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Preventing Fraud

How government agencies can shift gears from fraud investigation to fraud prevention

For government workers who investigate fraud, the idea of identifying and stopping an illicit actor after a prolonged investigation is satisfying, but not as satisfying as preventing the fraud from happening in the first place.

Indeed, according to Thomson Reuters’ recent 2022 Government Fraud Waste & Abuse survey more than half (53%) of government fraud investigators’ work is focused on fraud detection and investigations, while only 27% is focused on fraud prevention. For many government fraud investigators, that ratio leaves too little time for fraud prevention, which they would like to increase to at least 37% of their time, according to the survey.

This desire was even more pronounced at the local level, where survey respondents say they would prefer to spend 53% of their time on front-end prevention — up from their current level of 41%.

Certainly, fraud prevention has its benefits, especially in the eyes of investigating agents who may perceive prevention as a more efficient and effective way to safeguard the public trust. However, shifting from catching fraud, waste, and abuse after it’s happened, to prevent it beforehand isn’t an easy transition. Yet, there are ways that state and local agencies can prevent fraud, either by implementing new solutions or by utilizing the tools they already have in new ways.

Here are five ways that state and local agencies can shift to prevent fraud, waste, and abuse:

1. Implement a case management solution

Nearly three-fourths of state and local government fraud investigators surveyed said they are confident that they have the tools needed to address investigative issues; however, almost three-fourths reported that their department does not have a case management system in place.

Of those that did, systems such as those created by Deloitte, SAS, or Thomson Reuters were the most popular, but none was used by more than 10% of surveyed investigators. This lack of urgency on case management solutions is troubling, especially for a profession that wants to improve its fraud prevention efforts. Efficiency in managing cases will allow agents to identify more effective fraud prevention techniques with cases of similar crimes, locations, and illicit actors.

2. Establish new cybersecurity measures

New cybersecurity measures, such as implementing two-factor authentication, encryption, ID management, and more can go a long way to protect government agencies from data breaches, ransomware, and other intrusions.

Fortunately, almost two-thirds (62%) of respondents say their department has implemented cybersecurity measures to prevent the kind of cyber-attacks that are specifically aimed at obtaining private citizen information and other departmental data. That means, of course, that one-third of respondents say they have not added extra measures. This is shortsighted, however, as any cybersecurity breach can have disastrous consequences for the government agency and the community it serves, and preventing it allows agents to more confidently move ahead with their work.

3. Hire more professional investigators

The steep challenge of hiring and staffing in government agencies is unsurprisingly of major concern to agency leaders. When ranking the biggest challenges that departments are facing, recruiting new talent (with 40% ranking this a major challenge) and the loss of institutional knowledge from retiring staff (37%) were among the top three concerns cited by survey respondents.

Clearly, fraud prevention efforts would be boosted by having more staff on the front lines of the fight, and some agencies are responding: When asked the ways in which their organization identifies fraud, almost one-quarter (23%) of respondents said their department is hiring more anti-fraud workers within their home state.

4. Increase remote access to files and resources

One of the major challenges that existed during the global pandemic was the need to rely mostly on remote work as government office lockdowns became the norm. Of course, this was only effective if government workers had remote access to the files and resources that they needed to do their jobs effectively. That became a problem during the pandemic, with about 1-in-4 workers in 2020 citing diminished access to files and resources as a major hindrance in doing their jobs.

Fortunately, that problem may have eased somewhat, with 18% saying citing this problem in the 2022 survey. Yet, this lack of easy access is still a concern for many government agencies, especially local ones. For years, government agencies have been often woefully behind the curve on moving their paper-intensive documentation into a digital format that can be more easily accessed remotely.

It would be wise for agencies to continue to prioritize digitization and enhance remote access for their workers to allow them to be more effective in preventing fraud.

5. Implement a better public records search solution

Finding the correct information quickly from public records is critical for fraud investigators; yet almost half (48%) still depend on Google for much of their search needs, which does present problems. Fortunately, fraud investigators are increasingly using third-party search platforms, such as Thomson Reuters CLEAR, which was the choice of 46% of those surveyed.

This is a very useful step forward. While online search engines, such as Google, are designed to deliver the single best answer to a search query, more proprietary investigative solutions are designed to pull multiple sources of data together from various transparent sources, and then show how they’re connected — for example, whether two people are married or live at the same residence.

This heightened level of information and insight can prove extremely valuable during an investigation and can prevent further fraud down the road.

In a perfect system, there would be no fraud, waste, or abuse, because superior fraud prevention measures would make it impossible, rendering detection and investigation somewhat unnecessary. Unfortunately, there is no such thing as a perfect system, which is why efforts to improve current systems and procedures that emphasize fraud prevention are such a high priority for many state and local governments.

You can learn more about how to prevent fraud, waste, and abuse in Thomson Reuters’ 2022 Government Fraud Waste & Abuse survey report, here.

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