Summary: Pursuant to a congressional request, GAO provided information pertaining to its fraud hotline operation. GAO summarized data collected during the first 5 years of the hotline's operation.
GAO established the hotline in 1979 to allow individuals to report instances of fraud, waste, and abuse involving federal funds. During the first 5 years of operation, GAO referred 10,641 cases to agency Inspectors General, other agency audit groups, the Justice Department, and GAO audit groups. There were five types of allegations involved: (1) federal employees only, which accounted for 44 percent of the allegations received; (2) federal employees working in conjunction with other entities, which accounted for 1.5 percent of the allegations received; (3) federal contractors or grantee organizations, which accounted for 26.5 percent of the allegations received; (4) individual and corporate recipients of federal financial assistance, which accounted for 24 percent of the allegations received; and (5) other individuals and corporate entities, which accounted for 3.6 percent of the allegations received. GAO reported that 7,418 of the referred cases have been closed, and that 1,110 of the closed cases involved substantiated allegations. Actions taken in response to substantiated allegations ranged from federal administrative actions to criminal prosecution by Justice. GAO estimated that, of the $20 million in improperly spent funds identified by the hotline, $6.5 million have been recovered and $10.9 million are being collected. GAO also estimated that the hotline has saved about $24 million in federal funds.
