The Bureau of Special Investigations is another important function of the State Auditor's Office. It is charged with investigating complaints of fraudulent claims or wrongful receipt of payment or services from public assistance programs. BSI examiners work out of five offices throughout the state investigating referrals from the Department of Transitional Assistance and its programs - Transitional Assistance to Families with Children, Emergency Aid to Elders, Disabled and Children and the Supplemental Nutrition Assistance Program as well as MassHealth and the Department of Early Education and Care.

During fiscal year 2015, BSI completed over 10,000 investigations of suspected fraud in such programs as Medicaid, cash assistance, employment services, food stamps, and personal care attendants. During this period, they identified a record $13.7 million in fraud in these programs, a 44 percent increase over the previous year. The increase does not necessarily indicate a increase in fraud, but rather is reflective of an increased effectiveness of the agency to identify fraudulent behavior.

BSI examiners work with dozens of state agencies in tracking fraudulent claims. Investigations where examiners document illegal activity are turned over to the State Attorney General, ten District Attorneys' Offices, and the U.S. Attorney for potential criminal action and recovery of funds.

While the bulk of cases are referred from state agencies, the general public plays a vital role in reporting fraud. The State Auditor's Office has an online form to report public assistance fraud. All complaints are kept confidential.