Fraud, Waste and Abuse Hotlines

Naval District Washington Fraud, Waste and Abuse Hotline
The Hotline program provides an opportunity for an individual to report significant instances of fraud, waste and mismanagement in the Department of Defense.

Background
Fraud, waste and abuse are serious matters that increase cost to the government, reduce resources for mission accomplishment and contribute to the poor perception and lack of confidence the general public has toward federal employees.

Managers have major roles in preventing fraud, waste and abuse.  Prevention is much more likely when managers establish and fully implement strong management controls.  Managers who are aware of what acts constitute fraud, waste and abuse and are alert for their occurrence can strengthen prevention by educating employees and displaying intolerance toward these acts.

Personnel also have important roles.  Personnel awareness of and intolerance toward fraud, waste and abuse situations are essential to detection and prevention.  The Government Accounting Office reported that more than  half of the known fraud cases in the Navy were detected by employees in the normal course of their duty activities.

Prevention is very important.  After fraud occurs and is detected, recovery of losses in minimal.  The Government Accounting Office reported millions of dollars are lost annually by the federal government as a result of fraud, and more is lost in waste and abuse.  The Government Accounting Office also reported that the federal government recovers less than 20 percent of losses from fraud.  Additional costs result from the time required to report, investigate and correct fraud situations.  The key to minimizing the losses from fraud, therefore, is to prevent it.  This is the responsibility of every individual.

Policy
Navy and Marine Corps personnel are entrusted to maintain and use government funds property and resources solely to serve the American  public, not to serve private or personal interests.  Recognizing that the Department of Navy must have the full faith and confidence of the American people if we are to successfully carry out our mission of national defense, we must take every reasonable precaution to prevent misuse of government funds, property and resources.  To maintain public support for our mission, the people of the United States must trust the institutional integrity of its Naval Forces.  Nothing affects public trust more adversely than acts of fraud, waste and abuse.  If we are to maintain the institutional integrity of the Navy and Marine Corps, than we must support and encourage individual integrity at every level in the chain of command.  Individual integrity is the weapon we will use to combat fraud, waste and abuse, and to carry out our responsibility as good stewards of government resources.

Action
Commanders, Commanding Officers and Programs Managers shall:

Encourage subordinates to use their chain of command.  The Department of Defense and Navy Inspector General Hotline Programs were established to strengthen efforts to combat fraud, waste and abuse, but it is not intended as a substitute for the chain of command.

Hold managers and supervisors accountable for prevention, detection and correction of incidents of fraud, waste and abuse.

Fraud Tips
It's a fact!  Most fraud schemes are uncovered by accident, and usually not during a regular audit.  For that reason, it is important that certain aspects of good internal control be adopted wherever possible.  For example, the ability to authorize the recording of changes to the value of assets in the financial records, and physical access to these same assets, should not be vested with the same individual.

Have someone in authority high up in the organization, preferably the program manager, to receive directly the unopened bank statements.  Inspect the payee names and endorsements.  Look for multiple endorsements and  unusual payees, particularly variations of legitimate vendor names.  Have someone who is independent of the cash disbursement function periodically trace all cancelled checks to the check register and vice versa.  Follow up on all reconciling items on the bank reconciliation, however minor.

Discuss issues of internal control with your internal audit staff.
                                (courtesty of fraud detectives consultant network)