How to Conduct an Internal Investigation

Internal Audit Team Lead – Timothy E. Allen | Former Special Agent (U.S. Secret Service & DOJ-OIG)

Internal investigations are an essential, and sometimes legally required, step for corporations to take in some circumstances. The exact process for conducting an internal investigation will depend on several factors, such as what event has triggered the need for the investigation and the type of information that needs to be found. However, most internal investigations flow through these seven general stages:

1. Take temporary precautions to prevent further violations
2. Choose an investigator that meets your needs
3. Plan the investigation
4. Execute the investigation by gathering information and conducting interviews
5. Make a formal recommendation to relevant corporate stakeholders and other parties
6. Close the investigation
7. Draft a written investigation summary

The professionals at Corporate Investigation Consulting have guided numerous companies through this process in the past, helping them adopt the best practices for their particular corporate investigation.

Put our highly experienced team on your side

Roger Bach

Former Special Agent (OIG)

Timothy E. Allen

Former Senior Special Agent U.S. Secret Service

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Maura Kelley

Former Special Agent (FBI)

Ray Yuen

Former Supervisory Special Agent (FBI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Marquis D. Pickett

Special Agent U.S. Secret Service (ret.)

1. Take Temporary Corrective Action

The first step in many internal investigations – particularly those that are triggered by allegations of misconduct in the workplace or corporate wrongdoing – is to take temporary corrective action. This step is essential for ensuring that the conduct at issue stops and does not get worse. It can also insulate the corporation from claims of negligence for allowing the misconduct to continue even after it was brought to the company’s attention.

Importantly, though, the corrective action cannot be seen as punitive in any way. When the allegations are just that – mere allegations – and there is not much support for them yet, then it would be unfair to punish those accused of wrongdoing.

Stopping the behavior without punishing it is a fine line to walk. Some examples of appropriate corrective actions are:

• Paid administrative leave for a worker accused of workplace harassment
• Transferring a worker who claims to be in a hostile working environment or giving them paid time off
• Shifting job responsibilities out of the hands of someone who is being accused of abusing their role or committing fraud

Unfortunately, corrective actions like these are frequently criticized by both the accusers and the parties being accused and those who support them. The accusers often claim that nothing is being done, demanding that their word be accepted as the truth with no need for questioning it. The accused often argue that they are being set up or retaliated against for something else that they did, or may even claim that the allegations are themselves discriminatory.

2. Choose the Right Investigator

After taking an appropriate and immediate corrective action, the next step is to find the right internal investigator for your needs. At the very least, internal investigators should have the following traits and qualities:

• They cannot have a stake or an interest in the outcome
• They must be unbiased
• They need to have a strong attention to detail, as the evidence-gathering phase of an internal investigation has to be meticulous
• They need strong interpersonal skills, particularly if the investigation is going to involve interviewing lots of people or if the allegation is sensitive in nature
• They should have prior experience as an investigator, as this will help them determine issues of credibility and give them the tools they need to see when someone is not being truthful

This is often why corporations hire outside consultants to conduct internal investigations. Conducting audits and investigations is a profession. The people in that profession have built up a skillset that is unlike any other. Additionally, investigators who are not a part of the corporation are far more likely to approach the project at arm’s length and without a conflict of interest that could skew the results.

3. Plan the Internal Investigation

All good internal investigations have an extensive planning stage. This is when investigators:

• Determine the goal of the investigation
• Isolate the information that they need to find in order to attain that goal
• Figure out where they are going to find that information
• Create a list of people to interview and documents to obtain
• Determine how they are going to obtain and retain that information
• Craft a list of interview questions to ask
• Decide how to conduct the interviews in the way that is most likely to bring out the information sought after by the investigation

Especially when the internal investigation is being conducted by experienced professionals, the planning stage is thorough, detailed, and has contingency plans for foreseeable obstacles and surprises. Additionally, the sequence of the interviews and the questions asked during them will be designed to draw out as much information as possible.

4. Gather Information

Once the plan is set, the next step is to put it into motion.

This is where professional, but inexperienced investigators often have the most trouble. Even the best laid plans face unforeseen difficulties once they are implemented. Investigators who have not conducted numerous internal audits and inspections before can become frazzled. Experienced investigators, on the other hand, are better able to see the problems before they occur and plan for them. They can also come up with creative ways to handle issues that they did not see coming so they stay on schedule and keep the investigation running smoothly.

5. Make a Formal Recommendation

Based on the information that has been gathered, the next step in the internal investigation is for the investigator to make a formal recommendation. This is the most important, and often the most difficult, part of the process. In many cases, information that has been gathered in interviews contradicts evidence that has been provided in other interviews or in documentary evidence. A key part of being a good investigator is being able to tell who is lying and who is telling the truth.

Lots of internal investigations do not conclusively determine what happened, or fail to authoritatively answer the question that triggered the inspection. Good internal investigators who recognize, in spite of all of their efforts, that there is still some uncertainty as to what happened will acknowledge that fact when informing stakeholders or corporate decision makers.

6. Close the Investigation

After making the formal recommendation, the internal investigation can be closed. This means notifying the relevant parties of the outcome of the investigation and implementing any corrective actions that the corporation has decided to take. It also often means informing all parties involved in the investigation, including people who were interviewed, that they have to keep the process and its outcome confidential.

In many cases, particularly when the investigation concerned an allegation of workplace discrimination or harassment and the outcome of the investigation found no wrongdoing, the closing stage can be extremely sensitive. The complainant needs to be assured that their claim was heard and fully investigated, but that it had nevertheless been found to be unsupported by the facts. This can be very tricky to do in a way that does not expose the company to legal liability or reputational harm.

7. Write the Investigation Summary

Finally, the outcome of the investigation needs to be memorialized in writing. This summary needs to be thorough, but also clear and concise. It should include:

• A description of the allegations or event that triggered the investigation
• The parties involved and a list of people who were interviewed
• The important factual findings, often with a timeline of the events that took place
• A statement as to whether someone’s credibility was in doubt, and why
• Whether there were any factual circumstances that were still in question after the investigation
• The final recommendation offered by the investigators
• What corrective actions were taken by the corporation

Frequently Asked Questions About Corporate Investigation Consulting and Internal Investigations

The Internal Investigation Team at Corporate Investigation Consulting

Our team at Corporate Investigation Consulting is composed of former federal agents and investigators from a wide variety of powerful agencies, including the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS). With 100 years of combined experience between our investigators, we can help you conduct an internal investigation into your company in a way that brings the truth to light so your corporation can take the appropriate action.

Contact us online or call us at (866) 352-9324 to get started.