May 11 2016

States and Cities Battle Fraud with Mobile Apps

As fraud hotlines go mobile, states and localities hope to tap into the ubiquitous power and connectivity of smartphones to bolster the battle against waste.

While crowdsourcing is a new phenomenon in the private sector, state and local governments have long relied on crowdsourced information and support from citizens.

Fraud hotlines have been in existence for years. For example, the state of Maryland’s Office of Legislative Audits established a fraud tip line and website in 2003. According to a 2011 Baltimore Sun article, the agency received more than 300 tips a year on average, which led to high-profile busts, including an “indictment of a former Department of Natural Resources employee on charges of stealing $46,000 in state funds.”

Now that we’re in the mobile era, states and localities are adding mobile apps to their fraud arsenal, reports Stateline. Long Beach, Calif., Richmond, Va., and Philadelphia are among the states and cities that have successfully added mobile apps to their fraud-fighting toolkit.

In Long Beach, California, six city employees were fired after people complained items had gone missing from inside impounded cars. In Philadelphia auditors found safety issues in a dozen rental properties as well as over $350,000 in unpaid taxes. And in Richmond, Virginia, a city employee is on the hook for nearly $10,000 in bogus expenses.

Local governments are faced with the challenge of driving app downloads. Of the three cities mentioned, Philadelphia has the most, at 2,015 downloads. Ohio, which built its app in-house, has 673 downloads.

It’s hard to say what the right number is, since many localities aren’t measuring whether their leads come from the hotline, the website or the app. Also, the telephone number for the hotline is available through the app, so people who call may have actually started via the app. Regardless of how citizens get to the hotline, smartphones and apps are likely to be a key part of the fight against fraud and abuse at both the state and the local level.

“Smartphones are becoming a ubiquitous tool, and I think we need to meet people where they are,” said Dave Yost, Ohio’s auditor, who introduced a fraud app in Ohio in 2014.