Industry Insights on Fraud Part I: Governmental Institutions

September 25, 2018

Every two years, the Association of Certified Fraud Examiners (ACFE) releases its Report to the Nations. Based on a polling of its members, the 2018 study presents a variety of statistics on reported incidences of occupational fraud that were investigated between January 2016 and October 2017. Among the more interesting data sets in the 2018 Report to the Nations are the industry breakdowns. The chart below summarizes the number of reported cases for selected industries, along with the median loss for those reported cases.

government fraud

The government and public administration category contained the third highest number of reported fraud cases. This is consistent with the 2016 Report to the Nations, in which the government and public administration category ranked second in reported cases. This doesn’t necessarily mean fraud is more common in this sector. As noted in the Report to the Nations, the relatively high number of cases reported may have more to do with the number of CFEs employed in the sector, processes, and controls. The median loss from the reported government/public administration frauds was $125,000, compared to $133,000 in the 2016 study.

Perhaps more interesting is the data on the most common type of occupational frauds schemes. For the government and public administration category, the most common scheme reported was corruption, which was present in 50% of the reported cases in the 2018 study and 38% of the reported cases in the 2016 study. The ACFE defines corruption as, “a scheme in which an employee misuses his or her influence in a business transaction in a way that violates his or her duty to the employer in order to gain a direct or indirect benefit.”

To learn more about our fraud investigation capabilities, or if you feel that your organization may be the victim of a fraud, contact Brittany Garver or Bill Foote at 301.231.6200.