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Government Analytics can shape public service for the future

Find out how government analytics can help fight public sector fraud and fuel government productivity.

Overview

Governments and public sector organizations today are facing two fundamental yet conflicting trends:

  • Heightened expectations from citizens are driving the need for differentiated and personalized public services.

  • Dwindling budgets, especially in the aftermath of the global financial crisis, are limiting the ability of administrators and policy makers to meet citizens’ needs in the conventional way.

Caught between the desire to deliver better public service outcomes and today’s unviable cost structures, governments across both mature and emerging economies are taking measures to reinvent public service delivery through insight-driven government analytics to reduce costs and improve the quality of services. However, achieving high performance in public service is not just limited to controlling costs. Enhancing revenues is a key focus area for governments in their quest to tackle public debt, contribute to social justice and build credibility with citizens.

Checking public sector fraud—tax evasion, benefit fraud and procurement fraud—is increasingly recognized as a major avenue for increasing government revenue. And government analytics is enabling policy makers and administrators to make strategic moves to regain control from fraudsters.

Background

Citizens worry about fraud. A recent citizen survey by Accenture in 10 countries identified corruption and financial scandals as one of the most worrisome issues in their country. The global impact of tax evasion amounts to a staggering US$3.1 trillion lost to US federal revenue over the last 10 years and 5 percent of the global gross domestic product (GDP). The collective impact of tax evasion is so significant that, if tackled effectively, for example through government analytics, it has the potential to alter a country’s economic status from being one of the poorest to one of the richest. It is critical for governments to plug this resource leakage.

Fraud is also prevalent in private sector industries— such as banking and financial services —but unlike their government and public sector counterparts, the response mechanisms in the private sector are highly evolved. Government organizations can learn from the experiences of their private sector peers to draw insights into combating fraud using government analytics.

Analysis

The public sector can learn from the ways in which the financial industry is fighting fraud through a number of strategies including:

Management controls—Faced with new challenges and increasingly intense scrutiny from regulators, banks and financial institutions are developing internal control frameworks and continuously evolving systems. Government analytics, coupled with effective internal control and supervision, can help in proper segregation of duties, adequate documentation for financial transactions and tighter control over inventory.

IT security—The banking industry has adopted a number of technology-driven measures to deter, detect and prosecute fraudsters. Antifraud initiatives, such as online protection schemes involving multilevel authentication, are giving a significant competitive advantage and directly contributing to the industry’s success.

Risk management—A dynamic risk management framework is a key element in corporate decision making. However, an overabundance of data and scarcity of talent and skills in developing analytical models using risk analytics is limiting the potential of risk management at most organizations.

Recommendations

Government organizations are following financial services best practices for tackling fraud. However, there is no single solution governments can adopt to address the issue. Accenture recommends the use of predictive analytics, along with other data-driven techniques, to proactively identify and prevent noncompliance. Government analytics can help organizations:

  • Collect the right amount of taxes, through real-time auditing and prevention of fraud and error, to help ensure benefits go to the right people.

  • Address all the major types of fraud, including underdeclarations, ineligible tax credits, high-risk refunds, tax collection inefficiencies, and welfare or pension abuses.

  • Sustain and improve business outcomes by optimizing the use of their technical and financial resources, and by using effective talent and change management.

Every day spent without embedding government analytics across core operations is another day of financial loss. It’s time to take definitive action with all the technical skills and knowledge at our disposal so that fraudsters are discouraged and all funds are accounted for to help shape the public services of the future.