Federal government made $186B in improper payments last fiscal year

A new report by the nonpartisan Government Accountability Office (GAO) found that improper payments by the federal government rose to $186 billion in fiscal year 2025.

The GAO found that federal agencies' estimate of improper payments rose $24 billion in fiscal year 2025 from the previous fiscal year. The increase was largely due to programs that didn't report in fiscal year 2024 but did report estimates of improper payments last year.

It assessed that overpayments accounted for about $153 billion, or roughly 82%, of the $186 billion in overpayments last fiscal year.

"Federal agencies must do more to protect taxpayer dollars from the errors that drive improper payments," said Orice W. Brown, acting comptroller general and head of the GAO. "This $186 billion problem demands urgent action – agencies need stronger controls, better data, a commitment to accountability, as well as robust congressional oversight."

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The GAO's estimate of improper payments in fiscal year 2025 was based on reporting from 64 federal programs across 15 federal agencies, although just 73% of improper payments were concentrated in five program areas.

The bulk of the improper payments were found in Medicare, Medicaid, the Earned Income Tax Credit (EITC), the Supplemental Nutrition Assistance Program (SNAP) and the Shuttered Venue Operators Grant Program.

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A trio of programs under Medicare accounted for $57 billion in improper payments, while Medicaid added another $37 billion. The EITC was estimated as making $21 billion in improper payments, while SNAP and the Shuttered Venue Operators Grant Program each accounted for $10 billion in the analysis.

A number of programs reported high improper payment rates, with 19 programs reporting estimates of more than 10%, while six programs' estimates topped 25%.

The GAO's report isn't a comprehensive estimate of improper payments by all federal agencies and programs because some didn't provide estimates.

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The GAO said the government-wide estimate "does not include some programs that were determined to be susceptible to significant improper payments." 

"For example, the $186 billion estimate does not include improper payments made under the Temporary Assistance for Needy Families (TANF) program," GAO noted.

The report noted that the GAO has "made numerous recommendations to agencies and Congress to help reduce payment errors by enhancing transparency and accountability of federal spending."

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"These include designating all new federal programs making more than $100 million in payments in any one fiscal year as susceptible to improper payments and requiring agencies to develop internal control plans that can be rapidly deployed for future emergency funding," the GAO said.