Improper Payments: Agency Actions Needed to Help Save Taxpayer Dollars
Fast Facts
Improper payments—those that shouldn't have been made or were made in the incorrect amount—are a government-wide issue. Federal agencies estimated $186 billion in FY 2025, for a total of about $3 trillion in payment errors since FY 2003.
Federal law requires agencies to report these estimates annually. Agencies must also provide additional information for programs that had significant payment errors multiple years in a row. But some agencies haven’t always met these requirements.
Our recommendations address this and other issues to improve transparency and save taxpayer money.
This report is the 11th and final in a series on this topic.
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Highlights
What GAO Found
Executive branch agencies are required to report improper payment estimates for each risk-susceptible program. GAO identified seven agencies with programs reporting estimated improper payment rates of 10 percent or higher for 2, 3, or 4 consecutive fiscal years from 2021 through 2024.
Consecutive Fiscal Years of Noncompliance Reported for Agencies’ Improper Payment Rates Since Payment Integrity Information Act of 2019 Implementation
To improve transparency, agencies that are noncompliant under the Payment Integrity Information Act of 2019 (PIIA) are required to report annually to Congress and GAO. The Office of Management and Budget (OMB) provides guidance on PIIA requirements to agencies. However, GAO found that the guidance does not direct noncompliant agencies to submit the required annual reports. Unless OMB updates its guidance, Congress may not have the information it needs to assess agencies’ actions to address improper payments and hold them accountable.
Reporting requirements for noncompliant agencies vary, depending on how many consecutive fiscal years programs are noncompliant with PIIA. GAO found that all agencies with noncompliant programs for 2 consecutive years had either submitted additional program integrity proposals to OMB, as required, or taken other actions to help bring their programs into compliance.
Four of the six agencies with programs found noncompliant for 3 consecutive years submitted the required 3-year noncompliance information to Congress, OMB, and GAO. The Departments of Labor (DOL) and the Treasury did not submit the information timely, and the Treasury did not report to GAO.
All four agencies with programs found noncompliant for 4 consecutive years submitted reports to Congress and OMB as required by PIIA and OMB guidance.
Five of the seven agencies did not have sufficient documented policies and procedures to ensure consistent timely reporting for their noncompliant programs. When agencies do not meet PIIA’s annual and consecutive year reporting requirements, Congress loses visibility into which programs continue to pose elevated risks and whether agencies are taking meaningful steps to address them. Having such policies and procedures will help ensure that Congress receives timely information needed to inform legislative decision-making and support efforts for reducing government-wide improper payments and saving taxpayer dollars.
Why GAO Did This Study
Executive branch agencies have reported cumulative improper payment estimates of about $3 trillion since fiscal year 2003, including $186 billion for fiscal year 2025. To help save taxpayer dollars, it is imperative that agencies prioritize reducing their improper payments and timely report on their efforts to do so.
House Report 117-389, which accompanied the Legislative Branch Appropriations Act, 2023, includes a provision for GAO to provide quarterly reports on improper payments. This is GAO’s 11th and final report.
This report examines actions that agencies have taken to meet certain PIIA reporting requirements for programs that had estimated improper payment rates of 10 percent or higher for 2 or more consecutive years. For programs with reported noncompliance, GAO reviewed relevant laws and OMB guidance and analyzed agencies’ policies and procedures, budget information, and information on PaymentAccuracy.gov.
Recommendations
GAO is making six recommendations, including one to OMB to clarify its guidance for agencies to report required annual information, and one each to the Departments of Labor, Education, Health and Human Services (HHS), the Treasury, and Agriculture (USDA) to design and implement a process to help ensure tracking and monitoring of PIIA reporting requirements for their programs and to help save taxpayer dollars. DOL, Education, HHS, Treasury, and USDA agreed with the recommendations. OMB did not provide comments.
In addition, GAO’s prior work has highlighted numerous actions that agencies and Congress can take to reduce improper payments and fraud.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget | The Director of the Office of Management and Budget should clarify that agencies found noncompliant with PIIA criteria should report required annual information to GAO and the appropriate authorizing and appropriations congressional committees. Pursuant to 31 U.S.C. § 3353(b)(5), this information should include (1) a list of programs that have been noncompliant for 1, 2, 3, 4, or more years and (2) actions planned to bring the programs or activities into compliance. (Recommendation 1) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of Labor | The Secretary of Labor should design and implement a process, documented in policies and procedures, to help ensure the tracking, monitoring, and timely submission of required PIIA-noncompliant program information to appropriate authorizing and appropriations congressional committees, OMB, and GAO. (Recommendation 2) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of Education | The Secretary of Education should design and implement a process, documented in policies and procedures, to help ensure the tracking, monitoring, and timely submission of required PIIA-noncompliant program information to appropriate authorizing and appropriations congressional committees, OMB, and GAO. (Recommendation 3) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should design and implement a process, documented in policies and procedures, to help ensure the tracking, monitoring, and timely submission of required PIIA-noncompliant program information to appropriate authorizing and appropriations congressional committees, OMB, and GAO. (Recommendation 4) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of the Treasury | The Secretary of the Treasury, in coordination with the Commissioner of Internal Revenue, should design and implement a process, documented in policies and procedures, to help ensure the tracking, monitoring, and timely submission of required PIIA-noncompliant program information to appropriate authorizing and appropriations congressional committees, OMB, and GAO. (Recommendation 5) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of Agriculture | The Secretary of Agriculture should design and implement a process, documented in policies and procedures, to help ensure the tracking, monitoring, and timely submission of required PIIA-noncompliant program information to appropriate authorizing and appropriations congressional committees, OMB, and GAO. (Recommendation 6) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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