Agencies get new IT fraud prevention tool

The board overseeing economic stimulus funding under a 2009 law is now offering to apply its sophisticated early-warning fraud-prevention tools on behalf of other federal agencies. The tools warn of potential high-risk payments beyond the scope of the stimulus law.

The goal of the technology offered by the Recovery Accountability & Transparency Board is to help identify possibly fraudulent actors for a broader range of federal programs, Michael Wood, executive director, said at a House subcommittee hearing on Feb. 7.

The Recovery Board was created in 2009 to oversee and provide transparency for payments made under the $860 billion stimulus law.

The board currently is conducting pilot programs with several federal agencies and inspectors general to help them leverage the board’s experience with advanced fraud-prevention technologies, Wood said. The tools include government databases, software and open source information to identify high-risk recipients of government funds, ideally before the payments are made.

One of the newest tools is FastAlert, which is software to identify irregularities in payments and identify possible fraud before a payment is made. The pilots are being conducted with agency procurement, grant and financial enforcement officials. They cover pre-award and payment phases.

The board is offering its in-depth fraud analysis capability to agencies governmentwide in the FirstAlert program to warn them of potentially fraudulent transactions, Wood told the House Oversight and Government Reform Subcommittee on Government Operations, Efficiency and Financial Management.

The oversight board aims to help other agencies perform their own risk evaluations before making payments, and also to help enforcement officials detect fraud after the payments are made, he said. The capability is being provided through the FederalAccountability.gov limited-access website.

“With our expanded 2012 appropriations language, Congress provided some flexibility for us to develop and test new applications on non-Recovery funds and we plan on broadening the scope of those pilots,” Wood said.

In a previous blog statement, Wood described FastAlert as an early warning system information technology tool that the board hopes to make available to all federal agencies.

“Once logged into FederalAccountability.gov, government users can request information on Recovery recipients or those seeking funds,” Wood wrote in a Jan. 19 blog posting. “Information contained in the request is run through the ROC databases. If there are problems, such as criminal records, bankruptcies or past contract problems with the government, ROC analysts forward an alert immediately to the requesting agency or IG.”

An alert should not be viewed as a recommendation for a particular action, he added.

“The board is not telling agencies what to do. When we issue an alert, we are throwing up a caution flag—take care, we are saying, before handing out that contract. Bottom line: FastAlert can be used throughout the lifecycle of an award and will reduce fraud and improper payments, saving taxpayers money,” Wood wrote in the blog.