CIG Fraud Detection & Prevention Flashcards

Which data analytics technique is commonly used to detect anomalies in large financial datasets by examining the frequency distribution of leading digits?

Answer: Benford's Law analysis

Benford's Law predicts the expected frequency of leading digits in naturally occurring datasets, and deviations from this pattern can indicate manipulation or fraud.

An Inspector General reviewing purchase card (P-card) transactions discovers multiple purchases just below the approval threshold. This pattern most likely indicates:

Answer: Splitting transactions to avoid oversight

Repeated purchases just below an approval threshold is a classic 'structuring' red flag, suggesting intentional splitting of transactions to circumvent required oversight.

Which of the following best describes 'procurement fraud'?

Answer: Corruption or manipulation in the contracting and purchasing process

Procurement fraud involves corrupt or dishonest manipulation of the government contracting and purchasing process, including bid rigging, kickbacks, and collusion.

A conflict of interest in contracting most commonly occurs when:

Answer: An agency employee has a financial interest in an awarded vendor

A conflict of interest arises when a government employee has a personal financial or personal relationship with a vendor that could impair impartial decision-making in the contracting process.

What is the purpose of a 'continuous monitoring' program in fraud prevention?

Answer: To provide real-time or ongoing automated review of transactions for anomalies

Continuous monitoring uses automated tools to review transactions on an ongoing basis, enabling early detection of fraud, waste, and abuse rather than waiting for periodic audits.

Under the Federal Acquisition Regulation (FAR), which clause is specifically designed to protect the government against contractor fraud involving false cost or pricing data?

Answer: Truth in Negotiations Act (TINA)

The Truth in Negotiations Act (TINA), implemented through FAR 15.403, requires contractors to submit certified cost or pricing data and protects the government from fraud involving inflated or false pricing submissions.