A groundbreaking new report shows the US government is losing a staggering amount of money to fraud every year.
The Government Accountability Office’s (GAO) first “Fraud Risk Management” report estimates the federal government’s annual losses to fraud fall somewhere between $233 billion and $521 billion.
The GAO uses fiscal data from 2018 through 2022 for its report, defining fraud as “obtaining a thing of value through willful misrepresentation.”
“While the government obligated almost $40 trillion from fiscal years 2018 through 2022, no reliable estimates of fraud losses affecting the federal government previously existed…
GAO identified opportunities and challenges through interviews and data collection focused on 12 agencies representing about 90% of federal obligations.”
The estimates are based on a Monte Carlo simulation, a probabilistic method that helps account for inherent uncertainty in fraud detection.
The GAO says the losses represent about 3% to 7% of all federal obligations.
“GAO collected data from three key sources to develop the estimate: investigative data, such as the number of cases sent for prosecution and the dollar value of closed cases; Office of Inspector General (OIG) semiannual report information; and confirmed fraud data reported to the Office of Management and Budget (OMB) by agencies.
GAO organized these data around three fraud categories—adjudicated, detected potential, and undetected potential. Model design and validation were also informed by 46 fraud studies.”
The GAO does not address how the government can lower levels of fraud.
Instead, the agency’s report focuses on how the Office of Management and Budget and the Treasury Department can better estimate and manage fraud risk by enhancing data collection, standardizing definitions and prioritizing oversight in higher-risk areas.
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The post US Government Losing $233,000,000,000+ To Fraud Every Year, According to First-Ever Estimate From America’s Accountability Office appeared first on The Daily Hodl.
