Fraud Hotline Growth in the Public Sector

According to the 2008 National Government Ethics Survey, fraud is as common in government as in the private sector.  Nearly 60% of surveyed government employees see misconduct in the workplace, 30% of observed misconduct goes unreported to management, 25% of all government employees work in an environment that is conducive to or invites misconduct, including perceived pressures to commit an ethics or compliance violation in order to do their jobs.

In the private sector, small business takes a disproportional hit on a per incident fraud basis.  According to the ACFE, this is caused by a lack of business controls and anti-fraud processes relative to large organizations.  Corresponding statistics that compare per incident fraud in large government agencies versus small government organizations do not exist.  However, the reason for the disproportional hit on small business probably applies to smaller government organizations.  In the past, small government organizations had fewer anti-fraud and business controls in place.

So, it’s no surprise that there’s been an increase in small to mid-sized government organizations and city administrations with interest in instituting an anonymous ethics hotline.  The cost of implementing a hotline is low and the benefits are tremendous.  We expect to see continued growth in anti-fraud, business control, and ethics programs in this sector as these organizations implement the best practices in the industry.