Gov. Bob Ferguson signed an executive order Monday that creates Washington’s first chief fraud prevention officer and a statewide workgroup to coordinate how state agencies prevent fraud.
Ferguson also said he will ask lawmakers next session to expand the state’s Medicaid False Claims Act so it covers all false claims against Washington state, according to the governor’s office.
“Washington takes fraud seriously,” Ferguson said. “As we continue to face challenging state budgets and devastating cuts from the federal government, it is more important than ever to protect every dollar. My executive order unifies our prevention efforts across state government and expands them.”
Chief Fraud Prevention Officer
The chief fraud prevention officer will oversee and coordinate work to prevent, detect, investigate and recover fraud in health and human services programs run by the governor’s cabinet agencies. Those agencies include the Department of Health, Department of Social & Health Services, Department of Labor & Industries, and Department of Children, Youth & Families.
The officer will work with those agencies to protect federal funding. Gov. Ferguson plans to pay for the work with existing resources.
How it differs from the state auditor’s role
The governor’s office said the new position is separate from the work of the Washington State Auditor. The auditor’s office investigates fraud allegations and whistleblower reports, audits state agencies and local governments, and trains other agencies. The new officer will work with the auditor but focus on stopping fraud before it happens inside the governor’s agencies.
State Auditor Pat McCarthy welcomed the order.
“A loss of public resources anywhere diminishes the public’s trust in government overall,” McCarthy said. “I applaud the governor’s efforts to improve fraud prevention and detection. Earlier this year I created a director-level Special Investigations division because, like the governor, I believe fraud prevention efforts need to be elevated across government.”
A statewide fraud plan
The order also creates the Public Funds Fraud Prevention & Accountability Workgroup, made up of representatives from the governor’s cabinet agencies.
By June 30, 2027, the workgroup must produce a statewide plan for preventing, detecting, reporting, responding to, and recovering from fraud. The workgroup will also recommend a public online dashboard showing statewide fraud trends, money recovered and corrective actions taken.
New training for state workers
The order directs the Office of Financial Management, the Department of Enterprise Services, the Washington State Patrol and the Criminal Justice Training Commission to create new fraud training for state employees. The courses will cover basic fraud awareness and ethics, advanced training for fraud prevention staff, and financial crimes training for investigators. The order also sets up a career path meant to develop and keep fraud prevention staff in state government.
Whistleblowers could share in recoveries
The bill Ferguson plans to propose would expand Washington’s current law, which covers only Medicaid fraud, to all false claims against the state. That includes overcharging the government, fraudulently seeking a contract, or lying on an application for a government loan or grant.
According to the governor’s office, 25 states have False Claims Acts, and Washington is one of only five whose law covers only Medicaid.
Violators would owe up to three times the damages the state suffered, plus civil penalties for each false claim, adjusted for inflation.
Only private whistleblowers could enforce the law, through what’s known as a “qui tam” lawsuit. The person who reports the fraud would receive a percentage of the penalties the court awards, and the state would get the rest. A state agency would track these lawsuits to make sure Washington collects its share. The bill will be debated in the upcoming legislative session.
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