USAID Government Accountability Initiative Supports State Audit Institution to Strengthen Prevention and Detection of the Risk of Fraud in Government Spending
June 25, 2021
An Association of Certified Fraud Examiners study in 2020 found that 50% of fraud committed in the workplace results from an override or lack of effective internal controls in institutions. Studies also indicate that once government funds are misspent or misappropriated, they become very difficult to recover. Preventing fraudulent use of funds by ensuring appropriate implementation of internal controls helps government avoid the “pay and chase” scenarios that are a pervasive result of corruption.
GAI is addressing weaknesses in government internal control environments by enhancing the State Audit Institution’s (SAI) use of fraud risk assessment strategies in auditing. Mr. Stephen Lord, a principal author of US Government Accountability Office Framework for Managing Fraud Risks in Federal Programs, delivered trainings from June 15-17 and June 21-23 in Belgrade to senior SAI auditors from Belgrade, and Nis, Novi Sad and Kragujevac regional offices.
The trainings were designed to improve SAI’s utilization of the fraud risk framework to assess, mitigate, and implement auditees’ policies, processes, and practices to combat risk of fraud in government spending. Participants discussed the most common “red flags” for fraudulent acts in areas such of public procurement, and international audit standards for implementing an internal control environment. Enhancing auditors’ application of fraud risk management principles will enable development of evidence for more targeted report findings and recommendations to strengthen internal controls and minimize fraud, waste, and abuse in government-funded programs.