TheCorporateCounsel.net

John blogged earlier this month about the governance implications of the DOJ’s fraud enforcement initiatives. A report issued last week by the U.S. Government Accountability Office signals that federal agencies’ focus on fraud is not going to diminish anytime soon. Here’s why:

No area of the federal government is immune to fraud. We estimated that the federal government could lose between $233 billion and $521 billion annually to fraud.

Given the scope of this problem, a government-wide approach is required to address it. The Office of Management and Budget, working with agencies and the oversight community, should develop guidance to improve fraud-related data—providing a more uniform approach to what data is collected and how.

Also, Treasury should identify methods to expand government-wide estimates of fraud—prioritizing higher-risk program areas.

The GAO made several recommendations and is tracking progress on its fraud risk management page.

When it comes to Artificial Intelligence, the report notes:

Artificial Intelligence Creates Opportunities for Improved Fraud Detection but Also for Fraud. We have previously reported that artificial intelligence has created opportunities for improved oversight and fraud detection. Artificial intelligence can use algorithms and models to reveal anomalous patterns, behaviors, and relationships—with speed, at scale, and in depth—that was not possible previously. Despite these opportunities, artificial intelligence can also pose new risks to agencies and others, such as by creating fake images to assist with developing falsified documentation or to create fake audio to assist in impersonation schemes.

This might be “food for thought” for companies that are considering their own AI risk profiles – and risk factor disclosures.

– Liz Dunshee