Internal Fraud in Government Agencies —Facing Reality
Fighting fraud in any business is an ongoing battle, and the risk for internal fraud in government agencies is no exception. Here are three examples of internal fraud in government agencies:
- This previously convicted embezzler was indicted for the alleged embezzlement of $890,000 from the county government agency where she worked as a finance clerk.
- A former town manager indicted for allegedly embezzling $293,000 over a 3-year period from his town government employer.
- This civilian military employee who held the position of Requesting and Approving Officer pled guilty to embezzled $2.9 million in government funds by authorizing fraudulent payments to a business banking account she controlled.
The potential for internal fraud in government agencies is indisputable. Unfortunately, those in charge rarely consider the likelihood of these crimes happening within their areas. Here’s how to reduce your risk to internal fraud in government agencies:
1) Recognize the Threat: Internal fraud in government agencies is a real possibility. The employee most likely to commit internal fraud in government agencies usually holds a position of trust, has greatest opportunity, is least suspected, and has little or no supervisory oversight.
2) New-Hire Process: The above $890,000 scheme proves that controlling internal fraud in government agencies must begin at the point of hire. Reduce the risk by conducting comprehensive background and credit checks.
3) Multiple Tasking: Again, that $2.9 million embezzlement case cited above proves the point that no single employee should have the ability to affect every stage of a critical work process.
4) Supervisory Oversight: Make it a point to ensure that adequate internal controls and proper oversight and monitoring strategies are in place.
Internal fraud in government agencies can be contained. The above “four steps” will help to deter internal fraud in any operation.
If you are interested in learning more about internal fraud in government agencies, pick up a copy of Business Fraud: From Trust to Betrayal today!