This study aims to determine the role of the Internal Supervisory Unit in preventing fraud and minimizing losses by identifying the internal control system mechanism in supporting fraud prevention and minimizing losses at PERUMDAM Tirta Tuah Benua Kutai Timur. Informants in this study are the Internal Supervisory Unit manager, bookkeeping staff and assistant transmission and distribution managers as a parties directly involved in the process of financial transaction flow and PERUMDAM operational activities. This research uses a case study approach with data collection methods through semi-structured interviews, observation and documentation. The results of this study indicate the role of the Internal Supervisory Unit in preventing fraud and minimizing losses at PERUMDAM Tirta Tuah Benua Kutai Timur. First, the Internal Supervisory Unit plays a role in providing an understanding of the importance of fraud prevention and attention to potential losses in the PERUMDAM environment. Second, the Internal Supervisory Unit plays a role in investigations related to collecting evidence and identifying fraudsters. Third, the Internal Supervisory Unit plays a role in evaluating the identified areas by providing appropriate improvement recommendations. Fourth, the Internal Supervisory Unit plays a role in risk assessment and risk management system development. Fifth, the Internal Supervisory Unit plays a role in independent supervision and examination through the internal audit program. The presence of the Internal Supervisory Unit can help optimize PERUMDAM's performance through its role in internal control. The results of this study also describe the advantages and challenges faced by the Internal Supervisory Unit in carrying out its role in preventing fraud and minimizing potential losses at PERUMDAM Tirta Tuah Benua Kutai Timur.