In its February newsletter, HUD’s Office of Community Planning and Development (CPD) highlighted the topic of Fraud, Waste, and Abuse (FWA), covering key topics such as whistleblower rights and methods to identify and report potential fraud. As stewards of taxpayer funds, all federal grantees have the responsibility to impede, identify, and address any suspected or known acts of fraud, waste, abuse, or mismanagement to ensure proper and efficient use of federal funding.
What is Fraud, Waste, and Abuse?
Fraud
Fraud involves intentional deception or misrepresentation to obtain something of value. In the context of federally funded programs, fraud could occur when individuals or entities provide false information or engage in deceptive practices to receive grant funds. This may include misrepresenting the extent of damage, inflating costs, or submitting fictitious documents.
Waste
Waste refers to the inefficient use or squandering of resources. In federally funded programs, waste could occur if funds are used improperly or if there is unnecessary spending that does not contribute to the program’s objectives. This might include unnecessary administrative expenses, duplication of efforts, or inefficient allocation of resources.
Abuse
Abuse involves actions that are inconsistent with acceptable business or program practices but may not necessarily involve intentional deception. In the context of federally funded programs, abuse could occur through mismanagement, excessive spending, or violations of program policies that do not align with the intended purpose of the funds.
HUD’s Office of Inspector General (OIG) identified the most common examples of fraud that occur during disaster programs. They are:
Embezzlement and Theft
Misappropriation of cash or assets in HUD programs, ranging from straightforward cash theft to sophisticated methods like falsifying invoices and misusing credit cards.
Bribery and Kickbacks
Bidders offering officials money for grants (bribery) or officials requiring funds from bidders to secure contracts (kickbacks).
Identity Theft
Unauthorized acquisition or creation of identities by program administrators and others to fraudulently obtain HUD-funded benefits.
Contracting and Procurement Fraud
Fraudulent activities involving procurement officials and bidders, including false certifications, bid rigging, phantom bids, false information on proposals, misuse of federal funds, double-billing, falsification of data, change order abuses, material substitution, misrepresentation of project status, and overcharging.
Conflicts of Interest
Abuse of authority by individuals in positions of trust to favor undisclosed businesses, family, or associates in contract and benefit allocation.
Social Media Scams
Deceptive schemes using websites and social media platforms to solicit money under false pretenses for HUD benefits, grants, or contracts, often posing as government representatives or HUD agents.
How Does HORNE Help Entities Combat Fraud, Waste, and Abuse?
HORNE assists our client in addressing fraud, waste, and abuse by implementing a multi-faceted approach to safeguard our clients and their programs.
Advisory Services and Solutions Delivery
We educate the client on recognizing signs of fraudulent activity and implementing the appropriate measures to prevent it, while also navigating changing and evolving federal guidance.
Comprehensive Guidelines and SOP’s
We assist our clients with establishing clear and comprehensive guidelines, as well as policies and procedures—the existence of a policy itself functions as a deterrent—for the use of their federal funds, detailing eligible expenses and the proper procedures for application, reporting, processing, and internal controls.
Oversight and Monitoring
We help our clients design and implement robust oversight and monitoring mechanisms to track the use of funds, ensure compliance with regulations, and identify any irregularities.
Whistleblower Protection
We work with our clients to establish mechanisms that encourage individuals to report any suspected fraudulent or abusive activities, with protections for whistleblowers.
Training and Awareness
HORNE provides training and guidance to stakeholders involved in the program to raise awareness about potential FWA risks and the importance of compliance.
Addressing Fraud, Waste, and Abuse is critical to maintaining public trust in government programs and ensuring that resources are used effectively to support disaster recovery efforts. HORNE ensures that our clients maintain a high standard of integrity and effectiveness in the management of their federally funded programs. This in turn maximizes the impact of these resources for the benefit of communities and individuals who are most in need.
To learn more about Fraud, Waste, and Abuse, and ways HORNE may be able to assist your organization, please contact us here.
