8.06

From Arizona Citizen Voice

Risk Assessment

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

Attribute 8.06 - Management considers the types of fraud that could impact the entity to provide a basis for identifying and analyzing fraud. Fraud involves obtaining something of value through willful misrepresentation. Types of fraud may include the following:

  • Fraudulent reporting - Intentional misstatements or omissions of amounts or disclosures in financial or nonfinancial reports through willful misrepresentation to deceive report users. For fraudulent financial reports, this could include intentional alteration of accounting records, misrepresentation of transactions, or intentional misapplication of accounting principles. For fraudulent nonfinancial reports, this could include intentional misrepresentation of information.
  • Misappropriation of assets - The unauthorized acquisition, use, or disposal of an entity's assets through willful misrepresentation. This could include efforts to conceal theft of property, embezzlement of receipts, bid rigging, fraudulent payments, or misrepresentation of eligibility to obtain benefits.
  • Other illegal acts - Intentional violations of laws or regulations through willful misrepresentation that may be related to financial or nonfinancial activities. This could include certain types of corruption, bribery, extortion, and cybercrimes.

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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. Each of the following links presents ethical issues:

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