Taylor: Fraud Reporting System One Step Closer to Reality

Anti-fraud legislation voted out of the Ohio Senate

Tuesday, May 5, 2009

Columbus -

The Ohio Fraud Reporting System, a comprehensive program to ensure greater accountability in the way tax dollars are spent, moved closer to reality today according to Auditor of State Mary Taylor, who first proposed the new system.

“With the passage of Senate Bill 7 in the Ohio Senate today, we will soon have additional tools to expose government fraud, waste and abuse at its earliest stages,” Taylor said.  “It is now up to the state House of Representatives to strengthen our ability to fight fraud and the attempted theft of taxpayer dollars.”

The legislation, introduced by state Senator Mark Wagoner (R-Toledo), gives Ohio citizens a greater role in revealing tax-dollar waste and misuse, while strengthening whistleblower protections for public employees who report suspected fraud.  A companion bill in the Ohio House of Representatives, House Bill 58, is sponsored by state Representative Ross McGregor (R-Springfield).  

“This important legislation will enhance our efforts to hold state and local government accountable for how it spends tax dollars,” Taylor said. “This legislation builds upon the Auditor of State’s existing fraud reporting system and expands our public awareness campaign to every government employee in Ohio. The high cost associated with fraud and corruption in the public sector is significant and avoidable and this bill will empower government employees to become personally involved in rooting out fraud, waste and abuse.”

Wagoner agrees that the legislation is needed now more than ever.

“Ohioans expect their government to spend their tax dollars wisely, and state and local officials deserve to be held accountable for their actions,” Wagoner said. “This legislation will help make our government more transparent and allow Ohioans to take an active role in eliminating corruption by those individuals who have abused the public’s trust.”

Although not presently required by law, the Auditor of State already maintains a Fraud Reporting System, which includes a hotline (866-FRAUD-OH) to report the misuse or abuse of public funds.  The new legislation would strengthen this service by codifying the Ohio Fraud Reporting System in law, requiring that all public employees be made aware of the Ohio Fraud Reporting System and extending whistleblower protection to those who report allegations of fraud using the fraud reporting system.

In addition, the Auditor of State, over the course of an audit, will confirm that all public entities are taking steps to make employees aware of the Ohio Fraud Reporting System.  

Public awareness of anti-fraud resources in the Auditor of State’s office is an important part of protecting government funds. According to the Association of Certified Fraud Examiners 2008 Report to the Nation on Occupational Fraud & Abuse, more than 50 percent of all government fraud is detected by tips to authorities. The report also found that the average cost of government fraud decreases significantly for organizations maintaining an anonymous fraud hotline. Entities with a fraud hotline suffered a median loss of $100,000 per case compared to $250,000 per incident for organizations without a fraud hotline.