Strategies to Prevent and Detect Fraud, Waste, and Abuse in Government Programs

Government programs are designed to support and serve communities and individuals through federal, state, and local funding. Because of their size and complex nature, government programs are susceptible to fraud, waste, and abuse. Fraud can range from intentional acts, such as duplicate claims, to targeted organized crime. It's important for governmental entities to use a collaborative approach. We say there is no silver bullet to fraud. However, there are effective ways and strategies government programs can use to prevent and detect fraud. 

Louise Gannuch:

Hi, my name is Louise Gannuch, and I'm a partner at EisnerAmper in our risk and compliance services team. I am a certified internal auditor and a certified fraud examiner. 

One common preventative strategy is conducting a comprehensive fraud risk assessment. This is going to help you identify the ways in which fraud could occur, their likelihood of occurring, and what mitigating factors are in place to address those risks. A fraud risk assessment should start at the onset of the program, and you need to include a variety of individuals to leverage their unique backgrounds and expertise, and that's going to help sink through all the different ways that fraud might happen. You want to make sure that you document, retain, and then update the fraud risk assessment throughout the duration. Don't let it be a one-time exercise. 

Another key strategy for identifying fraud is setting up whistleblower hotlines. The Association of Certified Fraud Examiners, they identify that hotlines are one of the most common detective methods. You can set up a hotline through a form, email, telephone number, or even using text messages. You want to make sure that you train all of your employees and make the hotline easily available. Because at the end of the day, if you have a hotline and no one knows about it, it's not going to be effective. 

Another common and useful strategy involves data analytics. This should be performed throughout the program to help detect anomalies or patterns that might require your closer evaluation. One area where we see data analytics being helpful is with identifying potential duplicates, which can happen with addresses, names, socials, or dates such as date of birth or date of death. If you aren't using data analytics to detect anomalies, potential fraud can be more difficult to find, and that's going to open up your program to increased risk. 

Dana Daigle:

From a payment perspective, controls around payment verification are very important. These help to prevent unauthorized transactions and maintain compliance. One of the simple strategies is TIN matching. TIN matching is where we use a payee's name and the tax identification number provided by that payee and match it to the IRS records to help confirm an applicant's identity. It also helps prevent inaccurate payments and helps to maintain application monitoring. 

Unfortunately, fraud can harm public trust. It can harm an organization's reputation, the effectiveness of a program, and also the outcome of that program and those who the program is intended for. Every program wants to be recognized for the success and the positive outcomes of that program, not for fraud. That's why it's important that government agencies take proactive approach to prevent, detect, and respond to fraud. Some of the strategies we talked about today are useful in doing this, but they're only a starting point. We have other tips and best practices through videos, webinars, and articles, so be sure to check out the links below to see additional EisnerAmper insight.

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