Fraud prevention: There’s an app for that

Fraud prevention: There’s an app for that

A school board member in New Jersey pleaded guilty to wire fraud. A “longtime educator” in Palm Beach County, Florida, resigned from a school board after authorities charged him with fraud and bribery. Nearly a dozen school leaders in Detroit accepted $900,000 in kickbacks in a phony scheme to provide school supplies. A manager of an audio/visual company in Utah pleaded guilty to fraud and theft in his dealings with a local school district.

And that was just in one week.

As we’ve documented on this blog, fraud is an unfortunate reality in our nation’s schools. For that matter, it’s an unfortunate part of providing quality services in across a variety of social needs. The Wall Street Journal recently reported on the indictment of state and local authorities in Flint, Michigan surrounding the locality’s water crisis. Yet the paper lamented that federal officials—those getting their paychecks from Washington, D.C.—at the EPA and in the U.S. Office of Veterans Affairs were not being held to account for ignoring warnings at the Gold King Mine (where a flooded mine ruined a water supply in Colorado last year) and in medical malfeasance, respectively.

Fraud is a serious issue at all levels of government and enforcement is inconsistent, at best.

In 2009, Apple started advertising what was, at the time, breakthrough technology in its latest iPhone by saying, “There’s an app for that,” with “that” being whatever you needed. From finding a restaurant to playing the piano on your phone, developers were building mobile applications that allowed you to access virtually anything you needed at your fingertips. Today, programmers are building applications to help prevent fraudulent use of taxpayer money.

In some states, taxpayers can event submit photos or videos along with anonymous tips about misuse of taxpayer funds. The applications may cost as much as $10,000 to $20,000 to develop, but with the potential losses from fraud totaling in the hundreds of thousands or even millions in taxpayer resources, the upfront cost is worth it.

Furthermore, the next generation of parents and taxpayers, Millennials, are the generation that is most likely to carry and use a mobile device—making these apps a natural fit. The Pew Research Center reports that Millennials are the most likely generation to “use their cellphones in public places for a variety of reasons,” and Nielsen says Millennials “are the largest segment of smartphone owners.” This means the availability of such mobile applications is coming at an excellent time.

Is Your Mobile Phone a Smartphone?

Screen Shot 2016-05-31 at 8.57.03 PM
Source: Board of Governors of the Federal Reserve System, “Consumers and Mobile Financial Services, March 2015,” http://www.federalreserve.gov/econresdata/mobile-devices/2015-appendix-3-consumer-responses-to-survey-questionnaire.htm#Cross-tabulationsForConsumersUseOfM-C1548C7E.

While mobile apps won’t prevent fraud, such developments will help to limit the losses that bad actors cause. Research from the Goldwater Institute explains how mobile technology and education savings accounts, spending accounts that give parents choices for a child’s education, are both coming of age at the same time. Approximately 840,000 children across five states are eligible for the savings accounts. Georgia lawmakers considered legislation to create the accounts in the last session.

Millennial parents are the generation that grew up alongside mobile technology and are already using apps to get a ride from the airport or check a bank account. Flexible spending accounts that allow families to pay for online classes, public school services, private school tuition, or save for college should be designed so that parents can report fraudulent use of such accounts, check their child’s account balance, and make a purchase for a textbook, all with their mobile phone. In traditional schools and programs that give parents choices in education, taxpayers should be able to help protect students with easy, reliable ways to report misuse.

There’s no app for the American Dream, but mobile technology can help protect taxpayer resources and make sure education funding is used as it was intended—to help children succeed.