Government fraud, waste & abuse report Who is winning the war?

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The impact on fraud prevention

Positive signs of change

While front-line government employees have largely put the global pandemic behind them, many familiar challenges in the fight against fraud persist, despite the progress that has been made on several fronts.

Every year, the Thomson Reuters Institute surveys state and local government agency workers to assess whether they have the tools and resources they need to effectively prevent, detect, and investigate fraud, waste, and abuse of public programs and public funds.

In the past few years, the results of these surveys have been greatly impacted by the global Covid-19 pandemic, which had strained virtually all aspects of business as well as government agencies. In the latest report taken from the most recent survey — 2023 Government Fraud, Waste & Abuse Report — however, front-line government workers appear to have taken heed to the lessons of the pandemic and are back to grappling with many of the same challenges they had faced before the pandemic hit. These challenges include tight budgets, too much work, not enough resources, obsolete technology, crippling staffing issues, and a lack of time for critical professional development.

The newly published report gathered survey input from 170 state and local government officials representing different types of agencies. And this year’s results suggest that the pandemic crisis, which has now receded in importance, actually had forced government agencies to re-think how they operate. Indeed, many of the adaptations made in response to the pandemic — such as the option of remote work and more virtual interaction with program beneficiaries — are now permanent features of government work at both the state and local levels.

Another key finding in the report — and another pandemic-era legacy — involves ongoing staffing and retention issues that are coming to the forefront because of a wave of retirements among Baby Boomer-age workers that accelerated during the pandemic. Not surprisingly, recruiting skilled talent continues to be a challenge for governments everywhere, especially in roles that demand specialized technical expertise.

As a result, many front-line employees who took on extra work during the pandemic report that their workload has not decreased, due primarily to staffing shortages and budget cuts. They also report they would like to spend more time on front-end fraud prevention than they currently are able to do.

The impact on fraud prevention

One might expect that over-worked employees, strained resources, and lost institutional knowledge would diminish a government agency’s capacity to fight fraud, waste, and abuse, but that does not seem to be the case everywhere. Indeed, another key finding in this year’s study showed that more than half of front-line government employees and investigators still feel confident that they have the resources necessary to fight fraud, waste, and abuse — although their confidence level is down from previous years.

One possible reason for this drop in confidence is that removing the pandemic from the equation has done little to diminish overall fraud activity. In fact, the opposite may be true. In addition to the usual forms of fraud — such as forged documents, false benefit claims, paid kickbacks, and stolen identities — government investigators also report encountering more sophisticated plots to steal the public’s money. Consequently, more than half of respondents to this year’s survey believe overall fraud activity will continue to increase over the next two years, and that the number of deep-dive investigations requiring additional resources isn’t likely to decrease anytime soon either.

Positive signs of change

On a more positive note, another key finding in the report showed that fewer survey respondents were citing a lack of resources and money as their primary challenge. Less than half of respondents to our 2023 survey said they lacked the resources and budget to effectively combat fraud, waste, and abuse, compared to almost two-thirds in 2020 who said they were plagued by budget woes. And while that large drop in money worries is a significant positive development, it still means that almost half of respondents still cite a lack of resources as a major challenge.

Further, more than half of this year’s respondents reported having specific budget allocations for acquiring the tools and resources needed to fight fraud, waste, and abuse. As a result, more government agencies are employing tools that go far beyond the scope of a simple Google query to search public records, court documents, government websites, and other resources that investigators frequently use to verify legitimate beneficiary claims and identities.

Another positive sign is that almost one-quarter of respondents working at state agencies said they were strengthening their fraud, waste, and abuse teams by hiring more anti-fraud professionals. And while allocating additional resources and personnel to the fight suggests that these agencies are taking these threats seriously, it also means that the possible growth of such illicit activity is seen as substantial enough to require additional attention.

Clearly, even as the pandemic crisis fades and government agency work returns to a more normal state, the overall arms race against fraudsters continues to escalate.

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