Doing my weekly review of articles at, I came across an article written by Jonathon Walters.  Titled “The Right Way to Fight Fraud” Mr. Walters does a pretty good assessment of the problems and perks of fighting fraud.  The perks he describes under the heading of “the three horsemen of the public-sector apocalypse ‘waste, fraud and abuse’” that leaves us short a horseman (there are four), but we are talking about government where perfect is the enemy of good enough.  My personal four horsemen of the apocalypse are benchmarking, outsourcing, shared services and command and control thinking.

I certainly agree with Mr. Walters that the amounts of fraud are great in Medicaid, Medicare, TANF, and SCHIP and the amounts of $27 billion in “leakage” is staggering.  But to me this is a political red herring as politicians build programs to avoid waste . . . only to add more cost and waste to the system.  The State of Indiana and FSSA can serve as an example.

Indiana set out to modernize Indiana Welfare Eligibility where the Secretary of FSSA was out to eliminate abuse through technology.  What we got instead was a lesson that I am not sure anybody has learned (after all, Indiana is the not invented here state).  The modernization took functions of the work and separated them believing that more separation of function would reduce fraud and with technology all the pieces would work together with checks and balances at each step.

The result was recipients, legislators, providers and special interest groups coming together to complain about processing times in one of the most bi-partisan efforts I have ever seen in government that . . . this modernization wasn’t working.   Billions of dollars wasted on bad theory that will take years to recover from the mess.  Politically the heat is off as Governor Daniels killed the contract with IBM, but the waste continues.

The current secretary is stuck with a 30% increase in personnel from this debacle.  But no lessons have been learned I fear as the pilot program running today includes even more people.  The reason is more checking because the secretary says that $1 million of fraud has been committed over four years in the old system and so we spend millions more to prevent this in eligibility (read Indiana Welfare Modernization, Costs and Cynicism).  Politically correct . . . maybe, hugely wasteful . . . definitely.

Part of the problem is the belief that any system with paper is antiquated and needs technology to automate.  But this is to ignore our biggest opportunity to improve . . . the design and management of work.  Poor work design is at fault for fraud, not people.

In fact, technology only makes things worse.  Technology locks in the waste of a poor work design and management thinking that technology is the answer continues the downward spiral.  Just because we can automate something doesn’t mean we should.

Further, with all the checks and balances and separation of the work into functional specialties, we lose who is responsible and accountable for the work.  More hand-offs through technology or paper always increases waste in a system.  The work loses context as it moves from person to person and the queues it creates increases service time on a large scale.

There is one other thing that functional separation of work and technology creates and it is called fraud.  People bent on committing fraud learn that when no one is responsible that it is easier to game the system.  I see algorithms in technology to catch people committing fraud, edits, audits, etc. where the answer is really much simpler.

The answer is to design the work by getting knowledge about the what and why of current performance.  Understanding customer demands, deriving measures from these demands and experimentation with method.  This means government management must first understand the actual work without technology (either ignore it or turn it off). 

Additionally, this means decisions about the work have to be made with the work and not top-down.  Workers can only be made accountable when decisions are made with them, not to them.  For the political hacks out there with their preconceived notions about fraud prevention, my suggestion is to get knowledge for your ignorance.

The answer is in the work with the people that perform the work and not in the inspection, monitoring, technology, etc that sounds promising but continues to add fraud and waste.

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Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  For government please link to  Reach him on Twitter at LinkedIn at