A Fraud Mitigation Tool for Public Sector Agencies in Malaysia

Abstract

This paper aims to develop a fraud mitigation tool for public sector agencies in Malaysia. Employing a
mixed method, the study was firstly conducted on a sample of 150 respondents consisting of account
personnel from 16 government agencies in one of the states in Malaysia. A survey instrument comprises
of 47 measurement items was designed to identify the level of financial fraud prevention management
practices in government agencies setting. Later, a qualitative stance applied by conducting a focus
group among the accountants of public sector agencies to elicit depth information on how fraud
management practiced in their agencies. The findings indicate that fraud mitigation tool is vital in the
government agencies due to the importance of managing fund allocated by the state government.
Majority of the accountants agreed that lack of integrity is the main factor contributing to the incidence
of financial fraud in the government agencies. Adequate internal control system is established within the
agencies but opportunities coupled with dishonesty allowed such financial fraud to occur. The
respondents agree that people, good governance, technology, and legal element in preventing,
responding, as well as detecting any financial fraud possibilities within the government agencies are
crucial factors for successful fraud mitigation tool framework within the government agencies. This study
only considers the account personnel within one state. For practical implications, the proposed fraud
mitigation tool model can also be utilized by the public sector agencies. In addition, this study provides
important information for decision makers involved in successful implementation of financial fraud
prevention practices among the government agencies.