Washington Gov. Bob Ferguson has signed an executive order establishing the state’s first chief fraud prevention officer and a statewide workgroup to strengthen oversight of public funds, improve coordination among agencies and expand efforts to detect and prevent fraud.
Executive Order 26-05 creates a coordinated approach to fraud prevention across state government, with an initial emphasis on health and human services programs. Ferguson also announced plans to introduce legislation expanding Washington’s Medicaid False Claims Act to cover fraudulent claims involving all state government programs.
“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.”
The new chief fraud prevention officer will coordinate fraud prevention, detection, investigation and recovery efforts involving health and human services programs administered by executive cabinet agencies.
Those agencies include the Washington State Health Care Authority and the departments of Health; Social and Health Services; Labor and Industries; and Children, Youth and Families.
The position will focus on improving program integrity, strengthening oversight and protecting federal funding. The governor’s office plans to implement the initiative using existing state resources.
The new position will operate separately from the Washington State Auditor’s Office, which investigates fraud allegations and whistleblower complaints, conducts performance audits and provides training and technical assistance.
The chief fraud prevention officer will work with the auditor’s office while concentrating on preventive measures and coordination among agencies under the governor’s authority.
State Auditor Pat McCarthy said her office established a director-level Special Investigations Division earlier this year to strengthen its fraud prevention and detection capabilities.
The executive order also establishes the Public Funds Fraud Prevention and Accountability Workgroup, composed of representatives from executive cabinet agencies.
Co-chaired by the Governor’s Office and the Office of Financial Management, the workgroup will develop a statewide framework for preventing, detecting, reporting, investigating and responding to fraud.
The framework, due by June 30, 2027, will address fraud referrals, recovery of public funds and accountability measures across state government.
The workgroup will also recommend potential changes to state laws and regulations, enforcement authority, contractor suspension and debarment standards, reporting procedures and whistleblower protections.
Another responsibility will be evaluating a proposed public accountability dashboard that could track fraud prevention performance, financial recoveries, corrective actions and implementation progress.
The executive order also directs the Office of Financial Management, Department of Enterprise Services, Washington State Patrol and Criminal Justice Training Commission to develop fraud prevention training programs for state employees.
Training will range from basic fraud awareness and ethics to specialized instruction for employees responsible for fraud prevention and investigators handling financial crimes.
The initiative will also establish a workforce development pathway intended to recruit, train and retain employees specializing in fraud prevention and investigations.
In addition to the administrative changes, Ferguson plans to request legislation during the upcoming legislative session to expand the state’s existing Medicaid False Claims Act.
The proposal would extend civil liability for fraudulent claims beyond Medicaid to other state programs, contracts, grants and loans.
Examples of violations could include overcharging state agencies for goods or services, fraudulently obtaining government contracts and submitting false applications for state grants or loans.
Under the proposal, violators could face liability of up to three times the government’s actual financial losses, along with inflation-adjusted civil penalties for each false claim.
Enforcement would occur exclusively through private whistleblower lawsuits, commonly known as qui tam actions.
Individuals bringing successful lawsuits would receive a portion of the court-awarded recovery, with the remaining funds going to the state. A designated state agency would monitor the cases to ensure Washington receives its share.
According to the governor’s office, 25 states have False Claims Acts covering fraudulent claims against government programs. Washington is among five states whose existing laws are limited to Medicaid-related claims.
The proposed expansion would require legislative approval. The executive order’s administrative initiatives can proceed separately as agencies begin coordinating their fraud prevention efforts and developing the statewide framework.
Photo courtesy of the State of Washington
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