Expert Forensic Accountants Assist Local Governments
Certified fraud investigators seek proof of corruption and support responsive litigation
For local government to fulfill its mission, it must be worthy of the public’s trust. Unfortunately, scandals related to the misuse of public funds too often make the local news. Such scandals foment deep suspicions that create resistance to any new program, even those that are essential to serving the public. How you respond to allegations of fraud can make all the difference to your community, and North America Forensic Accounting is ready to help. Our firm is comprised of experts in fraud investigation. We draw on decades of experience to help local governments pinpoint where fraud has occurred, and we provide the evidence they need to hold wrongdoers accountable. After the crisis is passed, we can help various departments identify vulnerabilities and reform their procedures to minimize risk. Local governments make do with small staffs and limited budgets, but NAFA can train your people in cost-effective best practices that deliver results with minimal expenditure.
Why local governments are susceptible to fraud
Most of us have a much more favorable impression of our local civil servants than we do of officials on the state and federal level. This is especially true when we live in a small town and have personal contact with elected officials. We tend to trust that folks who live in our community want to do what is right for our hometown. Unfortunately, studies have shown that local governments are very vulnerable to fraud for a number of reasons. One of the most common vulnerabilities comes from a local government’s inherent lack of resources, which can cause issues with separating cash handling, authorization and recording duties. This can result in situations where a single individual will have the ability to cover up their own theft or misuse of funds.
Limited application of controls in a local government environment often means that agencies do not always follow best practices, which include these five elements:
- Segregation of duties
- Systems of authorizations for transactions
- Independent checks on transactions and records
- Physical security of assets
- Adequate documents and records
The absence of these controls creates a target-rich environment for anyone who is motivated to commit fraud.
The human element in local government fraud
Operating local government on a trust basis increases the opportunity for personnel to commit fraud or embezzlement. Entities become wholly reliant on the character of their personnel to resist any temptation. This reliance too often leads to disappointment for two important reasons:
- Financial pressure — Your personnel may be secretly dealing with enormous financial stress caused by a business failure, failed investments, medical expenses, addiction, gambling, or other factors.
- Rationalizations — Human beings are capable of rationalizing all sorts of deviant behavior. When it comes to committing fraud or embezzling funds, the perpetrator may have resentments against the organization, along with feelings that they haven’t been properly compensated for their loyal service.
Since you can’t read the minds of your personnel, you need to have controls in place to remove temptation and deter fraud.
Expert investigators help local governments address fraud decisively
Our NAFA investigators have spent decades honing their antifraud techniques. We employ sophisticated diagnostics, perform in-depth analyses, and conduct revealing interviews with staff to pinpoint fraudulent activity at any level in your organization. We have experience with employee embezzlement and a wide variety of other fraud schemes affecting government, including:
- Accounts payable and receivable, and mishandling of cash
- Conflicts of interest in grant management, permitting, contract bidding, etc.
- Inventory and asset management
- Misappropriation of funds or assets
- Payroll fraud, including overtime abuse
- Permitting operations
- Procurement and purchasing schemes
- Reimbursement and refund schemes
- Utility operations and utility billing schemes
At NAFA, we are confident that our services can enable your local government agencies to detect where fraud has occurred and take the necessary enforcement steps to punish wrongdoers and assess losses. Our investigators do more than prove the scheme; we calculate losses over the life of the scheme. We support law enforcement and prosecutors with clear, convincing evidence, and even appear as expert witnesses to strengthen your case.
Contact North American Forensic Accounting PC for a variety of local government services
North American Forensic Accounting PC provides a wide range of advanced accounting services for local government agencies, including fraud detection and prevention. Headquartered in Harrisburg, PA, NAFA serves clients throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area. To learn more, call us at 347-286-4860 or contact one of our offices online to schedule an appointment.