A Practical Guide to Analytics for Governments

CHAPTER 9Fraud, Waste, and Abuse

Carl Hammersburg

Overworked, understaffed, and under attack. In many ways, that is what an average day in government feels like for staff who are tasked with ensuring that taxes are reported and paid by individuals and businesses and tax dollars don’t go out the door to the wrong people. Worse yet, the lens of citizens applies a Goldilocks filter, as I have come to refer to it. Pay anything inappropriately, and you are being too easy; audit or investigate the wrong person or company, and you’re being too hard and imposing a government burden.

The rise of computers and the Internet has brought many improvements. I remember when I submitted my tax returns to the IRS on paper, and waited months for a check back in the mail. Now, I submit things online quickly, and have a refund deposited directly to my bank account within weeks.

At the same time, these advances have opened up all of these programs to many more threats in terms of fraud. Identity theft for purposes of committing government fraud has risen dramatically in recent years. When the Federal Trade Commission issued its annual report on consumer complaints in February 2015, the top complaint was identity theft, and using stolen identities for government fraud (39 percent) exceeded credit card (17 percent) and bank account fraud (8 percent) together.¹ Programs suddenly saw funding for standard audits and investigations diverted to tackle cybersecurity and identity theft issues. While the ...