The U.S. federal government made $186 billion in improper payments during fiscal year 2025, according to a new report from the nonpartisan Government Accountability Office (GAO) [1]. This figure represents a $24 billion increase from the previous fiscal year, a rise attributed largely to programs that did not report in fiscal year 2024 but provided estimates in the latest year [1]. Overpayments accounted for approximately $153 billion, or about 82% of the total improper payments [1].
The GAO's analysis covered 64 federal programs across 15 agencies, with 73% of the improper payments concentrated in five major program areas: Medicare, Medicaid, the Earned Income Tax Credit (EITC), the Supplemental Nutrition Assistance Program (SNAP), and the Shuttered Venue Operators Grant Program [1]. Specifically, three Medicare programs were responsible for $57 billion in improper payments, Medicaid for $37 billion, the EITC for $21 billion, and both SNAP and the Shuttered Venue Operators Grant Program for $10 billion each [1].
The report highlighted that 19 programs reported improper payment rates exceeding 10%, and six programs had rates above 25% [1]. However, the GAO noted that its estimate is not comprehensive, as some agencies and programs did not provide data. For example, improper payments under the Temporary Assistance for Needy Families (TANF) program were not included in the $186 billion total [1].
GAO Acting Comptroller General Orice W. Brown emphasized the need for urgent action, stating, "Federal agencies must do more to protect taxpayer dollars from the errors that drive improper payments" and called for stronger controls, better data, and robust congressional oversight [1]. The GAO has made several recommendations to reduce payment errors, including designating all new federal programs with over $100 million in annual payments as susceptible to improper payments and requiring agencies to develop internal control plans for emergency funding situations [1].
CONCLUSION
The GAO's report underscores a significant and growing challenge in federal financial management, with improper payments reaching $186 billion in fiscal year 2025. The findings highlight the need for enhanced oversight, transparency, and internal controls to safeguard taxpayer funds. Without comprehensive action, the risk of further increases in improper payments remains substantial.