Everyone loves government largesse, perhaps none more so than fraudsters. SkillsFuture is a generous package of measures to help workers reskill in the face of job disruption. With its full implementation, the spending on continuing education and training was estimated to rise to an average of over $1 billion a year from 2015 to 2020. Criminals leapt at the chance to profit from this generosity and succeeded in siphoning nearly $40 million from SkillsFuture Singapore (SSG), the biggest case of a government agency being defrauded.
While not all instances of fraud can be prevented, this particular case should have been detected much earlier because it was so egregious and the sums involved were so large, Minister for Education (Higher Education and Skills) Ong Ye Kung acknowledged in Parliament last week. The inter-agency task force set up to strengthen SSG's fraud detection system with data analytics is an important step in combating abuse of government schemes, and must yield lessons for other social service providers. Cheats are always on the lookout for loopholes to exploit and the public sector must arm itself against them. Another recent target was the Wage Credit Scheme, with some 1,000 employers having tried over four years to fleece the Government of $5.57 million with ruses such as hiring phantom workers or inflated wages.
How to stop such abuse in its tracks is a challenge many governments grapple with. Indeed, fraud, waste and abuse in social service have been dubbed a modern-day epidemic by Accenture. The rising demand for social services - the professional services firm said in a recent report - coupled with the increasing complexity of schemes and the greater use of online and self-service channels drive up new opportunities for error, mistakes and abuse. The more challenges governments face, it said, the greater chance there is for those wanting to abuse the system to spot weaknesses and siphon off funds.
Experts in the business of fighting fraud say that organisations need to be proactive by, for example, having internal controls that are instrumental in searching for fraud, rather than passively learning about it by accident. An analysis of 2,410 cases of occupational fraud in 114 countries by the Association of Certified Fraud Examiners found that fraud detected through active methods tends to be caught sooner and causes smaller losses than fraud detected passively.
Still, government agencies have their work cut out. It is not easy to strike the right balance between ensuring that the application process for grants is not so onerous as to dissuade legitimate applicants, yet stringent enough to prevent the system from being gamed. Technology in the form of data analytics may prove a useful aid. It must be used to its deterrent best.