$162 Billion In Improper Payments

The Alarming Rise of Improper Payments in the U.S. Government: A Call for Accountability and Transparency

The U.S. Government Accountability Office (GAO) recently released its annual report on improper payments made by federal agencies during the fiscal year ending September 30, 2024. The findings are troubling, revealing that improper payments totaling $162 billion were identified across 16 agencies and 68 different programs. This staggering figure represents a significant increase from previous years and highlights a systemic issue of wasteful spending within the federal government. Out of this $162 billion, approximately 84%—or $135 billion—were attributed to overpayments, underscoring the inefficiencies and oversight gaps in government programs. Since the GAO began tracking improper payments in Fiscal Year (FY) 2003, the cumulative total has reached an astonishing $2.8 trillion, a figure that likely underestimates the true extent of the problem.

The Bigger Picture: The True Scope of Improper Payments

The $162 billion reported for FY 2024 is only the tip of the iceberg. The GAO explicitly states that its estimates “do not represent the full extent of government-wide improper payments.” This is because certain programs identified as highly susceptible to improper payments were excluded from the report. For instance, the Department of Health and Human Services’ (HHS) Temporary Assistance for Needy Families (TANF) program, the Department of Housing and Urban Development’s (HUD) Tenant-Based Rental Assistance program, and the Small Business Administration’s (SBA) Shuttered Venue Operators Grant program were not included in the calculations. The exclusion of these programs is particularly concerning, as they are known to be at high risk for improper payments. HHS, for example, has struggled to obtain the necessary data to estimate improper payments for TANF due to a lack of authority to require states to report relevant information. Despite a 2022 GAO recommendation urging Congress to grant HHS this authority, no action has been taken as of January 2025. This lack of transparency and accountability perpetuates the problem, allowing improper payments to go undetected and unaddressed.

The Largest Sources of Improper Payments: A Closer Look

The GAO report identifies Medicare and Medicaid as the largest sources of improper payments, collectively accounting for $85.4 billion in FY 2024. Medicare, which includes Parts A, B, C, and D, had improper payments totaling $54.3 billion, while Medicaid accounted for $31.1 billion. These programs, which are critical to providing healthcare to millions of Americans, are clearly in need of stronger oversight and more effective management to prevent such losses. Another notable contributor to improper payments is the Supplemental Nutritional Assistance Program (SNAP), which reported over $10 billion in improper payments for the year. These figures highlight the vulnerability of large, complex federal programs to waste, fraud, and abuse. The sheer scale of these improper payments raises serious questions about the efficiency and integrity of government spending.

Historical Context: A Decades-Long Problem

Improper payments have been a persistent issue for the federal government for decades. In FY 2003, the first year the GAO began tracking these payments, the total was $35 billion. If improper payments had grown at the rate of inflation since then, the FY 2024 estimate would have been approximately $59.5 billion. Instead, the actual figure reached $161.5 billion, representing an annual growth rate of 7.55%—far exceeding the rate of inflation. This sharp increase suggests that improper payments are not only a recurring problem but one that is worsening over time. While there was a notable decrease in improper payments from FY 2023 to FY 2024—dropping from $235.8 billion to $161.5 billion—the overall trend remains alarming. The highest improper payment estimates in recent years were reported in FY 2021 ($281.4 billion), FY 2022 ($247.0 billion), and FY 2023 ($235.8 billion), indicating that the problem reached unprecedented levels during the COVID-19 pandemic.

The Need for Oversight and Reform: A Call to Action

The GAO report underscores the urgent need for improved oversight and accountability within federal agencies. Specifically, the report notes that the federal government is unable to determine the full extent of improper payments or ensure that agencies are taking appropriate steps to address the issue. This lack of transparency and accountability has allowed improper payments to persist and grow unchecked for decades. The implementation of the Death of Government Efficiency (DOGE) initiative, supported by the Trump administration, marks a potential turning point in addressing this issue. DOGE aims to restore transparency and fiscal responsibility to federal spending, ensuring that taxpayer dollars are used wisely and effectively. However, the success of this initiative will depend on its execution and the willingness of Congress and federal agencies to take meaningful action. As the report highlights, the issue is not about whether improper payments should be addressed—there is broad consensus on the need for reform. Rather, the debate centers on how best to implement reforms that will bring about lasting change.

Conclusion: Restoring Transparency and Fiscal Responsibility

The sheer scale of improper payments—totaling $2.8 trillion since FY 2003—should be a wake-up call for policymakers and the American public. These payments represent not just a financial loss but a betrayal of the public trust. As stewards of taxpayer dollars, federal agencies have a responsibility to ensure that funds are used efficiently and effectively. The GAO report serves as a stark reminder of the need for greater transparency, accountability, and oversight in government spending. By addressing the systemic issues that contribute to improper payments, policymakers can restore fiscal integrity and ensure that government programs operate with the efficiency and honesty that taxpayers deserve. The debate over the execution of DOGE initiatives is just the beginning of a broader conversation about how to reclaim transparency and accountability in Washington. No American should disagree with the goal of rooting out waste and corruption in government—except, perhaps, those who stand to benefit from the status quo.