$236 Billion in Improper Federal Payments in 2023, GAO Says

The Government Accountability Office report, released Tuesday, shows that federal agencies made $236 billion in errors last year. Improper payments can be defined as payments that were either made incorrectly or should never have been made. The GAO report is an underestimation of the true amount, since not all agencies reported improper payments.

Over the years, improper payments have increased. In 2003, there were 35 billion dollars in improper payments. In 2009, the number first surpassed $100 billion. From 2017 to 2021 it increased every year, from $141 billion up to $281 billion. Although it has decreased in the last two years, the amount is still much higher than before the Covid Pandemic.

The GAO divides improper payments into four different categories: underpayments (overpayments), technically improper payments (technically improper payments), and unknown payments. If mistakes were random, then we should expect roughly the same number of underpayments and overpayments. GAO determined that 74 percent were improper payments in the past year. Only 5 percent of improper payments were underpayments. 19% were not sure, while 2 percent were technical.

In 2023, four-fifths (45%) of all improper payments came from five government programs. These were Medicare, Medicaid and expanded federal unemployment insurance. Also included in the list was the Earned Income Tax Credit, Paycheck Protection Program, and Medicaid. The GAO reported that, between April 2020 and may 2023, about one-seventh (or $700) of the expanded federal unemployment insurance was fraudulent. Last year, the inspector general of the Department of Labor found that 22 per cent of federal unemployment payments made during pandemic years were improper.

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16 federal programs reported rates of improper payments at or above 10 percent. Paycheck Protection Program had the highest rate of improper payments, with 49.1 and 40.5% respectively. The Farm Service Agency’s disaster assistance program was next at 40.4%, while 33.5% of payments related to earned-income tax credits were incorrect. The 16 programs also include the Department of Veterans Affairs and Department of Health and Human Services.

Four of the eight programs identified by GAO that reduced improper payments were no longer in existence or had been terminated. Medicaid and three Department of Education programs also reduced improper payments by implementing better program controls.

In 2023, the Department of Justice budget will be $37 billion. The Department of State budget was $58 billion. Last year, the federal government made improper payments that were multiple times larger than the budgets of cabinet departments responsible for law enforcement and diplomacy.