The harmful impacts that fraud schemes have on a company can be incredibly costly. The impacts they can have on government agencies can be even more disastrous. Combatting fraudulent activity requires having meaningful data on your side to help strategize and create effective programs that protect against fraud attempts. That’s why the Association of Certified Fraud Examiners (ACFE) created the Report to the Nations, which is a global study of occupational fraud and abuse. This report captures data on real fraud cases and explores the true cost, tactics, victims, and perpetrators of fraud schemes. They recently released the 2020 report which included a sub-category specifically for government-related fraud cases. Here are some key takeaways from the sub report, providing you an extended view of how fraudsters target governmental entities:
- 338 government-related fraud cases were reported in 2020, or 16% of all cases. The median duration of fraud scheme 19 months and the median age of fraudster was 45 years old.
- Tips remain the most common fraud detection method at 43%. Internal audit is second at 15%.
- Detection by tip was substantially higher at organizations with hotlines, and employee training increased the likelihood of detection by tip.
- 90% of all fraudsters displayed at least one behavioral red flag – top 3 are:
- Living beyond means
- Financial difficulties
- Unusually close association with vendors/customers
The statistics in the report provide many great insights. If one thing is clear, it’s that proper education and creating an environment that encourages reporting suspicious activity are key to identifying and stopping fraud cases. If you want additional information about combatting fraud, our expert forensic team at BerganKDV can help. Contact us to learn more about fraud prevention tactics.
To view the full Report to the Nations, click here.