Fighting fraud forensically

Increasingly, OIG investigators are applying financial forensic techniques to protect Global Fund grants, and the millions of people who depend on them, from wrongdoing. So what are financial forensics? It’s an approach which combines investigative, auditing and accounting skills to examine financial and accounting records for evidence of misappropriation, theft or misuse of funds, corruption, or any other type of fraud.

It involves a lot of data review and analysis. We look for any kind of financial or accounting anomalies; that could mean duplicate invoicing, falsified records, irregular payments, inflated pricing… any of which might indicate intentional wrongdoing. But as well as looking at what’s there, we study what’s not there: missing or incomplete data or records may be red flags for fraud.

We use accounting and auditing skills to get a clear picture of the situation, and investigative skills to work out what actually happened.

Whenever fraud impacts Global Fund grants, financial forensics allows us to quantify losses, so the organization can pursue recoveries from those responsible. And the insight we gain through financial forensics is shared with staff, governance officials, implementers and counterparties, to help them design systems and procedures that can stop fraud happening.

With financial and data fraud becoming more sophisticated, financial forensics is a vital tool in uncovering wrongdoing at an early stage, and in bringing the perpetrators to justice.

David Wolfe (CPA, CFF) is a forensic accountant at the Global Fund’s Office of the Inspector General. He co-authored the General Principles for Financial Forensics, recently endorsed at the 2019 Conference of International Investigators.