The pandemic-fueled expansion of unemployment insurance (UI) increased opportunities for fraud, but a new report from the Government Accountability Office (GAO) found that Federal agencies have yet to fully implement recommendations to ensure they are effectively managing fraud risks.
Congress created four new UI programs during the pandemic, and evidence suggests the total amount of fraud in these programs was over $60 billion – and could be much higher.
The report highlights actions that both Federal agencies and Congress can take to strengthen fraud risk management practices across the government, based on GAO’s previous work.
“The heightened fraud risks and prevalence of fraud in various relief programs during the COVID-19 pandemic underscore the imperative for Federal agencies to manage fraud risks strategically,” the report says. “This report highlights areas where our prior work has shown that Federal agencies and Congress can improve fraud risk management efforts.”
GAO has recently made several recommendations to agencies regarding UI fraud, including the Department of Labor (DoL). For example, the government watchdog said DoL still needs to develop an antifraud strategy based on leading practices in GAO’s Fraud Risk Framework – as required by law.
From July 2015 through December 2022, GAO made 142 recommendations to over 40 agency or program offices. These recommendations related to one or more of the five key areas GAO identified in which Federal agencies need to take additional actions to ensure they are effectively managing fraud risks, consistent with the Fraud Risk Framework.
As of January 2023, GAO said 74 of the recommendations had not been fully implemented. While the report does not offer new recommendations, it highlights the five areas in which agencies should take action.
These five areas include: designating an entity to lead fraud risk management, assessing fraud risks, designing and implementing an antifraud strategy, using data analytics to manage fraud risks, and managing fraud risks in emergencies.
Additionally, GAO outlines two actions that Congress can take to help improve Federal agencies’ fraud risk management efforts across the five areas.
The first action is to reinstate the requirement for agencies to report on their antifraud controls and fraud risk management efforts in agency financial reports.
The second is to establish a permanent analytics center of excellence to aid the oversight community in identifying improper payments and fraud.
“Without permanent government-wide analytics capabilities to assist the oversight community, agencies will have limited resources to apply to non-pandemic programs to ensure robust financial stewardship, as well as to better prepare for applying fundamental financial and fraud risk management practices to future emergency funding,” the report says.
The two congressional matters also remained open as of January 2023.