They can always track the transaction in bitcoin and cryptocurrencies as the transactions is transparent in the public ledger, the problem is when the authorities didn't even know what the blockchain is and how to use it. How come could they tract transactions in that way? That is why some government have already hiring blockchain experts to help them with issues regarding these. If government isn't really concern about this new technology, lots and lots of people will just fall to frauds.
This isn't really a problem, you don't need every citizen to know how to verify Bitcoin transactions, that would be a task for activist and journalists. You don't need to hire any blockchain experts for that, anyone with basic understanding of Bitcoin could do that.
People say that if bitcoin has been used it would have been more transparent, how?
You would just see thousands tx going from one address to thousands other, how would that help?
The fraud was no because of the way money was sent, the fraud was committed with false beneficiaries, bitcoin or cash or bank transfers the sums would have been still been paid and the same would have happened.
Yes, Bitcoin wouldn't eliminate all forms of fraud, it would only make some forms of fraud that rely on fake transactions harder to execute. But it's all just a theory anyway, no way any government in this world would adopt Bitcoin.