Get full-spectrum ERM by integrating fraud risk

Get full-spectrum ERM by integrating fraud risk Along with nongovernmental organizations, federal agencies are generally unclear about the relationship between the 2016 Fraud Act and enterprise risk management (ERM) requirements. Many treat fraud risk management as an adjunct to the ERM program. But holes in this approach can let in risks that are undetected until they set off alarms. Agencies can take necessary precautions by leveraging their current capabilities, and creating an integrated risk framework to weave fraud risk management through the ERM process.

Augment existing ERM to include fraud risk Creating a framework that integrates fraud risk into existing ERM builds a more efficient and effective risk management program. The agency gains risk oversight that includes ways that fraud affects the broader risks. As a result, internal and external risk categories — operational, financial and reputational — are more fully addressed. In addition, privacy and other breach damage can be minimized.

In developing an integrated risk management framework, focus should be on four core elements — risk environment, risk assessment, risk response, and monitoring and evaluation. Valuable integration activities include the following:

Environment ― Designating an oversight entity, considering governance
Assessment ― Detailing fraud schemes, and anticipated actors and channels
Response ― Blending appetite and tolerance requirements for a coordinated strategy
Monitoring and evaluation ― Using analytics tactically for prevention and detection, and environmental monitoring

Beyond avoiding damage, integrating fraud risk management into overall ERM produces greater assurance of compliance and a heightening of insights for resource allocation and other decision-making to deliver on mission.

Download the AGA Journal article “Leverage What You Have to Integrate ERM and Fraud Risk Management” for in-depth guidance and recommendations.


Linda Miller
Director, Public Sector Advisory
T +1 571 444 1990