Special Task Force for the Prevention of Fraud and Abuse

The Government's financial assistance programs are vulnerable targets of fraud and related white-collar crimes. The identification of the extent, nature, and frequency of these illegal acts, together with strong internal controls and effective audit coverage, is essential, but several agencies reviewed were not doing enough to identify fraud. No one knows the magnitude of fraud against the Government. Agencies have not established management information systems to deal with the fraud problem; they do not know the amount of fraud in their programs nor can they estimate the potential amount of unknown fraud. Until recently, agencies have not made detection of fraud a high priority. Agencies have no assurance that personnel administering programs are referring all suspected frauds for investigation because: there are no controls to see that suspicious matters are reported; large workloads hinder identification of suspected fraud by program personnel; employees lose interest in reporting suspected frauds when followup actions are not promptly taken; and many Federal programs are administered by State, local, or private sector institutions, and Federal agencies often unjustifiably rely on those non-Federal entities to report and identify fraud. Agency investigators often do not have the background, experience, and training needed to effectively detect and identify fraud. A Special Task Force for the Prevention of Fraud has been established within GAO to evaluate the adequacy of management control systems in Federal agencies that are necessary for the prevention of fraud and to assesss the adequacy of the followup and corrective actions taken on reports of auditors and investigators.