Sophia H. Pretrick, CFE, is the investigative advisor in the Compliance Investigation Division of the Office of the Pohnpei State Public Auditor in the Federated States of Micronesia (FSM). She has worked in the anti-fraud profession for nearly 20 years and has seen firsthand how fraud can directly affect the well-being of citizens in the small island states of FSM. She hopes to continue to spread anti-fraud knowledge within her community and join forces with other anti-fraud professionals in the Micronesian region.

A case of conspiracy and corruption

I became passionate about fighting fraud in the early stages of my career while employed at the Office of the National Public Auditor (ONPA) of the FSM. I was assigned to the Compliance Investigation Division (CID), which was tasked to review and investigate instances of fraud, waste and mismanagement of FSM national government funds.

One of the first cases I worked involved conspiracy and corruption between government officials, employees and a private company. The government allocated funds intended for public needs — such as roads, schools and medical dispensaries — yet they were being diverted for personal and political campaign benefits.

The private company submitted fictitious billings which cost the government about $2.1 million in fraudulent payments, and the collusion occurred over a span of five years. The government’s financial transaction records looked legitimate, showing construction materials, office and school supplies, but in reality, it was all bogus. Theses goods and services that were supposed to be provided were never delivered. Instead, the private company was releasing goods and cash to the government officials and their constituents.

The first lesson in my anti-fraud career

I learned early on that fraud is not like any other crime. It is complex, hidden and involves sophisticated transactions and schemes. That first case triggered a passion to expand my skills and knowledge in the field. My interest grew when I saw the impact of our work. We help discover and stop fraud, but more importantly, we improve the lives of our people by making sure that government funds and foreign aid goes to where it will do the most good. The public’s trust should never be eroded by fraud and corruption.

I worked for ONPA for more than 12 years, during which time I received my CFE and later became the chief investigator for FSM ONPA. During those years, I acquired the skills and knowledge to conduct more thorough fraud investigations and develop better detection and prevention programs. At that time, we were mostly doing reactive investigations.

Raising fraud awareness in the FSM

In 2009, I initiated and launched the first FSM Fraud Awareness Program (FAP), a public awareness and education program. I conducted prevention and outreach for public officials, government employees, schools and citizens. I talked about what fraud is, how fraud impacts government operations and what steps we can all take to combat it.

These initiatives and activities prompted the other State Public Auditor’s Offices in Yap, Chuuk, Kosrae and Pohnpei to gain interest in implementing their own investigation unit. This led me to my post in Yap and now currently working for the newly established Compliance Investigation Division of the Pohnpei Office of the Public Auditor (POPA).

Working in a unique environment

I believe having more anti-corruption measures in the FSM is critical. As we know that no country, big or small, is immune to corruption. However, small developing countries are more susceptible to fraud due to lack of transparency, accountability, internal controls, enforcement and prosecution. Also, the Public Auditors Offices in the FSM states formerly had no fraud investigation capacity — they only had their audit functions.

Since the majority of funds from the FSM national government are channeled through the state governments, these initiatives are essential to design, build and install greater anti-fraud and corruption controls in the states that form FSM. Having these small but strong anti-fraud investigation units within the Public Auditors are effective due to the Public Auditor’s independence. In a small place like FSM, it is important to have the authority to work independently without intimidation and manipulation by other parties.

These investigation units were not only created to identify potentially fraudulent activities, but to also look at administrative weaknesses and system deficiencies. In addition, these units also have defined reporting mechanisms, which encourage the public to be more vigilant in identifying and reporting suspicious fraud-related activities. As a result, it will help to expose and minimize fraudulent activities, reduce potential loss and increase the public trust.

Challenges came from many directions during the creation of these units, and some still exist today. In addition to political, economic and financial challenges, there are external and traditional culture challenges. As a small island nation, the people of FSM are deeply rooted in strong family, community, religious and traditional ties. As such, investigating and exposing fraudsters can be a sensitive matter.

To help address this, we honestly, openly and critically consider these challenges and incorporate appropriate responses into our systems and awareness presentations. We talk about disclosures of conflicts of interest and how to properly mitigate these issues by making a right and just decision based on what is in the best interest of the government and the people.

Contributing to something bigger than myself

My most memorable project was during my tenure in Yap. I was hired to assist Yap Public Auditor’s Office to start up their investigation unit. It was for 18 months and I had to leave my family behind on Pohnpei, which was a huge sacrifice. I took a leap of faith and put my trust in God to give me the courage to do the work because I believe in it, what it stands for and what it means for our people. Being part of this profession, I believe I’m contributing to something bigger than myself.

For the duration, I did my best to adapt and learn, and I was grateful for the support and cooperation from key officials in implementing the project. It was soon apparent that we all had the same goal to work together to promote good governance, integrity and reduce fraud for the public’s benefit.

In those 18 months, I put appropriate investigative protocols in place and built the capacity of the office to better address fraud and corruption. One of the most gratifying parts of the project was that one of the staff that I was training became a CFE. As of today, the unit is still working effectively and efficiently on its own.

Part of our FAP was also doing education awareness with the schools and young people. Increasing youth participation in the fight against corruption is important as they are the leaders of tomorrow and agents of change.

I worked with a group called the Pohnpei Youth-4-Change, where we’ve done joint work in Pohnpei, including training the trainers, creating a school education program and empowering youth participation in government. We also co-hosted the International Anti-Corruption Day, where the theme is “Cultivating Creativity Against Corruption.”

They used their creative skills to voice out through songs, skits, poems and video clips in a more nonthreatening and positive approach. We may start small, but I believe the ripple effect will increase and exhibit the benefits of anti-corruption initiatives in young people who are our future leaders.

It’s more than just a career

Becoming a CFE has had a significant influence in my career, not just professionally, but also on a personal level. Being a CFE has increased my skills and given me the knowledge and the ability to do anti-fraud work far more effectively and efficiently. I have learned so much throughout the years using the tools, training and techniques provided by the ACFE.

The ACFE resources cultivate a unique skill set and combined disciplines. The CFE credential also allows me to excel and connect all the three major facets of prevention, detection and investigation. I’m also pleased to announce that we have a couple of CFEs in the FSM, from the State of Yap, Chuuk, Pohnpei and the FSM National Government. Altogether, we have five CFEs in the nation with a couple of associate members who are studying to get their certification. It is my hopes that we create an ACFE Chapter for the Micronesian region. I know we also have CFEs in the Republic of the Marshall Islands, Guam and CNMI. This is something we all should move toward to help connect, share and fight this common cause.

In our small nation of many islands, we may be few in number, but the more deterrence, and the more aware the citizens are, the more we can reduce and control fraud and corruption. As part of this profession and as a CFE, we are paddling together for a fraud-free FSM.

ACFE membership is open to individuals of all job functions, industries and levels of experience who are interested in the prevention, detection and deterrence of fraud. Our mission is to support you by providing access to the knowledge, resources and training you need to do your job now and at every stage of your career. If you want to level up your anti-fraud career, we can help.

Learn more

Featured