Fraud, waste and abuse of taxpayer dollars is a massive problem in the public sector — and it’s only getting worse. Federal agencies set a new record for improper payments last year, shelling out $125 billion in questionable or fraudulent benefits after years of declines, according to the Government Accountability Office. These improper payments include tax credits for families that didn’t qualify, Medicare payments for unnecessary treatments, incorrect unemployment benefits and more. The public sector also sees fraud, waste and abuse taking place in areas like food stamps, banking transactions and unlicensed businesses. Technology solutions can help agencies better identify and reduce fraud, waste and abuse in the public sector. Increasingly, agencies are turning to Esri’s geospatial technology — maps, analysis and geoenrichment — to address blind spots that allow these improper activities to go unnoticed. Esri technology provides a modern, reliable way to quickly detect, analyze and predict patterns of fraud, waste and abuse.
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Reducing Fraud, Waste and Abuse in the Public Sector using GIS
GovLoop and Esri, the global leader in Geographic Information Systems (GIS) technology, have partnered to create this industry perspective. Throughout this report, you’ll learn: • The particular challenges government faces when it comes to addressing fraud, waste and abuse • How GIS and spatial analysis is a critical tool in detecting fraud • Ways several government agencies have used GIS technology to combat waste and abuse • How your organization can turn to GIS to help detect fraud We spoke with Marcella Cavallaro, Esri’s Manager for the National Government Fraud, Waste and Abuse practice, for her insights on how GIS is an effective tool for recognizing and combating fraud.
Challenges in Combating Public Sector Fraud
The rapid growth of government programs
The lack of predictive analytics tools
Government and entitlement programs, like Medicare, are growing at a faster rate than ever. These programs have a mounting number of beneficiaries, which leads to a huge amount of data. With big data comes a need to provide oversight and tools to sort through this information and identify suspicious activities.
In some entitlement and government programs, bad actors can take advantage of program loopholes in fraudulent ways. Now more than ever, the public sector needs advanced predictive analytics tools to get in front of bad actors and stop payments from reaching their hands.
Siloed data
Limited time
Agencies still need to improve coordination and data sharing. Public sector organizations could benefit strongly from having access to the same foundational datasets, such as death records, citations, or violations from other organizations. Government organizations should share this data not only to minimize redundancy, but to more effectively analyze large swaths of information across multiple databases. Without access to foundational data, agencies have an incomplete view of their program, which allows suspicious activity to slip through.
When combating fraud, waste and abuse, the government has one major goal: to mitigate financial losses and recoup money. But agencies only have so much time and resources. Agencies can increase their impact by reducing the time it takes to detect, investigate and prosecute fraudulent activity. To do so, the public sector needs the right tools to move forward efficiently.
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How GIS Works to Combat Fraud GIS technology can be used to help address fraud, waste and abuse in several different ways. Primarily, this is because GIS technology enables organizations to view and analyze their spatial data. When organizations are not leveraging GIS technology, spatial components of data (such as addresses) are not being fully modeled or fully used in predictive models.
Think about it like this: Organizations benefit from closely examining location-based factors to identify hot spots, regional variations and clusters, such as co-locations of services. Then, real-time data analysis shows spatial trends that inform predictions about future needs and issues — or, in this case, fraud. When fraud is detected, spatial models can help users identify locations with similar characteristics — and, presumably, with similar risk of fraud. “When organizations use GIS and include spatial data and indicators in analysis, they improve both their insights and their ability to identify locations that are vulnerable to fraud. This leads them to take swifter action,” Cavallaro said.
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Reducing Fraud, Waste and Abuse in the Public Sector using GIS
Additionally, GIS can be used to visualize historical data to identify and analyze the locations bad actors have targeted in the past. Organizations can use these insights to better understand where those actors are or what locations they might target next. “By combining historical data and current understandings within predictive workflows, organizations can look at where bad actors may be heading next,” said Cavallaro. “Organizations can start to get ahead of the problem, and stop that fraud and abuse from taking place in the future.”
Fraud Waste and Abuse: Reduction in Action Esri’s technology can reveal new trends and patterns in government data by applying a geographic lens to data analysis. Agencies ranging from Louisiana’s Office of Family Support to USDA are already using GIS to reduce fraud, waste and abuse, as shown in the following examples.
State of Louisiana
USDA’s Supplemental Nutrition Assistance Program
Louisiana has more than 600,000 residents receiving food stamps each month. Even though most food stamp recipients are in legitimate need, Louisiana’s Department of Social Services estimates that approximately 4 percent of the funds — a total of $40 million — is fraudulently received or trafficked each year. Louisiana Department of Social Services, Office of Family Support partnered with Esri and Information Builders Inc. on a fraud-detection solution. The solution focused on identifying patterns that reveal fraudulent activity. The department found that by integrating geospatial analysis into the business intelligence platform, users could visually display report data on a map and incorporate this data in further analysis.
Due to present economic challenges, more than 47 million people (most of them children) in the United States currently receive SNAP benefits each month. USDA’s Supplemental Nutrition Assistance Program (SNAP) is leveraging GIS tools, like proximity analysis and map visualizations, to identify SNAP program participants who are in most need. The mapping application helps SNAP recipients find the nearest SNAP authorized stores, including driving directions, and the website receives 30,000 visitors a month. This open and accessible application streamlines workflows both for USDA and the beneficiaries, thus keeping the program efficient. To keep providing assistance to those who need it the most and limit fraud, waste and abuse, travel information to vendors is captured to look for abnormal behavior in the program. This workflow can be repeated in other government programs, like Women Infants and Children (WIC), Medicare and Social Security.
Source: ArcUser Online, July-September 2004; Taking a Bite out of Illegal Food Stamp Traffic
Source/credits: AWS Case Study: USDA Food and Nutrition Service
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United States Postal Service Office of Inspector General At the U.S. Postal Service Office of Inspector General, the Countermeasure and Performance Evaluation (CAPE) team uses GIS to do in-depth analysis to support investigation and audit activities, identify and extract underlying patterns and relationships within data and inform and provide visibility to help stakeholders make informed decisions. The CAPE Analytics Lab provides a suite of analytics tools, including GIS, to support their audit and investigation work. The Analytics Lab weaves different technologies, business processes and people together to provide an environment for collaboration in tackling business problems. The USPS Office of Inspector General deploys production-ready analytic tools to help detect fraud and facilitate improved focus on high-risk threats or opportunities for auditors and investigators.
Recovery Accountability and Transparency Board The Recovery Accountability and Transparency Board (RATB) used GIS to provide transparency in the $840 billion stimulus package of 2009. Transparency is a critical component in combating and investigating fraud, waste and abuse. With GIS technology, the Recovery Board built simple, dynamic, publicly available map galleries that allow users to locate stimulus-funded projects in any neighborhood across the country. The user can also look at side-by-side maps to evaluate funding alongside other issues, like unemployment rates, broadband connectivity, crime rates, education attainment and other demographic variables.
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Reducing Fraud, Waste and Abuse in the Public Sector using GIS
Using Story Maps and GIS to Detect and Prevent Fraud
Many organizations provide prepaid cards to contractors who are often out on the road for work. Though this is necessary, it can also mean that on occasion, these cards are used improperly. Esri worked with a public-sector organization to turn a spreadsheet of transactions into a Story Map, to better visualize, analyze and detect potential abuse and decide on priority locations to target investigations.
What Is a Story Map? Esri Story Maps let you combine authoritative maps with narrative text, images and multimedia content. They make it easy to harness the power of maps and geography to tell your story.
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By using GIS to visualize data, an organization can sort and recognize areas where fraud might be taking place, then quickly and effectively prioritize their investigations.
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Reducing Fraud, Waste and Abuse in the Public Sector using GIS
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In the case of the public-sector group tracking its gas cards, the Story Map starts with a spreadsheet of all the gas station transactions, locations and amounts spent.
Just because the transactions take place off a likely route, however, does not mean they are fraudulent. Somebody might deviate from an approved route because of traffic, restroom stops, closed exits or some other legitimate reason. So with the Story Map, to account for potential route deviations, you can place a 10-mile buffer zone on the most likely route, then plot which transactions still fall outside that zone.
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With Esri technology, the organization was able to map these transactions to better visualize them. These transactions were taking place in Florida, between two authorized locations that drivers were moving between.
Now it’s time to focus on the transactions outside that buffer, because they are the ones that don’t make sense. Within the Story Map, you can color those transactions differently to better focus on them (here, the suspicious transactions are marked blue).
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With GIS technology, you can plot the most likely route between those two cities, and map it alongside the gas station transactions. The resulting visualization shows some of these transactions take place close to this likely route — so those transactions are likely authorized — but some take place far from the likely route.
Finally, using the spreadsheet of transactions with the Story Map tools, you can code each transaction to show the amount spent, as well as how many transactions are made at that stop. Here, you can see that in central Florida, there are a number of transactions that are dark blue and large circles. This helps the organization prioritize an investigation: you would want to start at those larger areas to see why there are so many high-dollar transactions taking place so far away from the likely route.
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Getting Started All data has a spatial component, and the public sector’s data is no different. When agencies fully use and understand the spatial component of data, they can effectively detect and visualize suspicious patterns and better investigate those patterns to reduce fraud, waste and abuse. No matter your workflow or your mission need, Esri’s tools can analyze and display your data to help you detect and prevent fraud. Esri has a complete platform that supports data management, visualization, analysis and dissemination, letting you incorporate specific components into your workflows. Whether you’re analyzing data on a desktop or collecting data on a mobile device, Esri solutions and workflows will help. Applying Esri solutions and GIS technology to reveal the spatial components of your data is a powerful way for the public sector to fight fraud, waste and abuse. For more information, please visit Esri’s Fraud Waste and Abuse website at Esri.com.
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Reducing Fraud, Waste and Abuse in the Public Sector using GIS
When Esri was founded in 1969, we realized even then that Geographic Information System (GIS) technology could make a difference in society. Working with others who shared this passion, we were encouraged by the vast possibilities of GIS. Today our confidence in GIS is built on the belief that geography matters — it connects our many cultures and societies and influences our way of life. GIS leverages geographic insight to ensure better communication and collaboration. Explore our website to discover how our customers have obtained the geographic advantage by using Esri software to address social, economic, business and environmental concerns at local, regional, national and global scales. We hope you will be inspired to join the Esri community in using GIS to create a better world. www.esri.com @esriFederalGovt
GovLoop’s mission is to inspire public sector professionals by serving as the knowledge network for government. GovLoop connects more than 250,000 members, fostering cross-government collaboration, solving common problems and advancing government careers. GovLoop is headquartered in Washington, D.C., with a team of dedicated professionals who share a commitment to the public sector. For more information about this report, please reach out to info@govloop.com
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