The nonpartisan Government Accountability Office (an office needed more now than ever) has released a new report. Right off the bat, the GAO shares a fast fact: “No area of the federal government is immune to fraud. We estimated that the federal government could lose between $233 billion and $521 billion annually to fraud.” No beating around the bush there. Take that as a warning too. That is a lot of money that being stolen from the U.S. taxpayer.
The GAO simultaneously cautioned that its new figure is incomplete and imprecise because of a lack of reliable data presented by the federal government and undercovering fraud has also become far more of a challenge because of the sophistication of the schemes to steal federal funds. Meaning the GAO can only estimate the fraud numbers because the federal government doesn’t have any idea what they are spending? Maybe. And meaning the fraudster is smarter than us when it comes to fraud? Definitely. Either way, estimates from the GAO is better than nothing.
GAO computed its estimate by studying the federal budget between the 2018 and 2022 fiscal years, spanning the Trump and Biden administrations and the beginning of the coronavirus pandemic, when Democrats and Republicans alike provisioned historic aid that scammers repeatedly targeted. One of the few times congresses was bipartisan. Fraud on the other hand is always bipartisan. With the aid of a complicated economic model, GAO computed that fraud in past years may have reached as high as 7 percent of federal spending. The highest spikes in fraud activity probably coincided with the past abuse of coronavirus relief funds. It was a fraudsters buffet.
All this follows a week after the White House endorsed new legislation to crack down on fraud including but not limited to identity theft. Beter late than never. Imagine if the federal government cracked down on fraud before handing out pandemic relief funds like candy!
Great job by the Government Accountability Office for doing the best they can with what they got.
Today’s Fraud of The Day is based on article “New report estimates U.S. fraud losses exceed $233 billion annually” published by The Washington Post on April 16, 2024
The first-of-its-kind analysis, based on spending between 2018 and 2022, follows a week after the White House endorsed new legislation to crack down on fraud including identity theft.
But the author of that report — the nonpartisan Government Accountability Office — simultaneously cautioned that its new figure is incomplete and imprecise because of a lack of reliable data and the inherent challenge in uncovering sophisticated schemes to steal federal funds.
