Less than one third in public sector say the majority of fraud is ever detected
Government agencies performed significantly worse than the business sector on fraud detection and mitigation, according to a new survey. Less than one third of government respondents said the majority of fraud is detected and less than half said fraud that is detected ever gets reported, compared to 42 percent and 60 percent of respondents from the commercial sector, respectively.
The 2017 Fraud Survey from ACL, a risk management software provider helping governments and companies around the world stamp out fraud, polled more than 500 audit, compliance and risk management professionals on anti-fraud practices.
“Fraud in government agencies is estimated to cost taxpayers more than $136 billion each year1, and that’s just from improper payments,” commented Dan Zitting, chief product officer at ACL. “While both the public and private sector need to enhance their anti-fraud practices, the relative underperformance by government agencies should be a major concern of elected officials and their constituents.”
The survey also found that less than 30 percent of anti-fraud recommendations are fully acted upon by government agencies, compared to about 40 percent in the business sector. Both government and business respondents said the primary reasons for the failure to take action is lack of time/resources or approvals. However, this leading reason fraud is allowed to go unchecked was reported by less than a quarter of respondents (21 percent) in corporate firms, compared to nearly 40 percent of public sector professionals.
“Having worked with a number of government agencies to help them stop fraud, we were surprised by the differences in fraud management found between government and business,” said Scott Robinson, director, public sector, ACL. “It is clear that the public sector remains highly susceptible to fraud, and that many agencies are neglecting to take the necessary action to fulfill the public’s trust.”