Fraud Prevention and Detection

The Auditor-Controller's Office has initiated a strategy to promote awareness in the prevention and detection of fraud, waste, and abuse.  As part of this strategy, we are working to ensure all County staff have access to information and tools to assist in the prevention of fraud, waste, and abuse.

The tools and information below will assist the County and our employees in the management of fraud, waste, and abuse.

How to Identify Fraud

Instructing employees that they must help the organization fight fraud does little good without some accompanying information about what to look for. The following are some warning signs of fraud that employees should be aware of:

Financial/Transactional Red Flags

  • Red flags regarding the structure of or personnel involved in a transaction
  • Red flags within the organization’s operations
  • Red flags within the accounting system
  • Red flags regarding the organization’s financial performance

 Behavioral Red Flags

  • Living beyond their means
  • Financial difficulties
  • Control issues, unwilling to share duties
  • Unusually close relationship with vendor/customer
  • Wheeler/dealer attitude
  • Divorce/family problems
  • Irritability, suspiciousness, defensiveness
  • Addiction problems
  • Unwilling to take vacation days
  • Past employment-related problems
  • Complained about inadequate pay
  • Excessive pressure from within the organization
  • Past legal problems
  • Instability in life circumstances
  • Excessive family/peer pressure for success
  • Complained about lack of authority
The Fraud Triangle

The fraud triangle is a model for explaining the factors that cause someone to commit occupational fraud. It consists of three components which, together, lead to fraudulent behavior:  
  • Pressure - Pressure in this case is another way of saying motivation. What is it in one’s life that drives one to commit fraud? Pressure sometimes involves personal situations that create a demand for more money; such situations might include vices like drug use or gambling or merely life events like a spouse losing a job. At other times, pressure arises from problems on the job; unrealistic performance targets may provide the motive to perpetrate fraud.
  • Opportunity - If one is talking about theft, there must be something to steal and a way to steal it. Anything of value is something to steal. Any weakness in a system, for example, lack of oversight is a way to steal. Of the three elements of the Fraud Triangle, opportunity is often hard to spot, but fairly easy to control through organizational or procedural changes.
  • Rationalization - There are two aspects to rationalization: One, the fraudster must conclude that the gain to be realized from a fraudulent activity outweighs the possibility for detection. Two, the fraudster needs to justify the fraud. Justification can be related to job dissatisfaction or perceived entitlement, or a current intent to make the victim whole sometime in the future, or saving one’s family, possessions or status. Rationalization is discernible by observation of the fraudster's comments or attitudes.
Fraud Prevention Resources

In December 2011, the Association of Government Accountants (AGA) launched the release of AGA's state-of-the-art online resource designed to help officials at all levels of government to prevent, detect, and deter fraud called AGA's Online Government Fraud Prevention ToolKit.

AGA Executive Director, Relmond P. VanDaniker, CPA states, "By helping reduce fraud in government programs, more money can be made available for programs, services, and infrastructure."
View the ToolKit here:

Other websites with useful fraud prevention information:

Association of Certified Fraud Examiners -
Association of Government Accountants -