Accountable Government – Stopping Improper Payments by Kimberley Williams.
Kimberly cites a couple of the usual food stamps, unemployment fraud cases to show the need for data integration.
I find it curious that small-fry fraud, food stamps, welfare, unemployment is nearly always cited as the basis for better financial controls in government.
The question that needs to be asked is: What is the ROI for stopping small-fry fraud? Which would need a reliable estimate of fraud versus the expense of better financial controls to stop it. If the expense is greater than the fraud, why bother?
On the other hand, defense contractor fraud may justify data integration and attempts at better financial controls. For example, for the fiscal year 2009, the Defense Criminal Investigative Service recovered $2,077,282,746. That $billions with a B.
That is money recovered, not estimated fraud.
From the following year but just in case you want to personalize the narrative a bit:
A South Carolina defense contractor has agreed to pay the U.S. government more than $1 million to resolve fraud allegations related to a contract with the Defense Department.
U.S. Attorney Bill Nettles said Wednesday the Defense Department paid nearly $435,000 to Columbia-based FN Manufacturing LLC to mentor minority-owned companies. But the government says FN never provided some of the mentoring and contracted out some of theservices, an action that violated the company’s contract.
FN is a subsidiary of FN Herstal of Belgium. The company makes the popular M-16 rifle, which is carried by almost every soldier. (Source: http://www2.wspa.com/news/2010/aug/04/defense-contractor-fined-ar-661483/)
or,
Defense company BAE Systems PLC said yesterday it would pay fines totaling more than $400 million after reaching settlements with Britain’s anti-fraud agency and the U.S. Justice Department to end decades-long corruption investigations into the company.
The world’s No. 2 defense contractor said that under its agreement with Washington, it would plead guilty to one criminal charge of conspiring to make false statements to the U.S. government over regulatory filings in 2000 and 2002. The agreement was subject to court approval, it said.
In Britain, it said it would plead guilty to one charge of breach of duty to keep proper accounting records about payments it made to a former marketing adviser in Tanzania in relation to the sale of a military radar system in 1999.
The bulk of the fines would be paid to the U.S. authorities. In Britain, BAE will be paying penalties of 30 million pounds ($46.9 million), including a charity payment to Tanzania.
BAE said it “regrets the lack of rigor in the past” and “accepts full responsibility for these past shortcomings.” (Source: http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20100206/BIZ/2060310)
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