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Chapters:

3.21 Grant Fraud, Waste, and Abuse

Ways to Reduce the Risk of Fraud

There are several things that you can do to reduce or even eliminate the risk of fraudulent use of your Federal award:

  • Examine your operations and internal controls to identify your fraud vulnerabilities.
  • Implement specific fraud prevention strategies including educating others about the risks. The more people are aware of the issues, the more they can help prevent problems or detect them as early as possible.
  • Maintain a well-designed and -tested system of internal controls.
  • Ensure all financial or other certifications and progress reports are adequately supported with appropriate documentation and evidence.
  • Identify any potential conflict-of-interest issues and disclose them to the awarding agency for specific guidance and advice.
  • Follow a fair and transparent procurement process, especially when using consultants. Ensure that the rate of pay is reasonable and justifiable, and that the work product is well-defined and documented.

Contact the DOJ Office of the Inspector General for more information.

information iconFinancial Management Tip

Information on designing and testing internal controls may be found in the following references:

  • A-133 Compliance Supplement, Part 6, Internal Control, http://www.whitehouse.gov/omb/circulars_default/, (updated annually).
  • OMB Circular, A123, Management’s Responsibility for Internal Control, http://www.whitehouse.gov/omb/circulars_default/, (although this is written for Federal Agencies, its guidance on internal control systems and testing those systems may be a useful reference resource).
  • Committee of Sponsoring Organizations of the Treadway Commission (COSO), http://www.coso.org/IC.htm, (this site has guidance available on internal control framework and testing and has been designed for the private sector, but may be a useful reference resource).