Fraud and Abuse in Federal Programs

The Auditor's Role] Gao ID: 114980 April 14, 1981

The problem of fraud, abuse, and waste in Federal programs was discussed. The auditor's role in taking the preventive, detective, and corrective measures to combat this problem was explained. The auditor's role in reducing Government fraud and corruption can be seen only in tandem with that of the Federal program manager. In making prevention a priority, the manager has to decide how to strike the appropriate balance between a system which has enough flexibility to promptly and efficiently deliver services and yet has enough internal control to prevent the financial devastation of fraud and waste. Fraud is a costly and widespread problem. Once the Government allows fraud to happen, chances are it will never recover the loss. Not only is fraud expensive in terms of dollars and cents, but it also violates the integrity of Federal programs and makes people lose confidence in public institutions. Good systems of internal controls would prevent much of the fraud or would at least result in its quicker detection. Poor controls combined with a lack of prosecutions or administrative actions means that those who commit fraud against the Government have a good chance of going undetected, and, if detected, can often expect to get away without punishment. The sad truth is that crime against the Government often does pay. Agency Inspectors General, the Department of Justice, and GAO are all working hard to see that, in the future, it does not.

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