SG Government Uses Analytics to Fight Fraud

Online fraud is a massive headache, and government schemes are becoming key targets.

Recently, SkillsFuture Singapore (SSG), which oversees a Singapore initiative to help citizens to receive financial assistance to attend courses by approved training providers, saw SGD 40 million worth of fraudulent claims.

It was the largest defrauding of a public institution in Singapore to date. The criminal syndicate behind it saw five suspected members charged with submitting forged documents. To date, the police seized SGD 6.7 million in cash, 11 kg of gold, and froze more than SGD 10 million in bank accounts.

“Fraudsters, who are going all out to cheat, are getting more sophisticated and their plans more elaborate. They will also evolve their approach. SSG’s detection system must be improved and become more sophisticated too,” Ong Ye Kung, Minister for Education (Higher Education and Skills) said at a Parliamentary Session.

To stop such instances from occurring, SSG is looking to set up a data analytics system by 3Q in 2018. SSG is seeking assistance from the private sector and the Government Technology Agency. It also restructured and strengthened the fraud detection and audit team.

“Through appropriate use of data analytics and drawing on data across Government agencies, we can better detect false claims, without significantly affecting genuine employers applying for training grants to upgrade the skills of their workers,” he added.

The aim of the new analytics system to identify fraudulent behaviors more accurately. “What we want to do is, through data analytics, we can work out the pattern of cheating, and detect them much better, and that pattern of cheating has to keep on evolving because they are evolving too,” Ong said.

"The bottom line is, the system has a big capability gap today. It could have been prevented, and we will take the necessary actions to remedy this," Ong added.

The SSG case is not unique and paints an escalating pattern of fraud government schemes. According to government reports, the government was able to get back SGD 5.57 million between 2014 and 2017 from the SGD 4.7 billion paid out under the Wage Credit Scheme (WCS).

WCS supported firms in sharing sustainable wage growth for lower- and middle-income workers. The cases often involved employers providing false information to obtain payouts that were non-compliant and fraudulent. Meanwhile, the Productivity and Innovation Credit (PIC) scheme, which was set up to fund businesses to become more productive and profitable over time, was also targeted.

The Inland Revenue Authority of Singapore (IRAS) used a risk-based approach to safeguard against abuse, which included an examination of pay slips, banking statements, interviews, invoices and field visits for specific cases. To date, IRAS has prosecuted 13 cases for fraud under the PIC scheme, and one case under the WCS.