RiskTech Forum

SAS: Executive Overview: Combating fraud, waste, abuse and improper payments

Posted: 17 November 2009  |  Source: SAS


The federal budget is nearly US$3 trillion, and wherever there is money,  there is the potential for misappropriation or misuse – intentional or otherwise. Banks, insurance companies and other managers of “big money” can turn away customers who show unethical intents, but governments exist to serve everybody – not just the most law-abiding citizens. It should be no surprise that billions of dollars can be siphoned away from worthy programs due to process deficiencies, lack of transparency or outright fraud.

These issues hit the headlines in the wake of hurricanes Katrina and Rita, which ravaged the Southeastern US in 2005. In December 2006, the US Government Accountability Office (GAO) reported that the Federal Emergency Management Agency (FEMA) had lost more than a billion dollars through potentially improper and/or fraudulent payments.

Some $17 million in rental assistance was paid to individuals who had already received free housing in apartments and trailers. Thousands of individuals claimed damages to the same property from the back-to-back hurricanes to the tune of nearly $20 million in duplicate payments. Foreign students, undocumented aliens, even prisoners, received nearly $1 billion in household support, even though they were ineligible for assistance from FEMA’s Individuals and Households Program. Government-issued debit cards, issued to cover essential living expenses, were used for Caribbean vacations, adult entertainment and luxury items.

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