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Fraud in governmental grant programs leads to an erosion of public trust and reputational impact, undermines the ability of the program to achieve intended outcomes, leads to lost opportunities to support the purpose of the program through reduced available funding, and increases the cost to respond to the fraud. The trillions of stimulus dollars made available to all areas of the economy to respond to the impacts of COVID-19 heightens the potential for fraud.
The Office of the Special Inspector General for Pandemic Recovery, in its quarterly report to Congress covering April to June 2021, stated that the Justice Department has charged nearly 500 persons with criminal offenses related to pandemic fraud schemes. Quarter highlights include the following:
Further, the Association of Certified Fraud Examiners indicated in its “Report to the Nations – 2020 Global Study on Occupational Fraud and Abuse – Government Edition” that the most common initial detection method for fraud was through a tip (43%). The top three tip sources were employees (54%), anonymous parties (13%), and vendors (10%). Further, detection by tip was substantially higher in organizations with hotlines and employee fraud awareness training.
More information from the Report to the Nations Government Edition can be found here.
Key activities that can help your organization prevent and detect fraud include:
Additional factors for successful oversight of federal funding, from the Department of Interior OIG 2020 report on Lessons Learned for CARES Act Awards include the following:
Do you need help navigating the fraud-specific risks in your organization? P&N has a depth of resources to help mitigate, investigate, and analyze fraud perpetration. Contact us today to find out how we can assist.