Second Regular Session | 74th General Assembly
Colorado General AssemblyFraud is...
The OSA's Fraud Hotline is specfically targeted toward fighting occupational fraud, which is the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization's resources or assets.
Within state government, occupational fraud involves those situations in which a current or former state employee or contracted individual (i.e., individual currently or formerly acting under a contract, purchase order, or other similar agreement for the procurement of goods and services with a state agency) may be using their position or access to commit fraud against the State or others.
There are three general categories of occupational fraud, all of which should be reported to the OSA's Fraud Hotline if suspected:
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Involves the theft or misuse of money, equipment, information, supplies, or other State resources. Common examples include:
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Involves state employees or officials using their influence in a business transaction, contrary to their duty to the State or the rights of another, in order to procure some benefit for themselves or another person. Common examples include:
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Involves the intentional misstatement or omission of material transactions, events, or other information from State's financial reports and exhibits with the intent to deceive users. Common examples include:
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The fraud triangle is a model for explaining the factors that cause someone to commit occupational fraud. It consists of three components which, together, lead to fraudulent behavior:
Pressure — The fraudster has some financial problem, which can be personal or professional, that they are unable to solve through legitimate means. They begin to consider committing an illegal act, such as stealing cash or falsifying an expense report, as a way to solve their problem.
Opportunity — The fraudster must see some way they can use (abuse) their position of trust to solve their financial problem, as well as a means by which they can conceal their crime to avoid getting caught. The perceived opportunity defines the method by which the crime is eventually committed.
Rationalization — The fraudster must justify the crime to themself in a way that makes it a justifiable act in their mind. The vast majority of fraudsters are first-time offenders with no criminal past; they do not view themselves as criminals. Fraudsters commonly rationalize their crime by telling themselves that they are ordinary, honest people who were caught in a bad set of circumstances that left them no other choice.