Disruptions and distractions related to the COVID-19 outbreak might have caused some executive teams and corporate legal departments to shift focus away from fraud-related risks and compliance, even as those risks are expected to ramp up over the next year. 

"Businesses are deciding when and how they can come back to work. They're taking a lot of time and energy and a certain level of creativity to figure out how to do that. And so it's really easy to begin to ignore the basics around compliance," said Don Fancher, an Atlanta-based principal at Deloitte and the U.S. national and global leader for the firm's forensic advisory services. 

A new Deloitte survey of more than 1,200 executives, many of whom are members of the C-suite, showed that more than half of respondents expect fraud, waste and abuse schemes to increase in the next year. Nearly 40% believed that improper payments would be the most common fraud risk associated with $2.2 trillion in government stimulus funding. 

"Any payment outside of the normal course, whether it be fraudulent or just waste or abuse of the system, is a form of improper payment," Fancher said. 

A recent example of improper payments would be fly-by-night companies that promised to provide N95 masks to health care providers, but only after receiving up-front payments, according to Fancher. 

"They get paid and all of a sudden that distributor is gone and hundreds of thousands or millions of dollars that was to be used for PPE [personal protective equipment] is gone," he said. 

As the fraud risks increase, in-house leaders and other executives need to be more vigilant than ever about making compliance and risk management top priority. They need to set a policy tone from the top by educating employees and vendors—even if doing so requires virtual training—about compliance, risk and financial crime prevention. 

"You need to be continuing to put the right protocols in place," Fancher said. "It's also realizing that those protocols might need to be a bit different because everyone's working from home. The normal process of controls where everyone's in an office environment are no longer as applicable." 

Legal departments also can turn to fraud monitoring technology and analytics tools to prepare for what lies ahead—and to help ensure that their compliance programs meet new Justice Department guidelines issued in June. 

"They actually state the expectation that organizations have the resources in place to actively and continuously monitor for fraud, financial crime, bribery and corruption," Fancher said. He noted that in-house leaders should be asking, "How do we put in continuous monitoring around our transactions, overlaying those across our financial and enterprise systems?"

"If an organization hasn't considered that, now is a good time to consider putting those programs in place," he added.

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