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Risk Fraud & Compliance

2020 Government Fraud, Waste & Abuse Report: How Prepared Are We?

· 5 minute read

· 5 minute read

How confident are state and local government employees in their ability to combat fraud, waste, and abuse?

To find out, Thomson Reuters surveyed 87 professionals from state and county agencies around the country, and asked them to assess their departments’ own fraud-prevention efforts in terms of available resources, technological capabilities, investigative tools, time management, workflow logistics, and overall effectiveness.

The data was compiled and distilled in the just-published 2020 Thomson Reuters Government Fraud, Waste & Abuse Report, which offers a rare empirical examination of fraud-prevention efforts from the point of view of front-line employees — administrators, clerks, assessors, auditors, and other department-level employees — who guard the government systems in which the public places its trust.

Challenges, Priorities & Trade-offs

The survey revealed several themes common to agencies around the country, the most concerning of which is that few people in government believe they are fully prepared and even capable of preventing fraud before it happens. Further, front-line personnel are only slightly more confident in their ability to investigate perpetrators after the fact.

That’s not to say that state and county governments aren’t prepared, or that they don’t have the necessary protocols in place to prevent criminal activity. They are, and they do — they’re just not as prepared as they’d like to be, or know they could be given the proper resources, according to their survey responses. In stark statistical terms, the report illuminates the trade-offs many state and local government agencies make between the limited resources available to them to prevent and investigate fraud, waste, and abuse, and the results they must accept given the practical limitations of their department.

For example, keeping current with technology and managing tight budgets were cited by survey respondents as the top two challenges facing state and county government agencies, followed by the loss of institutional knowledge as older workers retire, and the difficulty in recruiting and training new hires. These and other factors led 44% of survey respondents to reveal that, in their opinion, they did not have the resources needed for effective fraud prevention.

Prevention vs. Investigation

While these results don’t necessarily apply to federal fraud-prevention efforts, they do echo similar concerns at the federal level. For the purposes of this report, however, the survey population was limited to state and county employees because, while federal fraud-prevention gets the most media attention, fraudsters often target small, local government entities with limited resources and inadequate oversight. Moreover, front-line government employees at the state and local levels are also the ones most likely to encounter suspicious activity. Indeed, not only are they the people most directly involved with the collection and disbursement of funds and services, they are also the employees most likely to communicate directly with service vendors, contractors, and beneficiaries.

Another common frustration voiced by survey respondents was a general desire to spend more time on fraud prevention and less time on investigations. While a relatively high percentage of respondents indicated that they were “confident” or “very confident” in their department’s investigative capabilities, prevention is more cost-effective in the long run. Also, investigations only happen after a crime has occurred, when it is often too late to recover monetary losses.

Better Tools, Brighter Future

Protecting taxpayers against such losses is of course one of the government’s primary responsibilities, but the survey suggests that competing priorities and a lack of up-to-date technology are often the culprits when the system fails. In the area of search technology, for example, there are many tools available that can provide more reliable background screening for potential government vendors and contractors.  Unfortunately, budget constraints and a lack of training often mean that vendor screening isn’t nearly as thorough as it could be (and arguably should be).

Though the survey focuses on current measures and resources, it also asks government employees on the front lines to evaluate their level of preparedness for the future, as well as their expectations about the potential for fraud, waste, and abuse in their departments, given the resources at their disposal. Results were mixed in this area, as roughly one-third of respondents predicted the prevalence of fraud, waste, and abuse would increase in the next two years, while more than half said they felt it would stay the same. At the county level, however, fully 50% of respondents said they felt that instances of fraud, waste, and abuse would increase over the next two years.

Protecting Public Trust

Lacking adequate resources and focused leadership, it’s difficult for even the most dedicated civil servants to perform at their highest level. Tight budgets, outdated IT systems, staff attrition, changing regulations, overwhelming workloads, inadequate training — all of these combined forces work against the development of more efficient and effective fraud-prevention efforts at the state and county level.

You can download a copy of the 2020 Thomson Reuters Government Fraud, Waste & Abuse Report here.

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