Around one-twentieth of all spending is diverted by fraud every year. The lowest estimate found was 3% of annual spending, and average rates were 5.22% across 4 reports from 3 sources.
| Datapoint | Source | Value | Type | | Percent of annual spending | 2016 Council of Fraud Examiners | 5% | Survey average | | Percent of annual spending | PKF, University of Pourtsmouth | 5.6% | 382 Observations | Procurement fraud as a % of all spending | PKF, University of Pourtsmouth, Experian | 4.78% | Estimate | | Fraud as a % of all government spending | PKF, University of Pourtsmouth, Experian | 5.5% | Government Statistic |
In their 2016 Report to Nations, the Council of Fraud Examiners provides the following :
- $6.3 Billion was lost in the 2,410 fraud cases examined.
- The Fraud Examiners' average estimate of the total cost of fraud for all organizations was 5% of annual spending each year.
- Median losses from individual frauds that lasted for 60 months or more were estimated at $850,000, and the length of a fraud is directly correlated with its severity.
In their study The Financial Cost of Fraud, Jim Gee and Mark Button write "It is clear that fraud and error losses in any organisation should currently be expected to be at least 3%, probably almost 6% and possibly more than 10%" of expenditure. They also provide the following data, based on a 17 year long examination of 382 fraud prevention efforts:
- The global average loss rate they have observed is 5.6% of annual spending.
- 69% of losses were greater than 3% of annual spending.
- An update notes that public sector fraud accounted for 5.5% of spending by local and central government in the UK from 2013/14.