8.12

Risk Assessment

Principle 8 - Assess Fraud, Improper Payment, and Information Security Risk

Attribute 8.12 - Management considers improper payment risk factors, both internal and external, which may include the following:

• whether the program or activity is new to the entity;
• the complexity of the program or activity;
• the volume of payments made through the program or activity;
• whether the payments or payment eligibility decisions are made through external parties;
• recent major changes in program funding, legal authorities, practices, or procedures;
• the level and experience of and quality of training for personnel responsible for making payment eligibility determinations or verifying that payments made are accurate;
• the extent to which the entity relies on potential recipients self-certifying their own eligibility;
• identified internal control deficiencies that might hinder accurate payment processing;
• similarities to other programs or activities that have reported improper payment estimates or been deemed susceptible to significant improper payments;
• improper payment estimates previously reported for the program or activity, or other indicator of potential susceptibility to improper payments;
• whether the program or activity lacks the information or database to confirm eligibility or verify the accuracy of the payment; and
• the risk of fraud related to the program or activity.

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Jamie's Story

No examples are available to illustrate governance gaps for this attribute.

Election Anomalies

The Green Book's Principle 8 addresses Assess Fraud, Improper Payment, and Information Security Risk. Obviously, improper payments is not a concern during the Assessment of Election Anomalies. However, improper payments by MC county may exist, but would require a separate assessment.

The Green Book's emphasis on fraud and information security as separate risk assessment activity is intentional. MC may be able to defer to the Arizona Secretary of State's Election Procedure Manual as general steps taken to ensure the integrity of election results. Fraud occurs when loopholes are identified and exploited by the fraudsters. The implementers of election services (i.e., Arizona Counties) are better positioned to detect fraud and assess the risk of fraud because they are handling the data, not the state. Hence, governance gaps may be identified from patterns of poor assessment and response to risk with respect to election fraud and information security.

Maricopa Dropbox Collection (2020)

Governance issues identified from Arizona Attorney General's Office 2020 General Election Investigation of Arizona Senate allegations of Maricopa County Election Department - Drop Box Collections issues. This Green Book Attribute 8.12 contains the following fraud-related items, which are compared to the AZ AG's inspector's report:

• the complexity of the program or activity - Yes, early ballot processing is complicated.
• the volume of [payments early ballots] made through the program or activity - Yes, there was an unusually high number of early ballots because of the Public Health mandates implemented during the Covid-19 pandemic.
• identified internal control deficiencies that might hinder accurate payment processing - Yes, all of the procedure violations increased the susceptibility to fraud, even though no evidence of actual fraud could be detected.
• whether the program or activity lacks the information or database to confirm eligibility or verify the accuracy of the payment - Yes, The voter registration database is obviously corrupted if over 56,000 early ballots were undeliverable.
• the risk of fraud related to the program or activity - Yes, the fraud was conducted in the Arizona County that had the greatest impact on the electoral college during a presidential election.