Need To Prevent Fraud Against the Federal Government

Comments were presented on the serious problem of fraud against the government and how it can be prevented. Since the beginning of calendar year 1979, GAO has had a three-pronged effort underway to help prevent fraud against the government. The first of these efforts is the operation of a nation-wide, toll-free hotline which can be used by citizens anywhere in the country to report instances of fraud in federal programs. So far, GAO has referred almost 6,000 allegations for agency followup. The second effort, vulnerability assessments, is an evaluation of the susceptibility of agencies and their programs to fraud and abuse. In making the vulnerability assessments, GAO tests the adequacy of internal controls over major administrative and program-related tasks to determine whether someone could, or has, abused federal assets. At several federal agencies, GAO found problems which make them vulnerable to fraud. In the third major effort, GAO has been evaluating a statistical sample of identified fraud cases at 21 federal agencies to determine the extent and characteristics of identified fraud in federal programs. In addition, GAO evaluated selected cases to see if internal control failures had allowed fraud to occur. GAO believes fraud can flourish in an environment where controls are not properly implemented or enforced. GAO believes agencies should emphasize fraud prevention, rather than simply pursuing it once it occurs. Prevention is especially important since only a low percentage of suspects are prosecuted and agencies often fail to take effective administrative actions against those who commit fraud.