Regulatory Alert: DOJ Launches New Fraud Whistleblower Incentive Program

The DOJ’s WHIP raises the stakes for government agencies and other organizations that administer, receive, or participate in federally funded programs by creating financial incentives for individuals to report suspected fraud directly to the government. For these organizations, the implications extend beyond responding to whistleblower allegations. WHIP reinforces the importance of having an effective, integrated approach to ethics and compliance and fraud risk management that can prevent misconduct, detect potential issues early, provide trusted mechanisms for raising concerns internally, and support timely and credible investigations when allegations arise. Organizations should, therefore, consider whether their ethics and compliance programs, internal controls, monitoring capabilities, reporting mechanisms, and investigative protocols are operating effectively together to identify and address potential misconduct before it results in significant financial loss, program integrity concerns, or government enforcement. In BDO’s view, WHIP is another important reason for organizations participating in federally funded programs to move beyond compliance on paper and evaluate whether their ethics and compliance and fraud risk management capabilities are truly fit for purpose.