Identifying Red Flags and symptoms of fraud

Abstract

When we refer to red flags, it means the various situations or conditions that, over the years, have consistently been shown to be contributing factors to fraud, waste and abuse. By themselves, they don’t necessarily mean anything, but the more that are present, the higher the risk that fraud, waste and abuse is occurring, or could occur.

There are two general categories of offenders – internal and external. Many government programs have external customers, such as contractors, grantees, or others who potentially can misrepresent facts to obtain money they are not entitled to. Internal offenders are people who use their positions within an organization for personal enrichment through the deliberate misuse or misapplication of the organization’s resources or assets. The red flags identified here ought to aid in identifying fraud in both categories of offenders.

Keywords: red flags, venality, racketing, management