FRAUD IN GOVERNMENT IS EXAMINED IN HEARINGS BEFORE THE SUBCOMMITTEE OF THE APPROPRIATIONS COMMITTEE WITH SPECIAL TESTIMONY FROM THE U.S. GENERAL ACCOUNTING OFFICE (GAO). GAO, WHICH RECEIVES THE APPROPRIATE LEVEL OF FUNDING THROUGH THIS SUBCOMMITTEE, TESTIFIED CONCERNING ACTIVITIES INVOLVED IN ESTABLISHING A SPECIAL TASK FORCE ON PREVENTION OF FRAUD. THE AGENCY HAD ALREADY AGENCIES HAD EFFECTIVE POLICIES TO COMBAT FRAUD. TESTIMONY COVERS THE WAYS IN WHICH FEDERAL PROGRAMS ARE EXPLOITED, THE PROCEDURES USED BY AGENCIES, THE ESSENTIAL ELEMENTS OF AN ANTIFRAUD PROGRAM, FINANCIAL ASSISTANCE PROGRAMS AND DIFFICULTY WITH THEIR ADMINISTRATION, AND DISCUSSES THE FUNCTION OF THE PROPOSED SPECIAL TASK FORCE, WHICH WOULD ANALYZE THE REPORTS OF INTERNAL AUDITORS IN EACH AGENCY REVIEWED. SPECIFIC METHODS OF DEALING WITH FRAUD ARE INCLUDED IN THE HEARINGS OF A TOLL FREE HOT LINE TO BE USED BY CITIZENS WHO SUSPECT FRAUD, METHODS OF FOLLOWUP OF COMPLAINTS, AND THE RESOLUTION OF INTERNAL AUDIT REPORTS. DIFFICULTIES ENCOUNTERED BY THE JUSTICE DEPARTMENT IN ITS EFFORTS TO MONITOR, ASSIST AND COORDINATE THE ANTIFRAUD EFFORTS OF VARIOUS AGENCIES ARE CITED, AS WELL AS THE DIFFICULTIES ENCOUNTERED BY THE AGENCIES IN BUILDING CASES FOR SUCCESSFUL JUSTICE DEPARTMENT PROSECTION. TESTIMONY ON A RELATED MATTER IS INTRODUCED IN THE DISCUSSION OF FRAUD AND ABUSE IN THE PENNSYLVANIA MEDICAID PROGRAM. GAO REPORTS PERTAINING TO THIS PROGRAM ARE LISTED. (RFC)