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GAO-24-106565 1 (2023-11-01)

handle is hein.gao/gaopis0001 and id is 1 raw text is: Why This Matters Key Takeaways Fraud poses a significant risk to the integrity of federal programs and erodes public trust in government.' It contributes to financial and nonfinancial risks that waste taxpayer dollars, threaten national security, or put consumers at risk. Additionally, fraud-which involves obtaining something of value through willful misrepresentation-continues to add to the improper payments made by the government.2 The public health crisis, economic instability, and increased flow of federal funds associated with the COVID-19 pandemic have expanded opportunities for fraud. The extent of fraud associated with COVID-19 programs has not yet been fully determined. However, available measures and estimates indicate substantial levels of fraud occurred. For example, in September 2023, we estimated that the fraud in the Department of Labor's Unemployment Insurance programs during the pandemic-from April 2020 through May 2023- was likely between $100 billion and $135 billion.3 In February 2023, the Comptroller General of the United States testified before the Committee on Oversight and Accountability of the U.S. House of Representatives that federal agencies' lag in implementing fraud risk management was a major factor that contributed to the substantial levels of fraud in pandemic relief programs.4 Specifically, he testified that two of the major factors contributing to agencies' exposure to fraud in COVID-19 relief programs were that they (1) did not strategically manage fraud risks; and (2) lacked appropriate internal controls to prevent, detect, and recover fraudulent and other improper payments. In this report, we are providing information on federal agencies' current fraud risk management status, including reported agency challenges and incentives to managing fraud risks. To conduct this work, GAO analyzed results from a survey. GAO also reviewed narrative responses to select illustrative examples provided by the agencies to support their responses, as well as relevant prior work, including the status of related GAO recommendations made from July 28, 2015, through August 31, 2023. We prepared this report under the authority of the Comptroller General to conduct work to assist Congress with its oversight responsibilities. We surveyed the 24 Chief Financial Officers Act of 1990 (CFO Act) 5 agencies on the reported steps taken to manage fraud risks.6 For example, 20 agencies reported designating an entity to be responsible for fraud risk management. * Agencies described challenges that could impede their efforts to manage fraud risks. For instance, agencies reported the availability of resources (such Page 1 GAO-24-106565 Fraud Risk Management

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