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We can all agree that the ongoing discoveries of fraud perpetrated on various Department of Human Services programs is alarming. DHS shared two potential next steps that could bring additional oversight (“Autism service providers probed,” Sept. 19). Conspicuously absent are anti-fraud requirements for program participants, such as having internal risk management/managers, anti-fraud policies and procedures, conducting fraud risk assessments to identify gaps in control processes and close them, and the like. We also need enhanced anti-fraud practices at the Office of Inspector General and state agencies.
The Association of Certified Fraud Examiners’ 2024 Report To The Nations indicates that government and public administration is the No. 3 victim industry by count of cases (296) of occupational fraud, with most cases resulting from corruption, followed by billing schemes. The average loss was $2.3 million that wasn’t discovered for 12 months.
Establishing anti-fraud controls reduces losses and leads to quicker detection. Per the ACFE report, the following practices resulted in 50% loss reduction: fraud training for managers/executives, having an anti-fraud policy and proactive data monitoring/analysis. A 47% loss reduction resulted from fraud training for employees and formal fraud risk assessments.
I hope all state programs, local governments, businesses of all sizes, nonprofits, clubs and religious organizations review the ACFE report and take actions to implement an anti-fraud program and practices with the help of a certified fraud examiner. Ask your lawyer or accountant if they have a CFE on staff to assist you. You can also see the report at tinyurl.com/acfe-fraud-report.
Dan Patton, Minneapolis
The writer is a retired certified fraud examiner.