The federal government loses between $233 billion and $521 billion annually to fraud, according to GAO’s government-wide estimates based on data from fiscal years 2018 through 2022. Additionally, federal improper payment estimates have totaled about $2.8 trillion since FY 2003—and the actual amount may be significantly higher because this is based on a small number of programs that report these numbers. For instance, 16 agencies reported a total of about $162 billion in improper payments across 68 programs in FY 2024. Most (75%) of these improper payments were concentrated in 5 areas.
Programs with the Largest Percentage of Government-Wide Improper Payment Estimates, FY 2024
Fraud is obtaining something of value through willful misrepresentation. Fraud can sometimes involve benefits that do not result in direct financial loss to the government (such as passport fraud).
Improper payments are payments that should not have been made or that were made in the incorrect amount; typically they are overpayments. While all fraudulent payments are considered improper, not all improper payments are due to fraud.
Waste, abuse, and mismanagement are related but distinct concepts from fraud and improper payments. Waste is when individuals or organizations spend government resources carelessly, extravagantly, or without purpose. Abuse of federal resources occurs when someone behaves improperly or unreasonably, or misuses a position or authority.
Reducing both fraud and improper payments is critical to safeguarding federal funds, ensuring that federal agencies execute their missions effectively, and making sure that the public maintains trust in the government.
GAO’s Tools for Fighting Fraud & Improper Payments
Federal agencies have Inspectors General, who are the front line for investigating fraud in their respective agencies. While GAO does not prosecute fraud, we do identify fraud trends, risks, and estimates across the government. And we’ve created tools that can help fight fraud and improper payments.
FraudNet: If you suspect fraud, waste, abuse, or mismanagement of federal funds, you can report your concerns to FraudNet.
Fraud Risk Framework: We’ve identified leading practices for managing fraud risks and organized them into a conceptual framework. This framework includes activities to prevent, detect, and respond to fraud, as well as structures and environmental factors that can help federal managers mitigate fraud risks.
Anti-Fraud Resource: We’ve pulled together resources about specific fraud schemes that affect federal programs, their underlying concepts, and how to combat them.
The Green Book: GAO’s “Green Book” sets standards for federal internal controls. Robust internal controls can help run operations effectively and efficiently and reduce both fraud and improper payments.
Framework for Emergency Assistance Programs: Our oversight has shown that federal agencies can better plan for and take a more strategic approach to managing improper payments in emergency assistance programs. This framework provides Congress and federal agencies with an overall approach to preventing and reducing improper payments in emergency assistance programs.
Actions for Federal Agencies and Congress
We’ve also identified a number of actions that federal agencies and Congress could take to reduce the risk of fraud and improper payments.
For example:
Congressional requirements. Congress could reinstate the requirement that agencies report on their antifraud controls and fraud risk management efforts in their annual financial reports. It could also require that all new federal programs distributing more than $100 million in any one fiscal year provide more timely reports on improper payments.
Data sharing. Congress should make permanent the requirement for the Social Security Administration to share its full death data with Treasury’s Do Not Pay system to improve identity verification.
Statute of limitations. Congress previously extended the statute of limitations for criminal and civil enforcement for all forms of fraud in the Paycheck Protection Program and COVID-19 Economic Injury Disaster Loans program from 5 years to 10 years. Congress should similarly extend the statute of limitations for fraud in the Unemployment Insurance and Employee Retention Credit programs.
Emergency preparedness. Federal agencies could better prepare for future emergencies (like COVID-19, hurricanes, and wildfires) by doing more to manage the risk of improper payments and fraud before emergencies occur. For instance, agencies could identify and assess risks, design procedures to verify program eligibility, monitor their effectiveness, and get information on improper payments and potential fraud. Self-certifications should also be avoided.
Program errors. Agencies should continue to reduce the number of improper payments in their programs—including by learning from each other. For instance, some agencies have improved the accountability of senior leaders for their programs. Others have used new technology to automate the payment process.
Ineligible recipients. Agencies should ensure that funds aren’t paid to ineligible beneficiaries or providers. For example, Medicaid should ensure that claims are not paid to ineligible medical providers, including those who have suspended or revoked medical licenses.
Data collection. Agencies should improve their collection and use of data for preventing and detecting fraud. For example, grantmaking agencies can provide guidance to grantees and subrecipients on collecting complete and consistent data to better support eligibility determinations and fraud risk analysis.
