No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Featured

4 Ways to Fight U.S. Stimulus Fund Fraud During a Pandemic “Perfect Storm”

Companies Should Expect Fraud Associated with Relief Funding

by Don Fancher
August 27, 2020
in Featured, Fraud
gag with dollar symbol and protection shield

Organizations that have received stimulus funding may be at significant risk for fraud, waste and abuse related to that funding. Deloitte’s Don Fancher offers guidance on how to combat that activity.

As most compliance, finance and risk professionals know, economic volatility and major disruption can create a “perfect storm” for bad actors looking for opportunities to take advantage of others. As U.S. economic stimulus funding creates an influx of money globally, bad actors have already begun to pounce and will likely continue to do so. Further, as closer attention is paid to organization financials in advance of stimulus funding awards or as the result of the current economic downturn, existing fraudulent activity is likely to be exposed.

With new and different money flowing in and out of an organization, preparing for an uptick in fraud schemes may be wise.

In fact, 51.3 percent of over 1,200 C-suite and other executives participating in a recent online poll said they expect fraud, waste and abuse schemes to increase in the next 12 months. When it comes to economic stimulus awards, the financial schemes those polled executives expect to see include improper payments (39.5 percent), financial reporting and disclosure fraud (15.2 percent), embezzlement (14.9 percent) and corruption and kickbacks (10.8 percent).

Most U.S. stimulus funding, like the CARES Act for example, comes with new regulatory compliance rules and regulators to enforce them. The government oversight and regulatory enforcement measures put into place around new U.S. stimulus funding closely mirrors that of the 2008-signed Troubled Asset Relief Program (TARP), meaning vigorous enforcement by multiple government entities is expected — and it’s expected to last many years.

But what can organizations do to reduce the risk they fall victim to such schemes? Being proactive is key. A lack of focus on prevention can lead to challenges during remediation following the identification of financial crime—and those challenges may be greater when stimulus funding is involved. Organizations receiving stimulus funding must maintain continued compliance and requirements set forth, or face significant consequences from regulators.

To this end, organizations should strongly consider the following actions when trying to curb fraud, waste and abuse schemes:

1. Implement Fraud Risk Assessment and Monitoring Programs

It is better to be proactive rather than reactive when monitoring for financial crimes. In today’s environment, as employees, vendors, supply chains and more work remotely, technologies such as data analytics can help monitor for these risks. While fraud risk assessment and monitoring programs typically require investment, they can often offer returns in the form of a reduction in inappropriate spend and corruption risk, as well as improved prevention and detection of regulatory violations.

2. Enhance Third-Party Due Diligence and Monitoring

Actively monitoring vendors can play a big role in fraud risk prevention anytime, not only during disruption. Conducting background checks, using risk-sensing and employing social media analytics for both new and existing vendors can be helpful even in the best of times. Of course, even after a disruption or crisis subsides, third-party due diligence and monitoring should continue. By comparing behavior patterns before, during and after something like the global COVID-19 pandemic, organizations can help identify new (and ongoing) schemes that may have otherwise gone undetected.

3. Offer Strong Oversight and Support for Current Employees

About 28 percent of polled executives mentioned earlier said they believe current employees pose the largest risk in terms of fraud, waste and abuse schemes perpetrated against organizations awarded economic stimulus funding. To help combat the possibility of employee financial crime, leadership would be well advised to begin or repeat employee training around fraud management in general – but also around U.S. stimulus funding fraud. Beyond training, playbooks with clearly defined processes and controls for stimulus funding, as well as all fraud, waste and abuse prevention and detection, can be a great employee reference tool. And, of course, tone at the top is invaluable in relaying to employees that leadership attention is being paid to proper use of company funding — whether it is government-provided or not.

4. Combat Unknown Bad Actors (Or Those with No Vendor or Employee Ties)

There are bad actors within many organizations, but there are also bad actors who are complete strangers to those organizations. In the aforementioned executive poll, nearly one-quarter of respondents expected individuals with no employee or vendor ties to perpetrate fraud, waste and abuse schemes against organizations awarded stimulus funding. These unknown parties can be detected and sometimes deterred when strong monitoring programs are in place. Again, specifically targeted analytics can help identify anomalous behaviors to help improve future monitoring efforts.

Though the “perfect storm” for financial crime is upon us, organizations can weather fraud, waste and abuse schemes in the wake of economic volatility and major disruption by taking proactive steps today to reduce later possible challenges.


Tags: COVID-19Due DiligenceMonitoringRisk Assessment
Previous Post

The AMLCO, Reputation Risk and AML Scandals

Next Post

Independence of the Compliance Function: A Critical Component of the Three Lines Model

Don Fancher

Don Fancher

Don Fancher is a Deloitte Risk & Financial Advisory principal and global forensic leader at Deloitte Financial Advisory Services LLP. He has more than 30 years of experience assisting clients on matters including forensic investigations, dispute consulting, intellectual property services and reorganization services. Don has also testified as an expert witness on numerous occasions in federal, state and bankruptcy courts.

Related Posts

nyse bell 1956

Inside the IPO Process: What It’s Really Like to Go Public

by Megan Penick
May 17, 2023

Ringing the opening bell on the Nasdaq or NYSE floor represents the culmination of a long and potentially risky IPO...

real time

Real-Time Risk Management Isn’t Optional Anymore

by Tracy Manning
May 10, 2023

Today’s compliance teams are dealing with a difficult confluence of challenges. Budgets and resources are facing extra scrutiny at the...

bank swaps final

From the Villain to the Hero: How Rate Swaps Could Have Prevented Latest Banking Crisis

by Howard Mulligan
May 3, 2023

It’s been the better part of two decades since a relatively common risk management mechanism — an interest rate swap...

rose colored glasses

Are You Wearing Rose-Colored Glasses — or Blinders? How Executives’ Views on Cyber Risk Can Affect Compliance

by Meghan Maneval
April 26, 2023

Changes to digital spaces in recent years have led to a sharp rise in IT risk for many organizations. With...

Next Post
illustration of businesswoman with superhero shadow

Independence of the Compliance Function: A Critical Component of the Three Lines Model

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment Sanctions SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT