GAO Report: Payment Integrity: Significant Improvements Are Needed to Address Improper Payments and Fraud

Why GAO Did This Study

Reducing improper payments—payments that should not have been made or that were made in an incorrect amount—and fraud—obtaining something of value through willful misrepresentation—is critical to safeguarding federal funds and could help achieve cost savings and improve the government’s fiscal position. These payment integrity issues also erode public trust in government and hinder agencies’ efforts to execute their missions and program objectives effectively and efficiently.

This testimony covers (1) estimates of government-wide improper payments and fraud; (2) the status of improper payments in six high-priority programs, as well as relevant GAO recommendations that have not been fully implemented related to improper payments and fraud within these programs; and (3) actions Congress could take to improve oversight of efforts to reduce improper payments and fraud.

This testimony is primarily based on GAO’s recent work on improper payments and fraud. GAO reviewed additional information to determine the improper payment amounts, rates, and root causes for six program areas that represent about 85 percent of all reported improper payment estimates in fiscal year 2023. In addition, GAO analyzed agency financial reports and reviewed the fiscal year 2023 Payment Integrity Information Act of 2019 compliance reports that each agency’s IG issued. More detailed information on the scope and methodology of GAO’s prior work can be found within each specific report.

What GAO Found

Improper payments and fraud are long-standing and significant problems in the federal government. Since fiscal year 2003, cumulative improper payment estimates by executive branch agencies have totaled about $2.7 trillion. In fiscal year 2023 alone, federal agencies estimated $236 billion in improper payments, representing 71 programs, a small subset of all federal programs. While the fiscal year 2023 estimate is a decrease of about $11 billion from the prior year, this was largely due to Medicaid reducing eligibility requirements for beneficiaries and providers during the COVID-19 public health emergency.

Six program areas were responsible for approximately $200 billion of the $236 billion fiscal year 2023 improper payments estimate:

1. Department of Health and Human Services’ (HHS) Medicare;
2. HHS’s Medicaid;
3. Department of Labor’s Unemployment Insurance;
4. Small Business Administration’s Paycheck Protection Program;
5. Department of the Treasury’s Earned Income Tax Credit; and
6. Social Security Administration’s Supplemental Security Income.

Each of the six selected program areas are currently or have been on GAO’s High Risk List of areas with vulnerabilities to fraud, waste, abuse, and mismanagement or in need of transformation. Agencies have made progress in implementing GAO’s recommendations for the six program areas, but the agencies can do more to improve payment integrity and address the remaining 14 unimplemented recommendations.

In addition to GAO’s work, in fiscal year 2022, the inspectors general (IG) from 10 of the 24 Chief Financial Officers Act agencies found that their agencies did not fully comply with improper payments criteria as established by federal law and related Office of Management and Budget (OMB) guidance. The IGs of the 10 agencies that were not in compliance made at least 30 recommendations to their agencies from these compliance reports that remained open as of May 2024…

Access the report here.

🔊 Listen to Story