What You Need to Know about FraudNet

Fraudulent spending, waste, abuse, or mismanagement of federal funds erodes public trust in government. Since 1979, GAO has provided an outlet for anyone—federal employees, contractors, or members of the general public—to report allegations of such activities. FraudNet offers ways for anonymous citizens to get sensitive information to the people who are trained

1. to protect that information from unauthorized disclosure, and
2. to use that information to fight fraud.

See this video for more on how to report allegations to FraudNet. History of FraudNet In 1979, we established the GAO Fraud Hotline, a toll-free telephone number. In 1996, we expanded the program to receive allegations via the Internet, fax, and letter. At that time, the program was renamed “FraudNet” to reflect that expansion. How does it work? Upon receiving allegations, FraudNet staff and investigators from our Forensic Audits and Investigative Service team analyze and research the allegations. If they find that further investigation is warranted, FraudNet staff assign a case number and determine whether to refer that allegation to the relevant executive-branch agency, typically an Office of Inspector General (IG), or to pursue the allegation within GAO. FraudNet staff can use LexisNexis investigative tools and resources from the National Crime Information Center (the nation’s clearinghouse for crime-related data) to follow up on allegations. What kinds of allegations does FraudNet receive? FraudNet has received an average of 1,850 allegations a year over the past 5 years. About 80% of the allegations received in fiscal year 2013 received a case number for further investigation, and below is a breakdown of the types of allegations in those cases. As you can see, most of the allegations are about government mismanagement and waste: FraudNet in Action FraudNet’s work has contributed to executive branch IG and GAO audits and investigations. For example:

• FraudNet referred 3 cases to the Small Business Administration’s (SBA) IG. In these cases, contractors falsified information to gain access to programs intended to benefit service-disabled veterans and businesses located in historically underused business zones. Consequently, four companies that had received $11 million in contracts pled guilty to charges including wire fraud and misrepresentation.
• FraudNet staff performed substantial research that tracked registered sex offenders leaving and entering the United States. One of the recommendations from GAO’s report helped Immigration and Customs Enforcement and INTERPOL’s U.S. National Central Bureau share data to monitor sex offenders’ international travel.
• FraudNet staff provided GAO with information about people who applied for passports using the identities of dead or jailed individuals, as well as those with active felony warrants. In the course of completing the report, GAO referred some high-risk cases to the Department of State, which may help them strengthen the integrity of the passport program.
• FraudNet received allegations regarding potential fraud and abuse in the National School Lunch Program. GAO’s work following up on these allegations led to recommendations in a GAO report for improving integrity and oversight of the school-meals programs.

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