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Daily Fraud Fact: Fraud Costs Us All


Governments are frequent victims of fraud.

According to the Association of Certified Fraud Examiners (ACFE) 2016 Report to the Nations on Occupational Fraud and Abuse, governments are often victimized by fraud, second only to the banking and financial services industry.

Fraud against government is an expensive burden.

Employees, taxpayers, and businesses all suffer when government fraud occurs. The ACFE projects the median loss per fraud is about $150,000, with 23% of all reported fraud cases causing losses of $1 million or more. Fraud against government entities can results in:

  • Loss of public funds and resources
  • Diversion of resources to investigate and remediate/li>
  • Increased cost of government services
  • Increased fees or taxes
  • Expense associated with the prosecution and incarceration of convicted fraudsters

Fraud also creates non-financial consequences.

Beyond the financial consequences, fraud can also be devastating to a government organization’s mission and employees. Non-financial consequences of fraud can include:

  • Negative news and bad publicity
  • Decreased confidence in public officials
  • Increased scrutiny and/or sanctions
  • Inability to meet organizational goals
  • Less money available for government operations
  • Reputation loss
  • Low employee morale

Fraud prevention is best.

Prevention is the most efficient and effective means for fighting fraud. Good fraud prevention includes increasing employee awareness of fraud and its consequences. Fighting fraud is everyone’s responsibility!

Check back tomorrow when we will talk about the conditions generally present when fraud occurs.

Thanks for your commitment to helping prevent fraud in Minnesota State Government.

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