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Administrative Investigations:A Hands-On-How-To

Gordon Leek, CD, BPA, SPAC

Administrative Investigations:A Hands-On-How-to.

• What is an Administrative Investigation (AI) • Why Conduct an AI • Stages of an AI • Principles of conducting an AI • Terms of References (TORs) • Investigation Plan

What is an Administrative Investigation?

A thorough examination of the facts, situation and factors that have resulted

in a particular situation May be initiated for any reason

Impartial and neutral • Is not to assign blame

Why Conduct an Administrative Investigation?

Why not do an AI?

• Cost

• Unknown what might be discovered

• Adverse publicity

• Manager responsibility

Why not do an AI

• Stress on employees

• Create evidence or situation that can be used against the organization

• Reputation

Why Conduct an AI

• Improve factual basis for decision making • Develop a record to base legal decisions • Identify if employees have violated policies,

procedures or the law • Identify and prevent criminal activity • Prevent bad press or image • Avoid litigation and its associated costs

(financially and reputational)

Why Conduct an AI

• Limit your liability • Protect your reputation • Prevent any future incidents • Evaluate current policies and procedures

to determine whether they are still relevant

Case Study

• Jones had access to the office building to access equipment contained on site in order to run programs, collect data and otherwise carry out the requirements of this contract. Jones was security cleared to meet this obligation.

• Jones would often conduct his work after hours. Jones would analyse the data from the equipment either at his office on the UBC campus or at his home. In order to do this he would print out datasheets. By download ng the data onto a USB stick and print the data from a computer within the office.

• • The printing of the data was often done using the laptop computer of George. This laptop is

connected to the network through a docking station in George’s office. George has known and worked with Jones for approximately seven years. This use of George’s computer by Jones was a regular occurrence and there had been no known previous issues.

• • One time, when Jones used the USB was inserted into George’s computer the virus scan

detected a virus. Jones removed the USB stick from the computer; however the virus had already infected the network. George was contacted by IT Department and was advised of the virus. IT protocols and actions were put into effect to limit any damage.

•

Case Study

• Jones was informed that the USB stick that he used was the likely source of the virus and that it should be scanned and cleaned so that it would not infect any other computer..

• Six weeks later, George left his office for a few minutes and did not lock his computer. When he returned he found Jones in his office. Jones told him that he had used his USB stick to print some data and that the virus scan detected a virus again.

• George was again notified by IT Department that a virus was detected and introduced through his computer.

• As a result of his actions Jones was advised that he was no longer

allowed to come into the office building and was suspended until further notice.

Case Study

Denial of Service • Contracted to work and access network

• IT Policies in place and training provided

• Used purchased USB stick to download project and print at another location for work purposes

• Crashed Network twice within 6 weeks

How Would You Proceed?

• Manager

• Administrative Investigation

• Police

Stages of an AI

• Incident happens • Incident is made known • Preliminary fact finding • Decision to do an AI • Select an Investigator • Terms of Reference • Investigation Plan • Conduct the Investigation

Principles of Conducting AI

• Natural Justice – Right to be heard – Right to an impartial decision

• Doctrine of Fairness – May require reasons for a decision

Three rules of Natural Justice and Doctrine of Fairness

• Hearing Rule

• Bias Rule

• Evidence Rule

Three rules of Natural Justice and Doctrine of Fairness

• Evidence Rule – Beyond a Reasonable Doubt vs. Balance of

Probabilities

Principles of all AIs• Notice

• Impartiality

• Timeliness

• Confidentiality

• Objectivity

• Systematic (orderly/planned)

• Discretion

• Protection of Sensitive Information

Interviews

• Privacy – Cannot assure privacy under ATIP – Not privilege as with a lawyer – Not informant as with police

Interviews

Rights – Can have someone, usually Union rep present

when interviewed – Rep is not a lawyer, cannot tell person not to

cooperate or say anything – Witness is to talk, not the rep

Case Study

Theft, Fraud, Misuse of Credit Card

• Employee issued company credit card

• After 120 days had o/s balance $7353.69

• Some purchases appeared to be for personal use

How Would You Proceed?

• Administrative Investigation

• Manager

• Police

• PRELIMINARY FACT FINDING:

• Energy Horizons is an energy developer researching new sources of sustainable energy outside the conventional paths. Energy Horizons has their head office located in Winnipeg, Manitoba; with satellite offices in Calgary, Saskatoon, Thunder Bay and Moncton. They have also opened a smaller “storefront” office in San Diego and Stockholm.

• Energy Horizons employs 150 staff in their office network. These include research technicians, sales personnel, accountants, purchasing and administration. The company provides a Samsung Galaxie to all technicians, sales personnel and managerial positions. A corporate credit card is also provided for employees to make purchases up to $10,000 for travel arrangements, hospitality, etc.

• Mr. Lester Friezen was a supervisor of a body of research technicians that

is studying hydrogen cells to power offices and warehouses. Lester has been with Energy Horizon for six years. He has a family with two children, one of whom is autistic. Lester coaches for the local midget hockey team, the Moncton Clippers.

• During the month of November 2015, Energy Horizons Accounting Department discovered that the Energy Horizon credit card belonging to employee, Mr. Lester Friezen was past due at least 120 days with an outstanding balance of $7,353.69. Upon examination of the travel card statement by Finance, it was determined that the purchases made on the travel card appeared to be of a personal and fraudulent nature.

• Mr. Friezen’s manager, Mr. Quigley Farsight, became

aware of this overdue account via an email that was sent from Accounting Department to Mr. Friezen; with Mr. Farsight being copied on the email. Mr. Farsight contacted Ms. Sandy Cotton, with Energy Horizon’s Human Resources Department, who advised him to retrieve the travel card from Mr. Friezen and that someone should look into this matter.

Administrative Investigations: The How To

• Terms of Reference (TORs)

• Investigation Plan

Terms of Reference (TORs)

Authorize and govern the investigation – Clear statement of the allegation(s)

– Specific instructions

– Time Frame

– Resources Available

• Energy Horizons is an energy developer researching new sources of sustainable energy outside the conventional paths. Energy Horizons has their head office located in Winnipeg, Manitoba; with satellite offices in Calgary, Saskatoon, Thunder Bay and Moncton. They have also opened a smaller “storefront” office in San Diego and Stockholm.

• Energy Horizons employs 150 staff in their office network. These include research technicians, sales personnel, accountants, purchasing and administration. The company provides a Samsung Galaxie to all technicians, sales personnel and managerial positions. A corporate credit card is also provided for employees to make purchases up to $10,000 for travel arrangements, hospitality, etc.

• Mr. Lester Friezen was a supervisor of a body of research

technicians that is studying hydrogen cells to power offices and warehouses. Lester has been with Energy Horizon for six years. He has a family with two children, one of whom is autistic. Lester coaches for the local midget hockey team, the Moncton Clippers.

• During the month of November 2015, Energy Horizons Accounting Department discovered that the Energy Horizon credit card belonging to employee, Mr. Lester Friezen was past due at least 120 days with an outstanding balance of $7,353.69. Upon examination of the travel card statement by Finance, it was determined that the purchases made on the travel card appeared to be of a personal and fraudulent nature.

• Mr. Friezen’s manager, Mr. Quigley Farsight, became

aware of this overdue account via an email that was sent from Accounting Department to Mr. Friezen; with Mr. Farsight being copied on the email. Mr. Farsight contacted Ms. Sandy Cotton, with Energy Horizon’s Human Resources Department, who advised him to retrieve the travel card from Mr. Friezen and that someone should look into this matter.

File Number: Date:

TERMS OF REFERENCE 1. An Administrative Investigation into allegations of the unauthorized use of a company credit by Mr. Lester Friezen, Supervisor with

Energy Horizons, located in Moncton, New Brunswick. 2. The Investigator appointed for this investigation will be Mr. G.I.M. Good, Manager, IT Services, Energy Horizons. 3. The Investigator shall obtain statements from all parties and available witnesses, and shall record evidence as to:

a. Whether Mr. Friezen made personal purchases using an Energy Horizons’ credit card between 01 January to 31 December, 2015;

b. Whether Mr. Friezen violated any company policies; and c. The available security measures that could have been used to prevent the occurrence of these incidents.

4. Recommendations shall be made with respect to: a. Preventative or corrective measures; and b. Whether costs should be recovered.

5. Energy Horizons will pay all reasonable expenses incurred during the conduct of this investigation, including but not limited to: a. Travel costs to include hotel, airline travel, meals and vehicle rentals; b. Provision of Office space in Moncton; c. Provision of private interview boardroom where necessary

6. The Investigation Report should be delivered to the Manager, Research and Development for Energy Horizons by 31 July, 2016

______________________________________________ _________________________________________ D. Trump, President G.I.M. Good, Manager References:

Background

Aim

General Outline Notes

Time Restraints

Witnesses

Evidence

Subject

Logistics

Investigation Plan

Background • Company has several offices • Employees given CC - $10,000 • Subject Lester Friezen • Nov 2015, Subject CC $7353.69 past due • Company retrieved CC

Aim • Did subject misuse CC – personal? • Company policies ignored • How to prevent more

General Outline NotesTime Restraints Due: July 30, 2016

Sailing trip July 1-6 S. Cotton –holiday June 3-10, 2016 Q. Farsight – holiday Aug 5-25, 2016 Subject – holiday Jun 10-20, 2016

Witnesses Cotton - Winnipeg Farsight - Winnipeg Accounting - Calgary

Evidence Credit Card - Farsight Use of CC policy – Farsight/Cotton CC statement - Accounting

Subject Lester Friezen • Supervisor • 6 years • Lives in Moncton • Married, 2 kids, (1 autistic) • Community involvement

Logistics Transportation to Moncton Hotel, meals, vehicle Office/Interview area

Investigation Plan

The parties involved in this incident are: • Jeffery Scott has been an employee for approximately fifteen years and resides in Edmonton; • Matt Stevens has been an employee for approximately four years. He has known Jeffery Scott for

approximately 2-1/2 years and resides in Whitehorse; • Phil Branson has been an employee for approximately five years. He has known Stevens for

approximately 1-1/2 years and Scott for approximately 2 years. He resides in Whitehorse • During the week of 25 February to 3 March, Jeffery Scott was in Whitehorse to oversee a project

with Matt Stevens. On Thursday, February 28th, Stevens invited Scott to his residence for dinner and socializing. Phil Branson was also invited and arrived sometime later.

• During the evening both Scott and Stevens began drinking prior to dinner and afterwards. By Scott’s own admission he became drunk after consuming approximately three-quarters of a bottle of rum between himself and Stevens.

• According to Stevens, Scott was too drunk to go home and offered to have him sleep it off at his

residence. Scott, Stevens and Branson went upstairs to the bathroom and at this point Scott allegedly punched the frame of a closet and then made comments regarding Stevens’s wife’s breasts. A scuffle ensued and Scott then put both Stevens and Branson in a headlock. A taxi was called to take Scott back to his hotel and while outside the scuffle continued.

• At the hotel, Scott went to the casino where he gambled and continued to drink. Scott pushed a

waitress and the police were called. Scott was taken to the drunk-tank. The following morning Scott was released and given a $1000 fine.

• Scott stated that he had no memory of these events after he had gone upstairs to the bathroom

with Stevens and Branson until he woke up in the drunk-tank.

Other people involved:

• Josée St-Cyr is an advisor in Labour Relations. She was informed about this incident approximately 2:00pm on Friday, 1 April by James Patrick. St-Cyr’s role is to provide advice and guidance to management in dealing with labour relations.

• James Patrick is the Manager, manager for Mr. Scott, Mr. Stevens and Mr. Branson. She has known Stevens for approximately 1-1/2 to 2 years. She believes him to be a contentious worker and was under the impression that Stevens was friends with Scott. Stevens states that after this he is afraid to work with Scott because of this and other incidents and if he has to work with him he will likely go on stress leave and file a grievance with his Union.

• Patrick has also known Scott for approximately ten years, and has had a good working relationship with him. When she heard of this incident, it was a complete surprise to her and was out of character for Scott

• After word of the incident in Whitehorse leaked out, Jennifer Canon told her manager that she had received unwanted emails and letters from Scott as recent as two weeks ago. Canon said that she didn’t know what to do about this but they upset her and that, after hearing about what happened in Whitehorse she felt that she should tell her manager.

Administrative Investigations: The Hands On

• Terms of Reference (TORs)

• Investigation Plan

Issue Creep

• When conducting background information, Scott’s company credit card had an outstanding balance of $8300.00. Fifteen transactions were for $200 cash from an ATM at the Calgary Casino.

Addendum: Policies and Procedures

• Roles and Responsibilities

• How to report an incident

• What will be investigated

Administrative Investigations:A Hands-On-How-To

Gordon Leek, CD, BPA, SPAC