Government-Program Fraud: Current Trends and Countermeasures

Government modernization has changed how personal information is collected and shared. The same technology that makes government programs more accessible also creates opportunities for fraudsters to exploit programs in new ways. In the past, individuals applied for government programs through paper applications sent by mail or submitted in person. Paper applications carried their own risks, including forged documents and mail theft. Today, individuals can apply online and submit sensitive information, such as Social Security numbers and banking records, through agency portals.

While digital access can expand a program’s reach, it also increases the speed, scale, and anonymity with which fraud can occur, making effective fraud prevention and detection essential. This article details how government-program fraud is evolving, how agencies are responding, and the long-term impacts.

Key Takeaways

• Stolen and synthetic identities, technology, and artificial intelligence (AI) tools can enable fraudsters to target government programs at greater speed and scale.
• Organized fraud groups continue to use stolen data, technology, and program knowledge to carry out schemes that can span programs and jurisdictions.
• Fraud risk assessments can help agencies identify how programs could be exploited, evaluate existing controls, and determine where additional safeguards may be needed.

• The consequences of fraud extend beyond financial losses, affecting agencies, public trust, and the people and communities government programs are designed to serve.

How Government-Program Fraud Is Evolving

Government agencies continue to modernize their systems, but fraudsters adapt quickly. Fragmented data, system limitations, and control gaps can still create opportunities for fraud. Technology has expanded the ways fraudsters can exploit program vulnerabilities. Stolen credentials, synthetic identities, automated tools, and organized networks can enable fraudulent activity at greater speed and scale.

What Are the Current Fraud Trends?

• Stolen or synthetic identities: Fraudsters use stolen personal information or create synthetic identities by combining real and fabricated information to obtain or redirect government funds and benefits.
• Organized fraud networks: Organized groups have defrauded government programs, as the COVID-19 pandemic showed, and they remain a continuing threat. They use technology, program knowledge, and coordinated participants to commit fraud at scale. These networks can operate across programs and jurisdictions, making it harder to connect related fraudulent activity when programs or transactions are reviewed in isolation.
• Exploitation of rapid-disbursement programs: Fraudsters may target emergency and relief programs, particularly when new programs, eligibility requirements, or controls must be implemented quickly.
• AI-enabled fraud: Fraudsters use AI to create convincing false documents, images, and other content that can make fraudulent activity more difficult to detect.

How Agencies Are Responding

Agencies continue to develop new approaches to combat fraud, while the Government Accountability Office (GAO), Congress’s independent audit and evaluation agency, monitors federal fraud risks and assesses agencies’ efforts to strengthen program integrity. GAO recently released Combating Fraud: Managing Risks in Federally Funded, State-Administered Programs, which highlights fraud risks, common vulnerabilities, and leading practices for fraud risk management.

The report also reinforces GAO’s Fraud Risk Framework, a leading resource for agencies seeking to prevent, detect, and respond to fraud. Fraud risk assessments are a critical part of this approach, helping agencies identify where and how a program could be exploited, determine whether existing controls address those risks, and identify where additional safeguards may be needed.

Government agencies are also strengthening efforts to prevent fraud before funds are disbursed. The Bureau of the Fiscal Service operates the Do Not Pay program to reduce fraud and improper payments. Do Not Pay allows federal agencies and states administering federally funded programs to verify a recipient’s identity and eligibility before making an award or issuing a payment. In fiscal year 2025, Treasury reported that Treasury and Do Not Pay helped agencies prevent, detect, and recover $11.7 billion in potential fraud and improper payments.

Technology is also playing a larger role in fraud prevention and detection. Agencies can use data analytics, risk-based screening, and AI to help identify anomalies and higher-risk activity for further review. These tools are most effective when paired with a clear understanding of the program’s specific fraud risks and controls. When combined with stronger identity verification and cross-agency data sharing, technology can help agencies identify potential fraud earlier and strengthen their responses.

The Long-Term Impact of Government-Program Fraud

Failing to adequately protect against fraud can have significant consequences. Common impacts include:

• Eroded public trust
• Higher program costs
• Withheld or reduced funding
• Potential audit findings and legal exposure
• Data and privacy harm

The impact of fraud extends beyond the immediate financial loss, affecting agencies as well as the people and communities the programs are designed to serve.

Combating Government-Program Fraud with EisnerAmper

Agencies cannot eliminate fraud risk, but they can become better at identifying vulnerabilities, detecting suspicious activity, and responding before losses grow. To strengthen fraud prevention, government agencies should assess fraud risks and system vulnerabilities, implement modern, secure technology backed by strong governance, and reevaluate controls as risks and fraud schemes evolve.  

EisnerAmper's professionals work across risk and compliance, forensic services, and government advisory to help agencies assess fraud risks, strengthen controls, and safeguard public funds and data. To learn more about our services and fraud insights, visit Fraud Risk Management Services or contact our team.