Rooting out Fraud in Federal Student Aid
Federal student aid programs provide loans, grants, and work-study assistance to help students afford a post-secondary education. But increasingly, fraudsters are exploiting the system by posing as fake “ghost students” and stealing taxpayer-funded aid.
A lack of financial means should never prevent a student from pursuing an education. Yet every dollar lost to fraud is a dollar that cannot go to a deserving student.
In FY24, 9.9 million students received $120.8 billion in aid through the Office of Federal Student Aid. That same year, California online colleges reported that 34% of aid applicants were likely fraudulent, underscoring the need for stronger safeguards.
This week, House Republicans are advancing legislation to combat student aid fraud by requiring the Department of Education to use detection systems to identify suspicious FAFSA…
CLICK HERE to read the FULL The Leader's Floor Lookout: Week of June 1, 2026 article.
PROCUREMENT & EXPENDITURE (STOPPING KICKBACKS)
Procurement fraud usually involves inflated invoices or “fictitious” vendors.
- The Three-Way Match: Never pay an invoice unless you have matched the Purchase Order (PO), the Delivery Note (signed), and the Supplier Invoice.
- Vendor Master File Review: Review your vendor list annually. Look for suppliers with the same bank details or physical addresses as your employees.
- Dual Authorization: Implement a “Two-to-Sign” rule for all EFT payments above a certain threshold (e.g., R5,000).
- No “Cashing” of Checks: If you still use physical checks, strictly prohibit “Cash” as a payee and store blank checks in a dual-lock safe.