Many employees are unaware that fraud is taking place in their workplace, even though it has been happening, perhaps for a long time. That is why it is so important to know how to recognize the signs of potential fraud.
After all, employees do have rights as whistleblowers to report things like Medicare fraud, Medicaid fraud, federal grant fraud, government contract fraud and much more. But the first step is to recognize when it is happening.
Sudden financial changes
One thing to look for is when there is a sudden and unexplainable financial change. Perhaps the business has a surge in revenue at the end of the year, for example. Did they suddenly make more sales, disproportionately to the rest of the year, or did an executive engage in fraud to inflate the numbers?
Delayed financial reports
In some cases, financial reports may be delayed, perhaps because the fraud itself is being covered up. It takes time to alter the books. If financial reports are supposed to come out but are delayed by months, it could be a red flag.
No internal controls
Another issue is when there are no internal controls within the business, such as checks and balances between multiple individuals. If one person has the power to release financial reports without input from anyone else, for example, that puts them in an opportunistic position. They may be able to use that power to commit fraud and then alter the books in an effort to hide it.
As an employee, if you believe fraud has been occurring at your workplace, it is crucial that you know what legal steps you can take as a whistleblower.