Thomson Reuters' new "Fraud, Waste & Abuse Report" examines how government employees who are responsible for protecting government programs from exploitation and abuse are faring after the pandemic
Everywhere in America, state and local government officials are on the front lines in the ongoing battle against fraud, waste, and abuse (FWA) — and these folks have had their hands full during the pandemic. Saddled with a mandate to distribute trillions of dollars in federal relief funds at an unprecedented pace, state and local governments also had to contend with an equally unprecedented wave of criminal activity from fraudsters intent on exploiting cracks in the system.
As the country emerges from the pandemic, however, many questions about “the system” remain. For example, do government employees feel confident that they can prevent future instances of FWA? Do government agencies have the tools, resources, and staff they need to adequately detect and investigate FWA? And as the pandemic recedes, what challenges remain, and what steps are being taken to meet those challenges?
The 2022 Fraud, Waste & Abuse Report
To answer these and other questions about the government’s current fraud-prevention efforts, Thomson Reuters has released its 2022 Fraud, Waste & Abuse Report — a comprehensive survey of those government employees who are directly responsible for protecting government programs from exploitation and abuse.
This year’s study was conducted in Spring 2022 and included 182 employees from state and local governments, all of whom regularly search public records and use other forms of investigative research as part of their job.
Because they are directly involved in the prevention, detection, and investigation of FWA, these survey respondents are in an ideal position to assess the effectiveness of their investigative efforts, including the extent to which the tools, resources, and training available to them are helping or hindering their ability to do their jobs.
Lessons from the pandemic
Indeed, the results from this year’s study suggest that government employees are at a crossroads as they emerge from the pandemic.
On one hand, those who are actively involved in combatting FWA say the wave of fraudulent activity they experienced during the pandemic has in some ways strengthened their ability to deter FWA — by exposing vulnerabilities in the system and forcing them to be more diligent.
On the other hand, many also say they expect instances of FWA to increase in the coming years and question whether they will have the staff, budget, tools, and training necessary to meet these and other future challenges. A large number of investigators, supervisors, and analysts were part of the survey pool as well, providing valuable insights into the specific types of fraud they are encountering, as well as the ever-evolving technical capabilities and tactics that today’s criminals are using to circumvent government systems.
For example, the survey reveals some of the most common types of fraud that officials are encountering, such as:
- making false claims and using fake or forged IDs and business documents;
- billing or charging excessively for unnecessary items or services;
- billing for goods or services that were never delivered;
- using kickbacks or bribes to obtain items, services, or reimbursements;
- gaining unauthorized access to government systems; and
- using synthetic identities, including bogus business licenses.
And some of the newest fraud tactics that survey participants have seen include:
- automated “bot” attacks;
- fraud “kits” for fake documents or IDs sold on the Dark Web;
- bogus online pharmacies attempting to obtain prescription drugs; and
- social-media payment schemes involving PayPal, Venmo, etc.
To prevent such tactics from succeeding, government employees need a variety of tools and resources, as well as sufficient staff and training to keep up. However, as in past years, the 2022 FWA report reveals that efforts to meet these and other government challenges are often hindered by increasing workloads, strained budgets, retiring staff, and the constant need to keep abreast of new technologies and investigative techniques.
The 2022 report also reveals that these challenges are not likely to disappear anytime soon. While the majority of our respondents reported having sufficient tools and resources to combat fraudulent activity in their departments at the moment, they also expect to encounter even more FWA in the coming years and expressed concern about the increasing technical sophistication of the criminal class. Indeed, fraudsters are always searching for new ways to exploit systemic vulnerabilities, so government authorities are under constant pressure to maintain their vigilance despite being at a technical disadvantage much of the time.
Looking to the future
As the pandemic recedes and demands on government resources return closer to normal levels, our survey suggests that while state and local authorities have weathered two years of unprecedented stress remarkably well, there is still much work to be done.
The pandemic has taught government officials a great deal about the capabilities (and limitations) of their staff and systems, but many issues still need to be addressed in order to fully protect public funds from being stolen or squandered by bad actors using extremely good technology.
You can download a copy of the 2022 Fraud, Waste & Abuse Report here