The Association of Certified Fraud Examiners (ACFE) recently released their 13th edition of “Occupational Fraud 2024: A Report to the Nations” (Copyright 2024 by the Association of Certified Fraud Examiners, Inc.), “the largest and most comprehensive study ever conducted on the costs and effects of occupational fraud.” Since 1996, the ACFE has offered this report to business leaders, government officials, anti-fraud professionals, and the public to help improve our collective ability to protect organizations from the harm caused by occupational fraud.
The ACFE estimates that 5% of a company’s revenues are lost to fraud. For the Collier County Board of County Commissioners (BCC), that would equate to over a $100 million dollars annually at risk.
Strong internal controls are key to lowering fraud losses. These controls consist of the policies and procedures implemented to ensure financial reports are reliable, operations are efficient, and activities are compliant with applicable laws and regulations. Internal controls can be tested and validated by checking or auditing to see if specific process steps (such as approval signatures) were followed.
The ACFE found that the opportunity for occupational fraud occurred in over half of the cases due to the lack of internal controls (32%) or the override of existing controls (19%). Internal audit’s identification and testing of these internal controls provides a proactive approach to deterring occupational fraud. As the Clerk is established by Florida constitution the Auditor and Chief Financial Officer of the County, financial controls are the primary focus of the Clerk’s Office of Inspector General (OIG) in conducting audits of controls.
Internal audit is one of the services provided to the BCC and Clerk’s operations, as part of the Clerk’s OIG. Internal auditing is an independent, objective assurance and consulting activity designed to enhance and preserve organizational value. It brings a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. This includes assessing the risks within the organizations, evaluating the objectives of the functions, and ensuring that the controls to ensure those objectives are in place and operating properly.
The OIG’s audit team is led by the Inspector General and Senior Auditor, both of whom are Certified Internal Auditors (CIA), the Institute of Internal Auditors (IIA) flagship certification for Internal Audit professionals. The OIG’s audit team also holds certifications as Certified Inspector General Auditors (CIGA), Certified Agile Audit Professionals (CAAP), Certified Fraud Examiner (CFE), and certification in data analytics (CIDA).
By far, the primary method of detecting fraud is tips (43%). Most (52%) tips originate from employees, followed in frequency by customers/constituents (21%) and vendors (11%).
Tips about potential fraud related to BCC operations, Clerk operations, or guardianship assets for Collier County cases, can be reported in English or Spanish to our local Inspector General hotline by calling (239) 252-8412, or through the 24-hour confidential hotline at 844-ClerkIG (844-253-7544). Additional reporting options are shown on the Clerk’s website at www.collierclerk.com.
The Clerk’s OIG is taking a proactive outreach approach to educate the community on fraud and ways to identify and protect themselves from scammers. If your group wants to learn more about fraud prevention, call the OIG at (239) 252-8412 to schedule.
The full 2024 ACFE Report to the Nations is available to the public for download.