Protecting the Public Purse: How Trust and Technology Can Prevent Government Payment Fraud

Governments deliver billions of dollars each year through digital payment programs that underpin income support, disability benefits, tax refunds and credits, disaster relief, grants and education funding across federal, state and local levels.

As governments expand digital service delivery and administer increasingly interconnected funding arrangements, the volume, speed and sensitivity of payments have grown dramatically. So too has the attack surface.

Fraud in this environment is no longer limited to individuals manipulating claims. In Australia, it increasingly involves organised criminal syndicates exploiting digital systems and high-volume government payment programs.

Splunk’s new report, Protecting the Public Purse: How Trust and Tech Can Prevent Government Payment Fraud examines this shift and its implications for Australian public administration. In 2023–24 alone, more than 288,000 fraud allegations were reported across the Commonwealth, while serious and organised crime is estimated to cost the nation up to $82.3 billion annually.

Government payment fraud is a systemic vulnerability within modern digital service delivery—and it requires urgent reform.

Elevating Payment Fraud to National Security Priority

Government payment fraud is no longer just a compliance issue. It has evolved into a serious organised crime and national security challenge, with criminal networks operating across programs, identities, providers and jurisdictions. Many agencies, however, continue to rely on legacy platforms and post-payment recovery models, creating a growing imbalance between the speed of threats and the systems designed to manage them.

As Paul Curwell, Principal Forensic & Financial Crime at Deloitte, notes:

Governments must move from reactive recovery to prevention-led approaches, embedding trust, oversight and accountability into technology-enabled fraud controls, supported by human-in-the-loop safeguards and explainable decision-making.

As major agencies underpin essential services and public trust, payment systems should be treated as critical infrastructure, with governance and security controls aligned to the scale and importance of what they protect. It also means redesigning payment systems as real-time transaction risk engines rather than relying on legacy form-based processing. New payment programs should not be built on outdated infrastructure and processes.

Breaking Down Fragmentation

A central finding of the report is that fraud thrives in fragmented environments. Individual agencies often see only a portion of the overall risk picture, while organised criminal networks operate across programs, identities, providers and jurisdictions. Without a connected view of claims, identities and money flows, coordinated activity can remain undetected.

Breaking down data siloes and building a centralised data intelligence capability is therefore critical. Linking information across programs and jurisdictions enables agencies to identify patterns earlier, respond with greater precision and disrupt fraud before payments are made.

From Costly Investigation to Pre-Payment Interdiction

Shifting from post-payment recovery to pre-payment interdiction is another cornerstone of reform. Once funds have left the system, law enforcement investigations and recovery efforts are costly, slow and frequently unsuccessful. A more effective model applies real-time risk scoring, behavioural analytics and dynamic verification to slow, hold or stop high-risk transactions before money is released.

This shift also requires agencies to rethink how success is measured. Speed of payment remains important, particularly during times of crisis, but it cannot be the only benchmark.

Broadening performance metrics to include false-positive rates, fraud losses prevented, time taken to detect and hold suspicious activity, and the impact on genuine claimants helps create a more balanced framework.

Establishing and regularly reviewing key performance indicators around system integrity—not just timeliness—supports more resilient, transparent and trustworthy payment systems. Public confidence depends not only on how quickly funds are delivered, but on the assurance that those payments are legitimate and secure.

Modern Analytics in Action

Splunk’s work with governments globally highlights the impact of analytics-led fraud prevention.

During the COVID-19 pandemic, the New York State Department of Labor used Splunk to identify 1.5 million fraudulent claims and prevent more than US$32 billion in attempted theft, reducing investigation times from days to minutes.

These outcomes show what is possible when payment systems are modernised and designed to detect risk in real time and support human decision-making with clear, explainable insights.

Building Resilient Payment Ecosystems

The challenge of government payment fraud is urgent and evolving. As criminals become more sophisticated, governments must respond with equally advanced, prevention-led strategies that prioritise trust, transparency, and the security of public funds.

Splunk works closely with partners such as Deloitte and Amazon Web Services to help public sector organisations and other critical industries strengthen their defences against fraud and build resilient, trustworthy payment systems for the future.

To explore the full set of recommendations, download Protecting the Public Purse: How Trust and Tech Can Prevent Government Payment Fraud.

You can, of course, deep dive more of these topics by watching more sessions here or registering to attend Cisco Live 2026 in Las Vegas (May 31 - June 4); or continue to check in with the Splunk blog for regular updates on all of the latest information in AI, DevOps, IT, and security operations.