The federal government has made an estimated $3 trillion in improper payments since 2003 — and a new government watchdog report suggests Washington is no closer to getting the problem under control.
In fiscal year 2025 alone, federal agencies made at least $186 billion in bad payments, a $24 billion jump from the prior year, according to the Government Accountability Office. The figure likely understates the true damage: several programs known to be fraud-prone were excluded from the tally altogether.
Medicare and Medicaid led all programs with a combined $94 billion in erroneous payouts. The GAO attributed the Medicaid spike to eligibility errors during the phase-out of COVID-era rules.
The bad payments spanned 15 agencies and 64 programs. Nineteen programs reported error rates of at least 10%, and six exceeded 25%.
Perhaps most alarming, the GAO said the federal government cannot “reasonably assure that it takes appropriate actions to reduce” improper payments — an admission that systemic reform remains elusive.
“Concerning to see the amounts of improper payments starting to increase again,” said Kristen Kociolek, managing director of GAO’s Financial Management and Assurance team, adding that stronger controls and reliable data are needed.
The GAO has made numerous recommendations to Congress, nine of 10 of which remain unaddressed.
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• The federal government made at least $186 billion in improper payments in a single year
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