The federal government's financial missteps resulted in a staggering loss of $186 billion due to improper payments during the fiscal year 2025. This shocking figure, reported by the Government Accountability Office (GAO), reflects an increase of approximately $24 billion over the previous year. Cumulatively, these losses have now reached around $3 trillion since the fiscal year 2003.
A significant portion of these improper payments has come from overpayments made to individuals who were not eligible for assistance. Specifically, 73% of these errors occurred in five key program areas, including Medicare, Medicaid, the Earned Income Tax Credit, SNAP, and the Small Business Administration’s Shuttered Venue Operators Grant program.
Reasons Behind the Increase
Part of the rise in reported losses can be attributed to better practices in reporting and eligibility evaluations in Medicaid as the enhancements made during the COVID-19 pandemic came to an end. Additionally, some agencies are showing improved transparency in their reporting processes. However, the GAO highlighted that several agencies are still not fully accounted for in these reports.
Programs Not Fully Accounted
It's crucial to note that the government-wide estimate does not cover certain programs deemed vulnerable to significant payment errors. For instance, the $186 billion loss does not include potential discrepancies associated with the Temporary Assistance for Needy Families (TANF) program, which accounted for about $16.5 billion in spending in FY 2025. The Department of Health and Human Services (HHS) has not reported TANF's improper payments in the same detail as other programs like Medicare and Medicaid.
The absence of accurate reporting stems from the lack of authority HHS has to mandate states to provide the necessary data for assessing improper payments. Advocacy groups urge Congress to take action to end this gap.
In total, the GAO assessed approximately 15 agencies and 64 programs to compile the improper payments losses, highlighting an ongoing challenge for federal financial oversight and accountability.
