Episode 60: Client Inquiry, Communication, and Case Planning with Megan Brown, CPA, PI
Show Notes
On this week's episode of The Investigation Game Podcast Leah talks to Megan Brown, PI, CPA. Leah and Megan discuss all things Client related—from communication to case planning. Find out what things looked like at the beginning of Workman Forensics, and what they look like now. Leah ends the episode with easy tips to get you started on your journey to streamline or improve client communications.
This information-packed episode is the first of three conversations with Megan, and is just a sample of the content found in Leah’s new book: Data Sleuth: Using Data in Forensic Accounting Engagements and Fraud Investigations. Coming to stores April 2022. Preorder now on Amazon!
Megan is a PI and CPA. In addition to being the Forensic Accounting Manager at Workman Forensics, Megan serves on the board for Street School Inc., a local nonprofit that combines alternative education and therapeutic counseling to help Tulsa students. Read Megan’s full bio on the Workman Forensics website.
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Transcript:
Intro:
Welcome to the investigation game podcast brought to you by Workman forensics.
Leah:
Hey everyone, it's Leah. I want to tell you about a project I've been working on that I'm really excited about coming in April, 2022. The data sleuth process that we use every day when working investigations at Workman forensics is being made available in my book, Data Sleuth Using Data and Forensic Accounting, Engagements, and Fraud Investigations. In it, I share stories from my journey, including building Workman, forensics, as well as case stories. But most of all, I lay out the data sleuth process. It's all in the book. When I started Workman Forensics in 2010, I looked everywhere for a reliable process for financial investigations, but I came up short. So I decided to build one. It is possible to have a data-driven approach to financial investigations in a team environment pre-orders are available now. Check the show notes for details.
Leah:
Welcome to the investigation game podcast. I'm Leah Whietholter, CEO, and founder of Workman Forensics in Tulsa, Oklahoma. Today I have with me, Megan Brown, Megan is a CPA and a private investigator, and she's also the forensic accounting manager here at Workman. Megan has experience in both public and corporate accounting for both the private industry and public companies. After receiving a bachelor of science in accounting from Oklahoma state university, she moved to Tulsa and subsequently joined the Workman forensics team. Currently, Megan serves on the board for street school, Inc, a local nonprofit that combines alternative education and therapeutic counseling to help Tulsa students. She also volunteers as a driver for the American cancer society's road to recovery program and as a member of both the American Institute of certified public accountants and the Oklahoma society of CPAs. So thanks so much for joining me today, Megan,
Megan:
Thanks for having me.
Leah:
So today, before jumping into client, really just the client side of forensic accounting engagements, I want you to kind of identify and define the types of clients that we normally work with. And so I'll go ahead and let you do that.
Megan:
Okay. So businesses the types of clients, we usually have our embezzlement when an employee is stealing money or diverting assets through fraudulent means a partnership disputes when one of the shareholders or partners is stealing money or using diverting income for a non-business type expenses and then bank and loan fraud, which can be, you know, embezzlement from a bank. But more often than not, it's on the customer side where they've falsified an application for a loan or they're using loan proceeds for something other than what they applied for. And then on individuals, we have divorce and that could be just one of the spouses hiding money or assets from another from their partner state and trust disputes maybe a trustee is taking money or distributions are supposed to be made from the trust and they're not being made. And then there's criminal defense, which could be financial white collar fraud and synthetic marijuana and money judgements.
Leah:
I wanted to kind of in the criminal defense area distinguish between these two are kind of two broad groups that you just mentioned. So first we have this financial, you know, I think it's expected that a forensic accountant would be hired in a white collar defense or some sort of, you know, bank fraud, defense case, any time if somebody has been accused of these things, that they would hire a forensic accountant to help them with their case. And I, when I've done this before in a bank fraud, it was looking at how did the government determine their loss? And then I looked at, you know, does the evidence actually support the loss that they're calculating? So, and there's different. That's the primary use of forensic accountants in my expense with, or experience with criminal defense. But then another kind of aspect is when there are money judgements related to drug charges. And so one that was really popular. So Oklahoma now has legalized medical marijuana. So I haven't seen as many of these lately, but several years ago synthetic marijuana where people would sell it where it looks like instance. Um, and they would sell it in like convenience stores because selling incense was legal, but then they would also sell like the papers and stuff so that and kids started smoking incense and it was very deadly. And anyway, so different cases came out of this because of public being harmed. And so the government had calculated money judgements saying, okay, we think that these individuals have sold X dollars of synthetic marijuana. And so in addition to everything else, we're going to forfeit, we're also going to have this money judgment that they have to pay back. And so we looked at, you know, how were these money judgements being calculated? And then we were able to advise the attorney of that and, and, and really make sure that the money judgements were calculated on the data and information that was available. So just kind of something, I think that's not as expected especially if it's in the area of maybe a drug case or something like that. So now let's start talking about, so those are the types of clients, their businesses, individuals, and Megan, you've been with workman forensics for
Megan:
Three years.
Leah:
Three years. So you kind of saw our, like, transition into this really intentional client communication process. Since I lived through the early years of no process, I thought I would talk just a little bit about what that looked like before we had a process. And then let you talk about what it looks like now, which, you know, spoiler is like way better now. So before the client communication process, I pretty much handled all of the client intake. If somebody called, I mean, eventually pretty early on, I had somebody who would at least take a phone call or schedule an appointment for me to call somebody back. But I would take those initial calls. I would end up on these very long phone calls with potential clients. I didn't really have a way to vet the clients to see if the client, you know, did the client have a need I could actually help them with, and then this part we don't really like to talk about is could the client pay us to help them? And we don't really like that part of it, but when we're doing forensic accounting for the private sector, in order for that business, a business like Workman forensics to stay in business, we have to charge clients. It's just the way it works. So there's not some sort of, you know, there's no allocation to us from, I don't know Congress to work these cases, we have to work them, you know, and we're hired privately. So I would end up on these really long phone calls. And I would hear the whole client story case. We have a training turn case drama into a case plan. So I'd hear the whole case drama. Then I might spend 30 minutes to an hour with an individual and then realize no. And then at the end of that, I would have to tell them there was nothing I could do to help them. And that just made for a really long day for me, because that hour long phone call was keeping me from working on other clients who had become our clients, you know, and providing help to them. So it just was not the best use of my time for sure. So then we also, I would handle those calls, but then also I would work on analysis even after we had a team. Um, I would still work on some of the analysis or the review. And then I remember I would also have to communicate with the client to get more information. We had no formal case plan. I usually had an idea in my head, but I wasn't very good at translating that to the team. Um, and so I think it made for like, everything was an emergency. Do you remember? You probably remember some of those emergency days, it was like, oh, this client needs this by this time.
Leah:
And we were working on something else. So now they just told us, so now we've got to go fix this. And so it was just constantly putting out fires. There's a lot that our forensic accountant, as a consultant on a case, or as an expert on a case that we don't control, we don't, we're providing a service that we really have very little control over anything other than how we decide we're going to engage with the client. Like that's the only, and the process we use to process whatever they give us, because we don't control the data. We don't control the nature of the data, the quality of the data. We don't control what happened. We don't control court deadlines. We don't control attorneys decisions. And we don't control the finances of the client to decide whether, you know, some like whether it should be a huge engagement or whether it should be a small engagement. It was really like thinking back. And I've been having to think back a lot because of writing the book that I'm like, oh my gosh, everything was so stressful. And we're dealing with clients who are in the middle of a crisis they've been stolen from. So having that, it was just, I don't know, always a perfect storm. We always got things done, but I mean, I would like not sleep for several weeks at a time or analysts would end up working crazy hours. I think it was around three years ago, we got really, maybe longer, but we got really serious about, okay, we've got to put in a process in handling clients. So several years ago, because like from this emergency standpoint, we S we decided to really start being intentional with our client communication process in doing this. I started, we started with one of our team members, really just talking to people like she would talk, we didn't really have something as standard as we do now, but, um, she would just communicate with clients that we had in house, because there was so much information that we needed and then clients would call with additional parts of their story that they wanted to tell someone. And we just needed someone to kind of be that reposit, that go-to person that could also be the repository to like hold all of these details and, you know, and then have time to record notes and things like that while the rest of the analysis was being performed. So that's kind of where it started. So let's jump ahead. And then why don't you share with us what our client engagements look like now, because this is part of your role at Workman.
Megan:
So first off we kind of verify the ability, our ability to help the client. You know, a lot of times they write in a, to on our website kind of like spilled their case or they'll call and talk to our receptionist and she'll schedule a consultation, but right away, sometimes we'll know right away if we can help them, if they have an attorney, it or not, that can determine if we can help them. If you're, you know, a lot of times, if you're a business you don't necessarily need attorney or you might be in pre-litigation where you, you're not sure what's happening. You want to see before you maybe go file any kind of lawsuit. But if you are getting a divorce, we definitely require you to have an attorney. So if you don't, you need to go retain counsel and then retain.
Leah:
I think I would just add to that too. I think for us, a lot of times the line is really in between whether it's a business client or an individual client. And you, you mentioned that if a business wants to see what's going on, we'll typically work with them. But even if it's an estate trust or trust, dispute, a divorce, like you mentioned, or even criminal defense, all three of those are going to require some sort of civil lawsuit in order for, for what we find to really create any value in all of those types of cases for us, we, we definitely require that they have already retained an attorney,
Megan:
Right. And another example is, you know, maybe just an engagement, they're wanting something outside our expertise. A lot of people think forensic accounting means we can do computer forensics and data on the computer, which really isn't what we do. We more trace money and look at financials and big statements. So looking to see if someone's tracking your emails or your phone is not our area of expertise. And then, you know, we've had a couple of cases where maybe the case has already settled, but they're coming back and think they can do more. And really we can't help someone like that. Um, if the case has already been through the court system, it's probably,
Leah:
If they don't have access to any more information, you know, like the benefit of having an attorney involved or getting us involved earlier in the case is so that we can make sure that the right types of information are requested and whenever that's not requested. And then yeah, the court case has already been settled. So you can't go to the other side, whoever's controlling the information that is really tough because we can't, we can't just, and we'll talk about this on another episode, but we can't just like make stuff up. Right. So we have to have information to work from.
Megan:
Yeah. So that's kind of nice that clients can now, you know either call in or request a consultation and kind of go ahead and type up what, you know, what they're wanting, because that kind of gives us a heads up of whether we're going to be able to help them right off the bat. And then we, you know, once they set up the consultation we identify their concerns and we do this by sending them a client concerns, questionnaire where they kind of identify it kind of helps us identify the basics. How many bank accounts are they talking about? How many credit card statements, what kind of accounting software are they using? Do they have access to any of this stuff or is it something that's going to be neat to need to be subpoenaed? And then the, it gives the client a chance to kind of just explain what's going on, what they're seeing and what looks weird to them. Then we have the phone consultation where I kind of, it gives me an opportunity to maybe follow up on some clarifying questions I have about what they wrote in the concerns questionnaire. And then also an opportunity for them to ask me questions about what we do, how we can help them. And I go over, you know, our processes, um, and kind of the investigation process and how we can be, how we can be applicable to their case. I also go over the retainer fee, how apply that to the, we hold it till the last invoice. I talk about how, you know, it's hard to estimate a, give someone an exact price because every case is different and the data is different. So every case is going to cost a different amount, but I'll give them a typical starting price. And as you mentioned earlier, we can't do everything pro bono. So that alarm will sometimes weed out. Some people who, you know, maybe not be able to afford us or realize that they're chasing, maybe they're chasing $5,000 and it's not worth paying us more than that to chase down you know, not very much money, it's kind of a cost benefit analysis to them and then after that, I also, I also, you know, and I, I stayed this in the phone calls that we have a whole information pack that we send out. And in that we also describe our processes. Again, we give them a link to our frequently asked questions. It also gives like our pricing, what the retainer fees will be. And we also linked to podcasts that we have or blog, blog posts we have that are applicable to their case that they can either read about or listen to. And then I follow up with that. I'll wait about a week. And if I don't hear from him follow up to see if they have additional questions and if they would like to move forward, I go ahead and send them the client and attorney information form so we can get the engagement letter draft.
Leah:
And then that engagement letter lets us start, you know, getting to work and requesting information. And so after a client signs, an engagement letter, then we get to start working on this project. And back in the day, we would just ask the client to send us everything they had. And I don't remember if you'll probably remember this case as soon as I start describing it. Cause we didn't talk about this beforehand, but there was a case that involved a trust and a trustee and we asked, we just said, yeah, just send everything you have. And we start digging through the information and the bank statements weren't even like in order and they weren't even grouped together. And they were mixed in with other documents and other court filings. And I just remember when it was time to charge this client for the bill, there was just an amazing amount that was just to, you know, going towards, um, organizing inventory and then the documents and then creating an inventory of those documents. I mean, it was, and I think it had even been Bates stamped in that disorganized order. And so we keep track of Bates stamps as we're inventorying. And so it just made, it was just such a mess. I just remember that case being such a mess and the worst feeling, one of the worst feelings to me when I was doing a lot of the communicating with clients was they would ask, oh, so what are you finding? And I'm thinking, oh my we're just organizing your stuff. Like we haven't even gotten to do any of the fun stuff yet. So that's how we handled that process back in the day. But now we're more, like I said, we don't control a lot of the inputs, but we can control how we process it and we can control how that client engages with us. Um, or, you know, define what that client engagement looks like. That's when we started incorporating our case planning process, we get that engagement letter and then you schedule a case planning workshop where all of us attend. Yeah. Everyone who may work on the case attends. And so then tell us what case planning involves, how do we do that now?
Megan:
So yeah, like Leah said, we involve everyone that may work on it. And that's kind of nice because even if you're not going to work it, you may have some ideas on what analysis we can do or what documents we need. It's just all always good to have all hands on deck and to brainstorm. And what we do is we turn the client's concerns into our investigation priorities. So or identifying analysis that will complete the investigation priorities. So say the concern is a partnership. Someone's invested in a partnership. Our client doesn't think that the money invested in the business is being used for business purposes. We then say, okay, that's their top priority. We need to trace how funds were used or identify when their investment came in and then trace how the funds were used using bank statements and credit cards. And so then what we do, so we go through, they may have multiple concerns. You know, another one may be that they have, it could be an employer, has an employee that they think is paying themselves extra. So then that would require us to do a payroll analysis, compare it maybe to their employee agreement that states what their salary or hourly rate should be. And, you know, then compare it back to what they're receiving. And then, so then what we do in that, as we identify their concerns, turn it into kind of what we're going to do to act upon that state, what our analysis is going to be and what documents we're going to meet need. And from that we form our case plan and that case plan gets sent to the client and their counsel, if their counsel's involved to approve that case plan. And that's good just to see if we're on the same page or maybe we misinterpreted one of their concerns and they're not as concerned about something we put in there. They don't want to spend the money on a certain thing. So we'll take it out or add something as they see fit. And then it also gives us a good list of documents that we're going to need. Um, and then I send that on. And the one thing I do like about our new process is we're upfront about, we will only start the case once we have the majority of the records, because I think when I first started, we would get a few statements, you know, work on what we could, but then we'd be like, oh, well we're missing six months. Go back to the client. After the six months, it could be a couple months before we were able to obtain those missing statements. And then you'd have to kind of start back up, which ended up being pretty inefficient. It's more efficient if we have everything we need and can do it all at once.
Leah:
We have a case right now that there were multiple different banks that were used during this time, but they kind of all roll into each other, like the account would close and then it would start at another bank and then that bank was purchased. And so because of this, we have like this one gap here or another gap somewhere else. But for the purposes of the investigation, we have to have like, we have to have complete bank statements in order to perform these tasks. And so it's really nice, like you were saying that we haven't even started processing it yet until we have that complete information. And then in the end it's going to be more efficient for the client and for us, um, because we need to be able to work on other client engagements as well.
Megan:
Yeah. In the end, it's definitely better for them. They may think that we're not doing that much, but it's definitely better to do it all at once than start and stop because you definitely will forget what you were doing. And Leah can attest to those having testified in cases. Well, after we've issued our report, I mean, you have a lot of things up other cases coming in and you, you know, you can't remember every single detail of what you were doing and to speak to what you were earlier were saying earlier about client information coming in and being all out of order. We actually have a current case where the opposing counsel provided us with everything requested and just put it in the most random order. It could be bank statements, insurance documents. I mean, everything was just, and there were over 5,000 pages of this. And I finally asked our client's attorney, if they could just request, we just need, can you just dig out the bank statements or give us the bank statements we need because that's costing our client a lot of money for us to go in and organize what the mess. They kind of meant that the opposing counsel kind of made. And so he, the client's counsel was able to request that from the opposing counsel and get just bank statements that were not buried and a bunch of other doctors.
Leah:
Yeah. And I think by having a plan upfront, like you talked about like identify the client concerns, what does that have those concerns that the client has? What can we actually do? We're not responsible for this entire case. You know, that that's between the client, their attorney, we are helping them uncover facts and data that will support what they think happened. And sometimes we find that what they think was happening wasn't happening or that there's not enough evidence. But what I like about this process is that we connect those client concerns because we are in the client service business into priorities and things, actionable things that we as investigators can address. So then that's communicated with the client, then we identify, okay. So if there's a payroll issue, this is the type of analysis we need to do. If something involves a lot of bank statements, this is the type of analysis we're going to do. And so then we can be specific with those data requests that say for this relevant period. And we define the relevant period at the beginning to, for this relevant period, we want to request all of these bank statements, credit card statements, and so forth. We may discover that additional bank statements need to be provided or anything. You know, we don't know where that's going to lead, but at least from the beginning, we can say, please provide these things. So then when you got a stack of horrible horribly produced items, you could go back and specifically say, okay, can they just provide this to us and put that back on them? Or, and there's also those cases we've had at least a couple in the last couple of years where that data procurement or that document request list, it identified what we couldn't do for the client.
Megan:
Yeah. I was just going to say that or mentioned that as well. I like having the case plan and the document requests, because if a client follows up and they want a status update, I can take that case plan. And I know where we are in the analysis of it. Like what concern we're on, what we're doing. Are we still missing items? A lot of times we're still waiting on procuring documents and I can say, well, we're still waiting on these bank statements or we haven't received the payroll reports from the payroll company. Um, and a lot of times we're also waiting on the opposing councils to provide documents. So that can always take a while. But the case plan allows me to look at it, see where we're at and let them inform the client of our, of the status of their case. I think another thing that it's good for is say we get through our analysis and we find some concerning things. Maybe we want to add to the case plan, but that would be outside of the original scope. So that's going to cost more money. And we want to kind of like a change order and construction. You want to be upfront with that and say, well, this wasn't an original scope. So if you want us to track this down, we're going to need, you know, it will cost more money.
Leah:
Yeah. That's been really helpful in just being transparent with the client and looking at, okay, this seems like a big concern to us. And, but to the client, it may not be. And so before we jump in and spend all this time investigating something that wasn't a priority of the client, just give the client an opportunity to give us that feedback. You know, in another situation too, in the same area is when we provide a document request list to somebody and they start going to prepare it. And they realize that data, they thought they had it doesn't actually exist. And so that changes the whole conversation. Whereas before I feel like there was this, it's not that that I would promise something, you know, cause it's an investigation it's exploratory it's I can't predict what I'm going to find. Like that's the nature of an investigation, but it would seem like I was promising, oh yeah, I can solve your problem. But then I had to explain why I couldn't solve their problem at the end of the day. Well, now with this process, we can start from the beginning and say, Hey, we're going to need a report that lists all your POS. We're going to need a report that lists all your invoices. We're going to need user or audit log. And so then they go looking to download this information and then they find out we can't even run some of these reports. Well, that changes that conversation early in the engagement, instead of months and months, and months later, we've been working on it. We keep asking for things and we're not getting them. And now we're all frustrated with each other. I just, I just have seen this process work to help steer those types of engagements in the right direction before we've wasted. It feels like a waste when we've just been like in this mess with the client for six months, then we don't really have anything to report at the end. When we know at the beginning that they can't provide certain things, we can either help them find other ways of obtaining that information. Or we can say, Hey, I just don't even think you need us. At this point in the investigation, let's get someone who's specialized in open source intelligence. Let's get someone on surveillance. Let's get someone who specializes in interviewing and let's come up with a different game plan and we've had to do,
Megan:
Yeah. Being transparent with the client is always the most important thing. I'm not leading them down a path where we can't help them or just saying, Hey, if you're not going to be able to provide these things, you thought you would, this is going to decrease the scope of what we can do.
Leah:
Yeah, for sure. Just setting those expectations and communicating about them throughout the engagement. And then as an engagement, you know, is being worked on, like it moves in to data processing and analysis and reports and findings and stuff. How do you decide how to keep the client updated and
Megan:
All that? I try to keep in constant contact with the clients. And a lot of times questions will form out of the analysis. So if the analyst is, you know, reviewing the data, doing their thing and realize they have questions for the client, they'll send them to me and I'll send them to the client or call the client to get the answers because this allows the analyst to just keep on working and getting through the the analytics and their work without having to spend a lot of time with a client on the phone or over email. So I will try to give status reports when I can, Hey, we've completed this concern. We're moving on to this concern or, Hey, I have the, the following clarifying question. Can you clarify some issues for us because no one knows the client's business better than the client. So as we've mentioned before, we may think something looks weird and it's a normal day to day thing for their business. Another thing I do is, you know, we may realize we need extra documents when we're getting in there and Hey, do you have support for this journal entry or whatever? So I'll communicate with the client on that. And I make sure to follow up if we haven't received the documents we need, I kind of, I track what we've requested and when we received it. And so I'll often update the clients, say, Hey, following up, we still need this. We're not going to be able to move on with our analysis until we have it. So those are ways that are just kind of stay in contact with them.
Leah:
Yeah. Because each of those things are very natural ways to check in with the client, because as you're talking to them, you can update them. They feel involved and included. And then I feel like whenever, maybe a project's been on hold for a while, or we've been waiting for a while. Or maybe we're just in the middle of a very large analysis and it, we haven't talked to them in a while. I feel like you just make sure that you're at least telling them, Hey, we're still working on this. We haven't forgotten about you. You know?
Megan:
Yeah. I think just having them involved in any kind of communication, let them know that we're working on their case. And we didn't just put them on the side sidelines. And it can be as simple as, Hey, this scan didn't, we couldn't open this PDF or this scan was blurry. Can you rescan it? But we definitely have bigger clients where they just have a lot of data and it takes a lot of time to get through. And so just communicating that, Hey, your data is a lot and just digitizing all that from PDF. It's going to take, it's taking a while and it may be in different formats. So getting it into the like one format, I don't think they are a lot of our clients aren't in the day-to-day details. So they may not realize what formats these reports are in and that we actually digitize everything. And so that's how we can run our analysis.
Leah:
Well, thank you so much, Megan, for spending time with me, hopefully, you know, some of our listeners will find this helpful in their own practice. And I know that we do have quite a few listeners who run their own practice and maybe you don't have a team like I do. But maybe you can start thinking about how can you leverage technology to, you know, like I mentioned, when I was working cases by myself, I had someone who would schedule appointments. They would just answer the phone, get some brief information for me and schedule appointments or having a scheduling software on our website where people can make their own appointments to talk to us. And so much of that can be automated to have like that client concerns, questionnaire or any, you know, any information that needs to be gathered upfront. That'll help us prepare to talk to the client and kinda know, you know, how to help them not to mention if it's a client that you know, that you're not going to be able to help them. Maybe you can even just send them an email based on that information and say, Hey, this is who I'd recommend for that digital forensics issue or something like that. There are ways to take what we've disbursed over a team and try to create more space in your business as a sole practitioner. So thanks again, Megan. It was good talking to you and be back soon.
Megan:
Thanks for having me.
Outro:
Thank you for listening to the investigation game. For more information on any of the topics brought up on this show, visit Workman forensics.com. If you enjoyed our show, be sure to subscribe and leave a review. You can also connect with us on any social media platform by searching the Workman forensics. If you have any questions or topic ideas, please email us@podcastatworkmanforensics.com. Thank you.