Keeping the Bank of Uncle Sam Efficient and Safe from Fraud

Every year, the federal government distributes trillions of dollars through grants, loans, and contracts. These funds power everything from disaster recovery to student aid and small business support. But this scale of spending brings enormous vulnerability. Fraud is not just a risk — it’s a costly and evolving threat. GAO estimates that the government loses up to $500 billion annually to fraud across agencies and programs.

At this year’s AGA Professional Development Training, I had the opportunity to be a part of the critical conversation on how the government can protect public funds without slowing down the delivery of vital services and support for taxpayers? Answering this question must begin with a fundamental shift — fraud prevention must be built into the DNA of federal programs, not treated as an afterthought. At Allocore, we believe and have proven that real-time, AI-powered fraud prevention is not just possible — it’s essential.

From Speed-First to Prevention-First

Historically, federal programs have faced a perceived tradeoff between speed and accuracy. During the COVID-19 pandemic, this tension became painfully clear. Funds needed to flow fast — and they did — but fraudsters exploited gaps in identity and eligibility verification, leaving agencies chasing down improper payments after the fact.

Throughout the conference, agency leaders emphasized that this reactive approach isn’t sustainable, and a better road forward lay ahead. Advances in technology and commercial best practices have made the tradeoff between speed and accuracy a false choice. Using technology to adopt prevention-first mindset would allow agencies to integrate risk management into every step of the funding lifecycle — designing programs with fraud defense from day one, creating feedback loops, and ensuring the right funds reach the right recipients at the right time.

Modern Tools for a Modern Threat

Fraud tactics have grown more sophisticated — from synthetic identities and spoofed devices to AI-powered schemes. To encounter increasingly sophisticated fraud, government programs must modernize their own tools. Agencies are turning to automation and AI to alidate identity at scale, detect anomalies in real time, and accelerate legitimate transactions while stopping fraud before it happens.

For example, one agency used automation to block an organized fraud ring by detecting duplicate claims through AI-powered photo analysis. Another agency launched a “bad actors” pilot project, facilitating data-sharing of fraudulent actors through Treasury to stop repeat fraud attempts across agencies.

Breaking Down Data Silos

Improved data sharing emerged as a key theme. Many agencies hold valuable data that could help others validate eligibility or flag fraud — but too often, legal, technical, or cultural barriers keep that data siloed.

Recent executive orders are pushing agencies toward cross-government collaboration, enabling secure, real-time data exchange without major statutory changes. As one panelist put it: “When agencies connect the dots early, fraud doesn’t stand a chance.”

Fraud Prevention Is a Culture Shift

Technology is critical, but it’s not the only challenge. Cultural and operational hurdles — like limited staff, legacy systems, and resistance to change — often stand in the way. However, strong leadership drives meaningful progress. Agencies that define program integrity as a core mission — and measure success by how well they prevent fraud — are making meaningful gains.

Making Every Dollar Count

Protecting public dollars is more than possible — it’s imperative. Each dollar lost represents a missed opportunity to help taxpayers rebuild from disasters, support small businesses, or strengthen our national infrastructure. With the right strategy, government programs can move fast, prevent fraud, and deliver better outcomes while strengthening public trust.

At Allocore, we are proud to support this transformation. Our platform uses AI, automation, and process intelligence to help agencies detect fraud in real time, validate identity across systems, and streamline funding processes. We believe in a future where program integrity and speed go hand-in-hand — and where every public dollar works as intended. The technology and strategies exist today to make this vision a reality.

Learn more about how Allocore supports government fraud prevention at https://allocore.com/case-studies/

Tom Coleman is an Executive Vice President for Loan and Grant Programs at Allocore. He previously served as the Chief Financial Officer of the Treasury Department’s Federal Financing Bank. Allocore powers leading government loans, grants, and fraud prevention programs with a unified platform built for efficiency and security. With trillions in loans and grants processed and billions in fraud prevented, Allocore brings the precision of commercial banking technology to the public sector.