FraudNET is a government-wide fraud hotline operated by the U.S. Government Accountability Office (GAO) to enable people to report wrongdoing involving federal funds. It is part of the GAO Forensic Audits and Special Investigations (FSI) unit, which has a mission to, among other things:

• operate an automated means that anyone may use to report allegations of fraud, waste, abuse, or mismanagement of federal funds;
• refer those allegations to the Inspector General (IG) of the cognizant federal agency;
• review IG responses to allegations referred by GAO; and
• provide information to federal, state, and local organizations about establishing their own hotlines.

The GAO has a long history with fraud reporting mechanisms.  It created the telephone-based, toll-free GAO Fraud Hotline in 1979, a relatively early year for a hotline service of its kind. The fraud hotline served as a model for other executive branch agency hotlines. In 1988 testimony to Congress, the U.S. Comptroller General stated that due to the successful implementation of other government hotline operations, there was a reduction in calls to the GAO hotline, leading to some changes in procedure at the time. Changes continued as technology changed; in 1996, the internet-based FraudNET was created, to provide a more efficient use of GAO resources. 

Today FraudNET offers people five ways to report: by web-based form, by toll-free fraud hotline, by fax, by email, and by mail. Reportedly, FraudNET receives hundreds of anonymous tips every year; a number of those tips lead to improvements in government operations, changes in the law, and sometimes criminal prosecutions.

As with many corporate ethics hotlines, the GAO permits individuals to provide information anonymously, although it prefers that those using FraudNET provide contact information for FSI analysts, in case more information is needed.  Its confidentiality policy states “The FraudNET policy is to honor requests for confidentiality and not to release information that would identify such individuals unless required to do so by subpoena. This has never occurred in the history of the GAO FraudNET.”

The importance of confidentiality for ethics and fraud hotline operations is a given today and it was emphasized during the 1988 testimony to Congress mentioned earlier. The  Comptroller General’s testimony identified six “necessary elements” for a successful hotline.

• A clear statement of the hotline’s mission and objectives;
• Staff with interview skills and program knowledge, in sufficient numbers to handle call volume;
• Controls to protect the confidentiality of callers;
• Internal guidelines to evaluate and classify allegations received through calls or letters;
• Policy that inquiries into the allegations are performed by independent and qualified personnel; and
• Procedures to monitor cases to assure they are being handled and resolved properly.

Those elements hold true today and are as relevant for a corporate ethics hotline as for the GAO’s FraudNET.

Ethical Advocate provides confidential and anonymous hotlines and other ethics and compliance solutions. Contact us for more information.

References:

GAO. FraudNet/Reporting Fraud website, http://www.gao.gov/fraudnet/fraudnet.htm

GAO. “GAO Fraud Hotline”, Statement of Charles A. Bowsher, Comptroller General of the United States, 1988.