Definitions of Fraud, Waste & Abuse
Acts of fraud, waste, and abuse impact the resources of state government and its agencies. Such acts may occur through an unintentional act or by a deliberate action. Regardless of the intent, fraud, waste, and abuse should not be tolerated.
A dishonest and deliberate course of action that results in the obtaining of money, property, or an advantage to which state employees or an official committing the action would not normally be entitled. Intentional misleading or deceitful conduct that deprives the state of its resources or rights. There are three categories of fraud: financial statement fraud, misappropriation of assets, and corruption.
The needless, careless, or extravagant expenditure of state funds, incurring of unnecessary expenses, or mismanagement of state resources or property. Waste does not necessarily involve private use or personal gain, but almost always signifies poor management decisions, practices, or controls.
The intentional, wrongful, or improper use or destruction of state resources, or seriously improper practice that does not involve prosecutable fraud. Abuse can include the excessive or improper use of an employee's or official's position in a manner other than its rightful or legal use.
Financial Statement Fraud
Intentional misstatements, omissions, or disclosures in financial statements designed to deceive financial statement users. Fraudulent financial reporting often involves management override of controls that otherwise may appear to be operating effectively. Common examples include overstating revenues and understating liabilities or expenses.
Misappropriation of Assets
The theft of an entity's assets that causes the financial statements not to be presented in conformity with GAAP. False or misleading records or documents, possibly created by circumventing controls, that may accompany misappropriation of assets.
Employees or officials wrongfully using their influence in a business transaction in order to procure some benefit for themselves or another person, contrary to their duty to their employer or the rights of another.