Post-2024 election discussions highlight the need for greater government efficiency and expanded oversight, as fraud, waste & abuse remain critical issues despite the proven successes of government inspectors general
alls for increases in government efficiency have risen following the 2024 presidential election in the United States, with President-Elect Donald Trump tapping tech industry leaders to co-manage the proposed Department of Government Efficiency, which would aim to shrink the federal government, reduce expenditures, and slash regulations, as well as removing individuals involved in government waste.
The proposed agency taps into the frustrations held by many Americans when dealing with the federal government. The current model of an Office of Inspector General, well-implemented at the federal level, could be more broadly adopted at the state level to address these sentiments.
Government waste is defined as improper or careless spending of government money, whereas abuse is defined as intentional, wrongful, or improper use or destruction of government resources which then cost taxpayer money. Waste and abuse are not always illegal behaviors, but they can harm the public perception of taxpayer-funded agencies.
Fraud, one the other hand, is always illegal and involves individuals receive government-provided financial benefits or payments to which they are not entitled. Government agencies are in a position to proactively work in order to better prevent fraud and have accountability and reporting measures in place to detect, investigate, and report fraud, waste, and abuse when such incidents do occur.
Efficiency and expediency can create fraud opportunities
Efficiency is currently the most important measure for agency success and the key focus for many government agencies at this time, according to the Thomson Reuters Institute’s 2024 Government Fraud Waste & Abuse Report which had surveyed government employees across state, local, and federal agencies.
However, this pursuit of efficiency, coupled with a push for expediency in emergency situations, like the global pandemic, can create massive opportunities for fraud, waste, and abuse. These opportunities have been high in recent years with unprecedented levels of emergency resource dollars distributed to communities during and following the Covid-19 pandemic. Indeed, the U.S. Internal Revenue Service reported earlier this year that more than 350 individuals have been sentenced to federal prison and nearly $8.9 billion in federal fraud has been investigated since 2020.
The U.S. Department of the Treasury, in an expedited effort to release stimulus checks during the first few months of the COVID-19 pandemic, sent out more than $1.4 billion in payments to deceased individuals. Procedural changes were then made in 2023 to grant Treasury cross-agency access to the Social Security Administration’s death master file, ensuring that agencies cross-reference databases to determine eligibility prior to fund remittance. Further, the Biden-era Inflation Reduction Act has enabled agencies including the IRS to audit large partnerships and to ramp up hiring of accountants.
Who is responsible for leading internal government investigations?
Earlier this year, Essex County, N.J. made headlines when it was discovered that millions of dollars were awarded through emergency pandemic-era contracts for a county-level Covid-19 vaccination program. A lack of competitive bidding processes cost taxpayers’ money, and the no-bid contracts did not receive the standard measures of scrutiny by elected officials. Further, a lack of accountability for time-tracking and the accounts payable processes led to release of fraudulent payments.
Similarly, the State of Delaware Unemployment Insurance fund was exposed to criminal embezzlement of funds by a high-ranking employee in 2023. A lack of standard accounting practices made auditing the fund particularly challenging, and elected officials in the Delaware State Legislature were frustrated by the state Labor Department’s lack of transparency following the incident.
In New Jersey, the independent Office of Inspector General (OIG) — which is tasked with both detecting fraud, waste, and abuse and promoting efficiency — investigated the government waste in Essex County. However, in the State of Delaware, no such agency exists. Bipartisan legislation on the subject was brought forth earlier this year in the Delaware State Legislature but stalled in the Senate Finance Committee around the cost of creating a new state agency.
Indeed, many state governments have agency-specific OIGs or bundle government investigations through the Office of the Attorney General, but fewer than half of US states appear to have an independent statewide office of this nature. For example, Minnesota Gov. Tim Walz received criticism for a lack of government oversight resulting in fraud in the Minnesota Department of Health Services while Minnesota State Senator Mark Koran has advocated for the creation of an independent OIG for more than five years.
Garnering awareness around OIGs
Creation of a new government agency can be costly and expands the size of government bureaucracy, which means that legislators must weigh the return on investment which comes from forming or maintaining such agencies. However, such OIG divisions saved or detected opportunities for federal agencies to save $70.1 billion in FY 2022, even with an operating budget of just $3.5 billion, which equates to a 20:1 return on investment for every dollar invested into an OIG program, according to the Council of the Inspectors General’s Integrity and Efficiency Annual Report.
Yet, are Americans even aware that organizations such as this council exist? There is arguably room to increase awareness of OIGs at both a state and federal level. The Council of Inspectors General also has operated oversight.gov, a website that explains whistleblowing processes and offers access to public reporting hotlines, since 2017, but it has very limited public presence — in fact, its only social media presence is on X, with an account that was last used in 2020.
Americans may be deeply divided in their views of how broad the scope and size of the federal government should be, but they are united in holding broad, negative perceptions of government as being inefficient and wasteful. Ensuring that type of fraud, waste, and abuse that cost taxpayers money is investigated and addressed is an important step toward reversing these negative perceptions.
You can find more about fraud, waste & abuse in government agencies here.
