The Government Accountability Office has reported that selected federal programs do not consistently incorporate key requirements and leading practices designed to safeguard federal awards—including grants, contracts and loans—from fraud, waste and abuse.
According to a GAO report published Sunday, four of the five programs reviewed—the Department of Commerce’s CHIPS for America Fund, the Environmental Protection Agency’s Greenhouse Gas Reduction Fund, the Department of Health and Human Services’ Health Center Program, and the Department of Energy’s Regional Clean Hydrogen Hubs—did not fully incorporate all nine criteria into their documented policies and procedures. The Federal Communications Commission’s Universal Service Program for Schools and Libraries was the only program that documented procedures addressing all nine requirements.
What Are the Requirements for Safeguarding Federal Awards?
An effective fraud risk management framework should include the following elements:
- A designated office or function responsible for overseeing fraud risk management activities
- Senior leadership oversight, including a body responsible for reviewing, tracking and addressing internal control weaknesses
- Agencywide and program-level risk profiling to identify and prioritize risks
- Assessment of fraud and other program-specific risks
- Defined risk mitigation actions and documented antifraud strategies
- Targeted control activities designed to prevent, deter and detect fraudulent activity
- Collaboration with stakeholders, including partnerships and incentives that support effective antifraud implementation
- Risk-based monitoring and comprehensive assessment of all components of the Fraud Risk Framework
- Evaluation of audit results, including recovery audits and single audit
What Were GAO’s Recommendations?
To address these gaps, GAO recommended that four agencies strengthen and formalize fraud risk management and internal control practices across major federal programs. For the Department of Commerce, GAO suggests documenting the use of recovery audits in the CHIPS for America Fund, while urging the Department of Energy enhance oversight of the Hydrogen Hubs program through documented fraud risk assessments, a formal risk profile, an antifraud strategy and procedures for sharing and monitoring fraud-related information.
The agency also recommended that the Environmental Protection Agency establish a senior management council to oversee internal control deficiencies and that the Department of Health and Human Services finalize fraud risk assessment policies and strengthen oversight of the Health Center Program through documented risk profiles and antifraud strategies.
