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State auditor: More than $8 million in public benefit fraud identified last year

Boston Herald

The state Auditor's Bureau of Special Investigations found 490 cases totaling $8.16 million in public assistance fraud in the last year, according to a report released Thursday. With 241 cases, Hampden was the county in which State Auditor Suzanne M. Bump's office identified the most cases of fraud in Fiscal Year 2020. "In Massachusetts, we recognize the value of a strong social safety net to help people put food on the table, access medical care and more. While fraud makes up a small portion of total public assistance spending, it has a disproportionate negative impact on public trust in these programs," Bump said in a statement. "At a time when more people are relying on this assistance because of economic hardships, my office remains committed to ensuring these programs are run with integrity and fraud is quickly identified and stopped."

California failed to heed warnings of unemployment benefit fraud for months, state audit says

Los Angeles Times

California officials in charge of the state's unemployment benefits system failed for months to heed warnings of widespread claims fraud during the COVID-19 pandemic, resulting in billions of dollars paid out on fraudulent claims, a state audit said Thursday. The report by State Auditor Elaine Howle said at least $10.4 billion in fraud has been identified on the first $112 billion in benefits paid since the pandemic began. But more claims have been paid since the audit was finalized -- the number is now $114 billion-- so officials of the state Employment Development Department said earlier this week they now have confirmed more than $11 billion in fraud, and are investigating $19 billion in other, suspicious claims for potential fraud. "EDD did not take substantive action to bolster its fraud detection efforts for its [unemployment insurance] program until months into the pandemic," Howle wrote to the governor and Legislature. "Specifically, EDD waited about four months to automate a key anti-fraud measure, took incomplete action against claims filed from suspicious addresses, and removed a key safeguard against improper payments without fully understanding the significance of the safeguard."

Minnesota probe finds no proof stolen money aided terrorists

FOX News

Lawmakers asked Legislative Auditor James Nobles to look into the issue after KMSP-TV reported last year that the Minnesota Child Care Assistance Program was defrauded out of as much as $100 million per year. The station, partly citing unnamed sources, also reported that state and federal agents had determined that some of the ill-gotten money had gone overseas and that they believed at least some of it likely ended up with terrorists. The station's reports, which also cited Scott Stillman, a former computer forensics expert for the state Department of Human Services, which administers the program, suggested that fraudulently obtained money had gone to the Somali-based terrorist group al-Shabab. In his report, Nobles said investigators couldn't substantiate that any of the money ended up with terrorists. He also said that while fraud in the child care program is a problem, investigators couldn't establish a reliable estimate of how much money has been defrauded from it, though they believe it's more than the $5 million to $6 million that prosecutors have been able to prove was stolen.

Artificial Neural Networks and Case-Based Reasoning Systems for Auditing

AITopics Original Links

Audit sampling is selecting a group of items such as invoices for investigation to draw inferences about an account balance. Ratio analysis involves comparisons between two financial statement accounts such as current ratios and gross profit percentage. Reasonable tests involve using financial and nonfinancial data to estimate an account balance. An example would be multiplying items sold by price to determine expected revenue. However, there are audit engagement risks with current auditing techniques.

California lawmakers angrily demand fixes at unemployment agency after scathing audits

Los Angeles Times

California lawmakers on Wednesday demanded quick fixes to the state unemployment benefits system a week after two scathing state audits found poor planning and ineffective management caused significant delays in payments to people left jobless during the COVID-19 pandemic. The calls for swift action during a state Capitol oversight hearing came as many officials are also sounding the alarm that Californians whose identities were stolen as part of unemployment fraud schemes will need immediate help from the state Employment Development Department to avoid tax liability on the benefits wrongly paid to others in their names. More than a dozen lawmakers from both houses participated in Wednesday's four-hour hearing by the Joint Legislative Audit and Assembly Insurance committees, at which State Auditor Elaine Howle outlined problems identified by her audits of the EDD. Assemblyman Rudy Salas (D-Bakersfield), chairman of the audit committee, called the findings "disturbing." "Californians are frustrated, they are infuriated, they are fed up. They want a system that works for them," Salas said during the hearing.