Detection and Prevention of Fraud for Investigators

Module 1: Understanding Fraud

• Differentiate fraud from waste and abuse; define the five elements of fraud.
• Survey common fraud schemes by officials, vendors/contractors, and program beneficiaries.
• Review major criminal and civil statutes related to fraud (e.g., false statements/claims, mail & wire fraud).
• Introduce prevention and detection tools investigators can apply in varied program contexts.

Module 2: Investigation/Audit Standards and Guidelines

• Outline government audit types under GAGAS (financial, attestation, performance) and CIGIE standards.
• Explain forensic audits and when they’re appropriate.
• Detail investigators’ responsibilities for assessing and responding to fraud risks (SAS 99, GAGAS).
• Clarify reporting expectations, including IG Act requirements and communication with stakeholders.

Module 3: Fraud Prevention

• Strengthen deterrence through timely investigations, consequences, and hotline awareness.
• Design and evaluate internal controls (e.g., segregation of duties, approvals, supervisory review).
• Leverage unannounced audits and continuous monitoring to reduce opportunities for fraud.
• Promote ethics, training, and governance practices that build a strong control environment.

Module 4: Fraud Detection

• Apply technology and analytics (comparison tests, computer matching, trend analysis) to flag anomalies.
• Use cash-flow and net-worth methods to surface hidden income or loss.
• Conduct inventory cut-off tests and physical counts to verify existence and condition of assets.
• Triage and investigate tips from hotlines; distinguish error from intentional misconduct.

Module 5: The Investigative Process

• Plan investigations based on risk indicators; scope steps to confirm whether fraud likely occurred.
• Gather evidence lawfully and effectively (records, interviews), observing employee rights and warnings.
• Coordinate with auditors, counsel, and prosecutors; align with rules of evidence and agency policy.
• Document findings and prepare referrals or reports that support corrective action and accountability.