Outsourcing Inc. (2427:TYO), an IT staffing provider that ranks as the third-largest staffing firm in Japan, announced Monday that the deadline for it to report second-quarter revenue has been extended to 13 October as the company conducts an internal investigation. The original deadline had been 14 August.

The company said in a regulatory filing that the investigation is taking place at its Outsourcing Technology Inc. subsidiary and involves two issues: its application procedure for “employment adjustment subsidies” and dealing with recruitment media companies.

Employment adjustment subsidies were aimed at stabilizing employment during Covid-19, according to the International Labour Organization. When downsizing, Japanese employers must pay each worker leave compensation of 60% or more of the employee’s average daily wage for the previous three months, according to the ILO. The employment adjustment subsidy reimburses part of the amount paid by an employer if the employer commits to continued employment after a temporary reduction or suspension of business.

Outsourcing said that from February 2020 to June 2020, “it was confirmed that some of the people in charge of the applications were preparing some of the documents on behalf of the participants, because the collection of the required document was unsuccessful.”

The other issue under investigation  involved recruitment media companies and its Outsourcing Technology Inc. subsidiary. Outsourcing said the subsidiary “has rules on the internal approval process for signing contracts on business transactions, but part of the transactions was found questionable, as it did not follow the rules.”

The investigation committee itself comprises outside experts, including attorneys and a certified public accountant. It’s expected to be complete around the end of September.

“We will fully cooperate with the investigation by the external investigation committee to proceed with the investigation as soon as possible,” the company said in a press release. “After the investigation of the external investigation committee has been completed, we will disclose the results as soon as we receive the investigation report. In addition, we will take effective measures to prevent recurrence based on the proposals of the external investigation committee.”

Outsourcing Inc. provided an FAQ on the investigation online.

The company’s shareprice has declined by 5.88% today to JPY 1,072 (USD 7.36) and is 22.5% down on the month.