THE GAO HAS IDENTIFIED VULNERABLE TARGETS OF FRAUD AND RELATED WHITE-COLLAR CRIMES IN SUCH AGENCIES AS THE DEPARTMENTS OF AGRICULTURE, LABOR, TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT THROUGH GAO'S MID-1976 STUDY. MOST IMPORTANT, THE AGENCIES HAVE NOT ESTABLISHED MANAGEMENT INFORMATION SYSTEMS TO DEAL WITH THE FRAUD PROBLEM, DO NOT KNOW THE AMOUNT OF IDENTIFIED FRAUD IN THEIR PROGRAMS, AND HAVE NO CONTROLS FOR ESTIMATING FRAUD POTENTIAL. UNTIL RECENTLY, AGENCIES HAD NOT RENDERED FRAUD DETECTION A HIGH PRIORITY BECAUSE THEIR OVERRIDING CONCERN HAD BEEN PROGRAM EXECUTION. IN ADDITION, AGENCY INVESTIGATORS OFTEN HAVE NOT HAD THE BACKGROUND AND EXPERIENCE TO EFFECTIVELY DETECT AND IDENTIFY FRAUD. THE ADVENT OF NEW SYSTEMS OF DEALING WITH PROGRAM BUSINESS, ESPECIALLY THE COMPUTER, HAS MADE OLD SYSTEMS OF CHECKS AND BALANCES OBSOLETE. HOWEVER, AGENCIES HAVE BEGUN TO REACT TO THE CALL FOR ANTIFRAUD MEASURES WITH SEVERAL AGENCIES ADMINISTRATIVELY SETTING UP AN INSPECTOR GENERAL TYPE OPERATION. A GAO TASK FORCE FOR THE PREVENTION OF FRAUD HAS BEEN ESTABLISHED TO EVALUATE THE ADEQUACY OF THE MANAGEMENT CONTROL SYSTEMS IN FEDERAL AGENCIES THAT ARE NECESSARY FOR FRAUD PREVENTION AND TO ASSESS THE ADEQUACY OF FOLLOWUP AND CORRECTIVE ACTION TAKEN ON REPORTS OF AUDITORS AND INVESTIGATORS. GAO WILL WORK PARTICULARLY TO DEVELOP A PROGRAM OF CHECKS AND BALANCES AND INTERNAL CONTROLS, A PROGRAM PARTICULARLY NEEDED FOR COMPUTER OPERATIONS. CONGRESSIONAL INTEREST HAS BEEN EXEMPLIFIED IN ITS FOREIGN CORRUPT PRACTICES ACT WHICH CALLS FOR INTERNAL ACCOUNTING CONTROLS. GAO IS ALSO ATTEMPTING TO REVIEW ITS STANDARDS FOR AUDIT OF GOVERNMENTAL ORGANIZATIONS, PROGRAMS, ACTIVITIES, AND FUNCTIONS. FINALLY, THE ETHICS IN GOVERNMENT ACT OF 1978 SHOULD LEND ENCOURAGEMENT TO EMPLOYEES TO IMPROVE THEIR CONDUCT AND MAINTAIN THEIR INTEGRITY. (MHP)