifically speak to Alberta’s public sector.
The focus of the Act is the protection of whistleblowers from any kind of reprisal—personal or professional—as a result of their actions. Whistleblower protection is meant to encourage individuals to speak out if they witness any misconduct that has to do with taxpayer dollars, public health and safety or violations of the law.
The Act also announced the creation of a Office of the Public Interest Commissioner who will serve as an independent officer reporting to Legislature. In addition to being tasked with ensuring the mandate of the Act is maintained, the Commissioner is someone non-employees and members of the public can go to in order to file complaints while still being covered under whistleblower protection.
When we look at the numbers, it is more than a little disheartening to see what a prime target our public institutions have been for fraud. According to the Report to Nations on Occupational Fraud and Abuse – 2012 Global Fraud Study, the industries most commonly victimized by occupational fraud were banking and financial services, manufacturing, and government and public administration. Typically, organizations lose five percent of their revenue every year. According to the latest 2012 Canadian statistics, 17 percent of organizations in the not-for-profit and government sector were the victims of fraudulent schemes, with the amount of average losses falling between $80,000 and $100,000.
These figures are hard to swallow in the private sector. But when taxpayers hear about the public sector and their tax dollars falling prey to these losses, the response becomes a battle cry for action and increased accountability. And, at the end of the day, Alberta’s new legislation is the first step in ensuring that happens.
While the Act focuses on protecting whistleblowers, its underlying purpose, in my opinion, is to put the onus on the government that when complaints are made, there is an action and a response.
From an organization’s standpoint, public sector groups and ancillary organizations will have to develop (or evolve) their own whistleblower policies to reflect the protections required in the Act. For many organizations, this will have to mean establishing whistleblower hotlines.
Statistics have shown that occupational fraud is more likely to be detected by tip than by any other method . And the number is growing, from 40.2 percent of occupational fraud detected by tip in 2010 to 43 percent in 2012. But, in light of this new whistleblower protection legislation, the added benefits of a hotline can be boiled down to four points:
They allow for anonymous reporting
They are 100% confidential
They are available 24 hours a day, 365 days a year
A third-party is involved in the review and tracking of complaints
People will always be hesitant to speak out, especially when they fear they will be recorded and identified. And while the new legislation protects them from reprisal, that alone is unlikely to be reassuring enough. Having a third-party managed hotline is the best way to assure people that they will not be identified against their will and that their complaint will not go unheard.
From the organization’s perspective, that third-party credibility increases transparency—internally and with their public stakeholders—that a system is in place to receive and track complaints, and to prove that action was taken when those complaints were reported.
For employees and members of the public, we now have increased recourse when we feel our complaints are not being addressed. Every issue raised is done so on the record.
How our public institutions rise to the challenge of meeting expectations set out by this new legislation will not only change the way they do business; it will fundamentally change the way we—as employees and citizens—feel free to interact with our institutions. They have to take the first step and put a whistleblower process in place. We should reward institutions for setting up these hotlines by doing our own due diligence and speaking out when something isn’t right.
1 According to the Report to Nations on Occupational Fraud and Abuse – 2012 Global Fraud Study.
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