Thank you very much for the latitude your question allows, sir.
As I've mentioned, one of the most effective deterrents is a reporting mechanism, a whistleblower hotline.
Now, one of the things we have to realize is that when a fraudster considers whether he's going to commit a wrongful act, he considers very carefully the possibility that he or she may get caught, and the greater the possibility that the person will get caught, the less the chance that they're going to do what they had intended to do. I've already referred you to the fact that most of the cases where fraud was investigated and found were brought to the attention of the agency by means of tips. This is on slide 27. We know that having a whistleblower hotline can be a very effective way of reducing losses.
I would direct your attention at this point to slide 29 in your bundle. We see that where there are hotlines available, the percentage of cases of fraud that are initially detected by tips is 47%, nearly half, whereas if there's no employee reporting mechanism or external reporting mechanism, only abut 34% of the fraud cases get reported by tips at first instance. So having the hotline in place raises the pavement considerably.
If we take a look at slide 30, we see that hotlines also have an effect on median fraud losses. In organizations that have a hotline, the median fraud loss is just a little over $90,000 for a typical fraud case. In institutions where there is no hotline, the median fraud loss per case was $197,000 and change. So having a hotline in place reduces your loss, and it also shortens the duration of an ongoing fraud.
If you take a look at the following slide, you'll see that in organizations that had a hotline, their experience was that a fraud would go undetected for about 18 months. In the case of organizations that had no hotline, a fraud would go undetected typically for two years.
So having a mechanism in place is important, and the mechanism should probably be a phone line so that you have the human interaction, because this is important in this type of situation. It should be supported by a trained investigative staff, by a good research and intelligence function, and by an appropriate case-management process.
In addition, the existence of the mechanism should be supported by, first of all, employee awareness, so employees know what conduct is acceptable, what conduct isn't acceptable, and how to report it. And finally, there has to be a mechanism in place to ensure that any reprisal taken against an employee for blowing the whistle in good faith is going to meet with strong and fast punishment to make sure that employees will feel reasonably comfortable in blowing the whistle and doing the right thing for the people of Canada.