Improper Payments Cost the Government Billions
Improper payments made by the federal government totaled $236 billion in Fiscal Year (FY) 2023, according to testimony from the Government Accountability Office (GAO)’s Chief Operating Officer Orice Williams Brown. Improper payments – payments that should not have been made or were made incorrectly – have totaled $2.7 trillion over the past twenty years.
The amount of improper payments spiked at $281 billion in 2021 due to trillions in federal spending during the pandemic that enhanced or established new federal programs. While improper payments decreased in 2022 and 2023, they are still nearly seven times higher than the $35 billion recorded in FY 2003.
Just six federal program areas are responsible for 85 percent of the $236 billion in improper payments, including Medicare, Medicaid, Unemployment Insurance, the Paycheck Protection Program, the Earned Income Tax Credit, and Supplemental Security Income. While not all $236 billion of improper payments constitute waste – some are underpayments or were incorrect for technical reasons – over $175 billion were overpayments. Even though that figure includes the entire amount of the improper overpayments, not just the overage, it nonetheless demonstrates that significant savings could be realized by improving government payment systems.
GAO has recommended that Congress take actions to enhance oversight and accountability of federal agencies such as new reporting, fraud analytics, data sharing, and improved internal control plans.
