Design economic policy measures that are more resistant to fraud

ICON 013: Design fraud resistant policies

The Australian Government is regularly tasked with formulating and implementing economic policy measures, often in the face of severe economic adversity. These include stimulus and recovery measures, like those implemented as part of the government’s response to the 2008 Global Financial Crisis or the economic impact of the 2020 COVID-19 pandemic. They also include programs and policies implemented in the face of cost-of-living pressures caused by geopolitical tensions, conflict and extreme weather that impact supply chains and put upward pressure on the cost of goods.

A combination of financial pressure, opportunity and rationalisation is conducive to fraud. Economic downturns and uncertainty, and cost of living stress can intensify these ingredients, which can cause individuals to be less compliant with rules and obligations or decide to do something fraudulent.

Our Economic Stimulus and Recovery Counter Fraud Toolkit provides practical advice on how to identify common fraud threats and controls to safeguard new policies and spending measures against fraud. Our Cost of Living Measures Counter Fraud Toolkit provides practical advice on the fraud threats and controls that are particularly applicable to cost-of-living support and mitigation programs.

Principles to follow when designing economic recovery measures

Australian Government entities should apply the following principles when designing and implementing economic recovery measures:

  • There is always going to be fraud as there is always going to be individuals who act dishonestly, especially when motivated by money.
  • If you don’t find fraud you can’t fight it. The identification of fraud and corruption should be viewed as a positive and proactive achievement.
  • Addressing fraud and corruption needs a holistic response incorporating detection, prevention and redress, underpinned by a strong understanding of risk. It also requires cooperation between Australian Government entities and other organisations under a spirit of collaboration.
  • Fraud is ever changing as fraud schemes evolve quickly and that means we also have to evolve quickly.
  • Prevention is the most effective way to address fraud as it reduces loss and reputational damage but also requires fewer resources.

Important steps when designing and rapidly delivering relief and recovery measures

Identify and assess fraud and corruption risks

Understand what the risks are. When officials have a clear and specific understanding of fraud and corruption risks, they can make better decisions about their risk tolerance or make necessary adjustments to processes, policy and program design.

Learn about conducting a fraud risk assessment.

Think like a fraudster

When people commit fraud, they take on one or more 'personas'. By exploring these personas and how they may target economic recovery measures, officials can better understand how measures might be vulnerable to fraud. They can also better counter or reduce the scale and impact of fraud.

Learn about the different types of fraudsters.

Test your controls and assumptions

Fraud control testing is a proactive and proven way of eliminating your blind spots. It helps officials find vulnerabilities and challenge assumptions about how fraud is managed within government programs. When officials know where their programs are vulnerable, they are better informed to prevent fraud or uncover where they are being exploited

Learn about testing your controls to see if they are effective.

Introduce controls

Learn about different countermeasures.

Introduce countermeasures

Sufficient resourcing

Adequately resourced prevention and compliance areas enable entities to perform effective controls. Allocate sufficient staffing and technical resources to enable fraud prevention and detection processes, checks and oversight.

Governance, accountability and oversight

Establish governance, accountability and oversight of processes by using delegations and requiring committees and project boards to oversee critical decisions and risk. Good governance, accountability and oversight increases transparency and reduces the opportunity for fraud.

Clear public communication

Providing clear statements and communications on entity practices and responses can help prevent staff and clients falling victim to scams or slipping into non-compliance, while discouraging fraudulent or corrupt activities.

Clear and specific eligibility requirements

Clear eligibility requirements and only approve requests or claims that meet the criteria. This can include internal requests for staff access to systems or information.

Declarations or acknowledgements

Use declarations or acknowledgments to both communicate and confirm that a person understands their obligations and the consequences for non-compliance. The declaration could be written or verbal, and should encourage compliance and deter fraud.

Collect accurate and relevant data

Whole-of-Government policies require us to have a high level of confidence in data when providing government services and payments. Create policies, rules, processes and systems to collect accurate and relevant data to help.

Data analysis

Analyse data to improve processes and controls, increase payment accuracy and find and prevent non-compliance, fraud and corruption.

Confirm identity

Confirm the identity or attribute of the individual. Evidence of identity should be collected and verified using policies, rules, processes and systems to make sure only known, authorised identities can gain access to information stored in networks and systems.

Authenticate identity

Authenticate customer or third-party identities during each interaction to confirm the person owns the identity record they are trying to access. This control is supported by the National Identity Proofing Guidelines and the Digital ID Act 2024.

Match data

Match data with the authoritative source and verify relevant details or supporting evidence. Services such as the Identity Matching Service can be used to verify identity credentials back to the authoritative source when the information is an Australian or state and territory government issued identity credential. This countermeasure is supported by the Office of the Australian Information Commissioner's Guidelines on data matching in Australian government administration.

Verify information

Verify any requests or claim information you receive with an independent and credible source.

Prompts and alerts

Set up system prompts and alerts to warn users when information is inconsistent or irregular, which either requires acceptance or denies further actions.

Automatic notifications

Automatically notify clients or staff about high-risk events or transactions. This can alert them to potential fraud and avoid delays in investigating and responding to fraud.

Fraud detection software

Fraud detection software programs automatically analyse data to detect what is different from what is standard, normal or expected and may indicate fraud or corruption.

Other resources

Economic Stimulus and Recovery Counter Fraud Toolkit

This toolkit has been developed to help Australian Government entities when designing and delivering economic stimulus and recovery measures. It provides an overview of common fraud methods to guard against and countermeasures to deploy to reduce the risk of fraud.

Cost of Living Measures Counter Fraud Toolkit

This toolkit helps Australian Government entities when designing and delivering measures to support households facing cost-of-living pressures. It provides an overview of the common fraud methods to guard against and controls to deploy to reduce the risk of fraud.