U.S. government struggling with comprehensive fraud strategies

The U.S. government needs to change strategies if it hopes to combat a massive fraud problem.
Speakers at the SAS Government Leadership Forum agree. The U.S. government needs to change strategies if it hopes to combat a massive fraud problem.

In 2014, the federal government lost more than $125 billion to fraud, waste and abuse. And that’s just what we know about. While that number may sound incredible, those on the front lines of the government fraud fight know that it's all too real.

The US government needs to change strategies if it hopes to combat the massive fraud problem. The Government Accountability Office (GAO) released new guidance in July 2015 that takes more of a risk assessment approach, as opposed to the typical pay-and-chase model where agencies attempt to identify and pursue fraudsters after payments have been made and try to recoup large sums of money. By the time investigators have caught up, the money is often already overseas in the pockets of Russian organized criminals or terrorist organizations.

During a panel presentation at the recent SAS Government Leadership Forum, Tonita Gillich, Assistant Director of Forensic Audits and Investigative Services at the GAO, acknowledged the new guidelines, noting that while fraud and improper payments are not always the same thing, federal managers can use similar approaches to combat both. Moving forward, Gillich believes program managers will take advantage of those similarities and take a more strategic, risk-focused approach.

"A big part of any fraud reduction process involves advanced analytics," said SAS Federal Chief Analytics Officer JR Helmig. By using advanced analytics to look at larger trends in fraud, waste and abuse, the panel agreed that government agencies can better lay out their risk management strategy.

In June, the FBI and Health and Human Services took down more than 300 fraudsters accused of bilking more than $900 million from Medicare. Those kinds of busts can be instructive for other agencies and states, however, they may not return a significant percentage of the money. They make for splashy headlines, but do little to change the culture that led to the fraud in the first place.

“The results are good, but they’re episodic, and they’re floating detached from a comprehensive attack on the problem,” said former Postal Service Inspector General David Williams. “Without a map, our attack is going to be ineffective because we don’t know where fraud is and where programs are vulnerable. We don't know if we have too many resources or if we have too few resources. We don’t know if fraud is growing or it it's shrinking.”

And therein lies the true problem. While analytics can help with the pay-and-chase schemes, advanced analytics can be used to fuel a more widespread change. While the size and scope of government makes it impossible to remove fraud entirely, it is possible to greatly reduce that $125+ billion. As we learned during the SAS Government Leadership Forum, agencies have already taken action, but with the right analytics tools, they can speed up and improve the entire process.

If you're interested in hearing these presentations and others from the SAS Government Leadership Forum, view the on-demand sessions.


About Author

Steve Bennett

Director of the Global Government Practice

Steve Bennett, Ph.D. is the Director of the Global Government Practice at SAS. With twelve years of experience in the U.S. Department of Homeland Security, he has a passion for improving the speed and quality of public sector decision making through analytics. While he enjoys discussing machine learning, data visualization, and decision theory, he also loves talking faith, family, and woodworking!

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