AGA Fraud 21 – A Brighter Outlook

Regular attendees of the annual Association of Government Accountants (AGA) Internal Control & Fraud Prevention Training may have been struck by the contrasting tone of this year’s event, “Fraud 21,” from the previous year’s — from doom and gloom to hopeful and actionable.

Fraud 20 was marked by the incredibly sobering statistics related to the pandemic, such as those related to massive government spending, fiscal uncertainty, and fraud that was only just starting to come to light. But Fraud 21 was very different. While the complex and weighty issues that were the focus of the conference last year are still very much at the forefront today, the attitude at this year’s event was one of resilience and strength. Fraud 21 consistently emphasized getting ahead of and preventing fraud as much as possible, while leveraging every possible tool to do so. The atmosphere of Fraud 21 was clear: the financial management (FM) community is no longer on the defense, but the offense.

Day One

The opening plenary raised awareness of how deception can impact organizations and what measures can be put into place to detect and prevent fraud. Traci Brown, an author and industry expert in the use of body language to detect deception, was the first keynote speaker. She kept the audience engaged with her ‘liar, liar, pants on fire’ presentation, where she analyzed recent TV interviews and pointed out examples of the body language of interviewees later proven to be lying. Ms. Brown provided key tools and observations to help attendees not fall into the ‘bear trap’ of fraud.

The sessions throughout the first day were filled with outstanding subject matter experts in the fields of fraud prevention and internal controls supporting fraud risk assessment. Although the pandemic was still part of the conversation, the discussion had evolved to show how the pandemic has brought federal, state, and local governments together to combat fraud. Sessions like “Links Between Program Legislation at the Federal, State and Local Levels” allowed the audience to see the connection between the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Paycheck Protection Program (PPP) loans to state and local government, and how they helped with fraud identification and investigation. During this time, state and local governments received a significant increase in federal funding, and receiving guidance from federal partners was key to the successful application of CARES Act and PPP funding.

Another session dealt with the recent revisions to the Office of Management and Budget (OMB) Circular A-123 and how they have impacted federal agencies’ need to be “Moving Beyond Internal Controls over Financial Reporting.” The presenters showed how the OMB Memo M-18-16 highlighted the importance of managing data through data quality plans. As we all know, it can take time for such initiatives to take hold within the federal government; for example, the DATA Act of 2014 is still frequently cited when discussing how data quality and data standards help ensure our financial and operational systems are properly reporting accurate information, which in turn has improved the ability to detect areas of current or potential fraud.

The presenters of “An Exploration of the Prevention and Detection of Fraud, Waste, and Abuse” gave excellent insight into effective methods to help agencies detect and prevent fraud. This session shone a spotlight on how fraudsters take advantage of generational differences when choosing their targets. Real-world examples abound of elderly family members sending money orders to a grandchild in trouble (who had contacted them via email). which turned out to be a phishing scam; or of millennials sending money via an electronic payment app (such as Venmo or Cash App) to a friend, only to realize that the profile name was off by one letter, meaning they had sent their money to a scammer.

Afternoon sessions continued to provide participants with great tools and resources to avoid fraud traps for their organizations. One session went into detail to walk the attendees through payment integrity legislation and processes into expanded use of the Do Not Pay list. This particular session continued the next day to include the expanding payment integrity services and tools that the Department of the Treasury Bureau of the Fiscal Service provides. The presenters not only highlighted the tools but went into further depth by highlighting case studies where fellow federal agencies used these tools to produce actionable results. Fighting improper payments starts with understanding and utilizing all the tools available, and this session adds a substantial number of them to your agency’s toolbox.

Day 2

Juliette Kayyem, former Department of Homeland Security (DHS) official and CNN Analyst on Emergency Management, opened the second day of Fraud 21, sharing her perspective on how managing disasters is no longer random or rare. Her upcoming book, The Devil Never Sleeps, outlines her formula for analyzing how crises unfold. In her terminology, “boom” equates to the crisis; “left of boom” explores prevention and protection before the crisis; and “right of boom” is the response, recovery, and resiliency after the crisis. Her insight into each phase shows how federal and local government agencies and non-governmental organizations (NGOs) approach crises.

The theme of moving from world crises to state and local perspectives was carried into other morning sessions, such as “CARES Act and American Plan Compliance and Auditing.” This session gave participants the opportunity to hear from state officials about how they adapted fraud prevention and detection tools to help support their increased volume of activity and payments at their local level.

Many of the afternoon sessions went into identifying the root causes of fraud, such as looking at payment life cycles and where risk areas exist. Each of these is a great way to connect how today’s fraud and prevention tools are helping across the government sector. The Department of the Treasury, Bureau of the Fiscal Service, and the Payment Integrity Center of Excellence (PICOE) showed how federal agencies are partnering to improve processes to prevent improper payments.

The session, “From Internal Control to Fraud in the Federal Government: From the Old Normal to the New” spoke to how remote and virtual access have become the new normal for testing and evaluation. Access to data logs allows for the ability to evaluate risk in a new light and to have the development of controls to mitigate risk. The new normal heightens the need to understand the fraud triangle of opportunity, rationalization, and pressure with how increased federal funding has escalated and expanded fraud. The presenters spoke to improved cross-agency partnerships to enhance communication and share ideas.

During the final session, reformed cybercriminal, public speaker, and consultant Brett Johnson left the audience wide-eyed as he discussed how much more we need to do to protect ourselves and our institutions against tomorrow’s sophisticated and ever-adapting cybercriminals. Mr. Johnson stated that cybercrime itself is not necessarily sophisticated, but it takes advantage of system weaknesses. He told his personal story of how his criminal activity escalated from performing simple thefts to multi-tiered cyber-crimes, then highlighted other partners in high-profile cyber-crime stories. While it may be overwhelming to think of how easy it is for someone’s identity to be stolen, there are simple steps individuals and agencies can use to prevent and protect their identities. Quick detection, mitigation, and the ability to adjust to threats are key factors; for example, freezing your own credit when there is suspicious activity. Conference attendees left the session with actionable steps to take to protect themselves.

Virtual Booth

Management Concepts staff chatted with hundreds of visitors at our virtual booth and shared information on our newest and upcoming courses in emerging technologies for the FM community, including Robotic Process AutomationCutting-Edge Applications, Information Systems Audit, Data-Driven Technology, and Cloud Applications. These courses are designed to educate FM professionals on how to apply many of the tools that were mentioned during the conference in their day-to-day duties.

Many were also interested in federal financial management instructor opportunities with Management Concepts ― a great opportunity for recently retired federal FM professionals.

Beyond Fraud

We’re looking forward to even more positive developments at next year’s Internal Control & Fraud Prevention Training, and to reconvening with AGA members and friends at the Technology & Transformation Summit on November 18, 2021. See you online!

Find Management Concepts at upcoming AGA events by visiting our AGA event page.

Written by:
Tom Devine
Financial Management



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