Federal Awards: Selected Programs Did Not Fully Include Identified Practices to Enhance Oversight and Fraud Prevention
Fast Facts
It can be difficult to find and prevent fraud in the federal programs that award billions of dollars each year. That's why it's important for agencies to assess and manage all of their fraud risks.
We looked at how 5 programs oversee awards and prevent fraud. But—contrary to leading practices and requirements—4 of them didn't have or document key processes for preventing fraud. This increases their risk of fraud.
Our 12 recommendations address this and other issues.
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Highlights
What GAO Found
GAO identified nine requirements and leading practices to oversee and prevent fraud, waste, and abuse in awards, including grants, contracts, and loans. As shown in the table, the Federal Communications Commission’s Universal Service Program for Schools and Libraries had documented procedures for all nine. GAO found that the other four selected programs—the Department of Commerce’s CHIPS for America Fund, Environmental Protection Agency’s Greenhouse Gas Reduction Fund (now repealed), Department of Health and Human Services’ Health Center Program, and Department of Energy’s Regional Clean Hydrogen Hubs—did not always incorporate these requirements and leading practices in their documented policies and procedures.
GAO Assessment of Agencies’ Design of Selected Requirements and Leading Practices for Selected Programs
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Selected requirements and leading practicesa |
Universal Service Program for Schools and Libraries |
CHIPS for America Fund |
Greenhouse Gas Reduction Fundb |
Health Center Program |
Regional Clean Hydrogen Hubs |
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1. Dedicated entity to lead fraud management activities |
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2. Senior Management Council to assess and monitor deficiencies in internal control |
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3. Maintain agencywide and program-specific risk profiles |
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4. Assess program specific risks, including fraud |
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5. Determine risk responses and document an antifraud strategy |
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6. Implement specific control activities to prevent and detect fraud |
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7. Establish collaborative relationships with stakeholders and create incentives to help ensure effective implementation of the antifraud strategy |
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8. Conduct risk-based monitoring and evaluate all components of the Fraud Risk Framework |
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9. Evaluate audits, including recovery audits and single audits |
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● Fully met ◐ Partially met ○ Not met
Source: GAO. | GAO-26-107444
aGAO identified leading practices and requirements from key guidance documents that it deemed most relevant for oversight of awards.
bThis program was statutorily repealed. Pub. L. No. 119-21, § 60002, 139 Stat. 72, 154 (July 4, 2025).
Until agencies establish, document, and implement procedures to fully address these requirements and leading practices, the programs will continue to face increased risks of fraud, waste, and abuse.
Why GAO Did This Study
Proactively managing payment integrity risks is especially important for programs on which agencies expect to spend a large amount of funds. The Infrastructure Investment and Jobs Act, Inflation Reduction Act of 2022, and CHIPS and Science Act provided the five agencies in GAO’s review about $227 billion to support their federal programs, including those administering awards of federal financial assistance such as grants.
GAO was asked to review agencies’ oversight of federal awards to prevent fraud, waste, and abuse. This report examines (1) what requirements and leading practices agencies can use to prevent fraud, waste, and abuse of federal awards and (2) the extent to which selected programs had policies and procedures that included these to oversee federal awards to help address financial payment and fraud risks.
GAO identified legal requirements and leading practices based on guidance documents for overseeing federal award programs and preventing fraud, waste, and abuse in federal awards. GAO selected five programs based on funding, among other factors, and evaluated whether agencies established policies and procedures for the five selected programs that included those requirements and leading practices.
Recommendations
GAO is making 12 recommendations to four of the selected agencies to include the identified requirements and leading practices in their policies and procedures. All agencies except Commerce concurred with the recommendations, as discussed in the report.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Commerce | The Secretary of Commerce should ensure that consideration of the use of recovery audits of potential overpayments for the CHIPS for America Fund is documented. (Recommendation 1) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Energy | The Secretary of Energy should ensure that procedures to conduct regular fraud risk assessments that are tailored to H2Hubs are established. (Recommendation 2) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Energy | The Secretary of Energy should ensure that a program-specific risk profile for H2Hubs is documented. (Recommendation 3) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Energy | The Secretary of Energy should ensure that an antifraud strategy for H2Hubs is documented. (Recommendation 4) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Energy | The Secretary of Energy should ensure that procedures to collaborate with stakeholders by sharing information on fraud risks and sharing lessons learned related to fraud control activities for H2Hubs are documented. (Recommendation 5) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Energy | The Secretary of Energy should ensure that procedures to monitor fraud risk management activities for H2Hubs are documented. (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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| Environmental Protection Agency | The Administrator of EPA should ensure that a Senior Management Council to assess and monitor deficiencies in internal control is established. (Recommendation 7) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that HHS's policies documenting how often HHS programs should conduct fraud risk assessments are finalized. (Recommendation 8) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that an agencywide risk profile for HHS is documented. (Recommendation 9) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that a program-specific risk profile for the Health Center Program is documented. (Recommendation 10) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that an antifraud strategy for the Health Center Program is documented. (Recommendation 11) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that procedures to monitor fraud risk management activities for the Health Center Program are documented. (Recommendation 12) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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