US Government Loses $186,000,000,000 to Improper Payments in Just One Year: Report

The federal government lost a whopping $186 billion to improper payments in fiscal year 2025.

The Government Accountability Office says the figure marks an increase of about $24 billion from the prior year and brings the cumulative total lost since the fiscal year 2003 to roughly $3 trillion.

Most of these payments stemmed from overpayments to ineligible recipients.

About 73% occurred in five program areas including Medicare, Medicaid, the Earned Income Tax Credit, SNAP and the Small Business Administration’s Shuttered Venue Operators Grant program.

The increase partly resulted from improved reporting and eligibility redeterminations in Medicaid after COVID-era expansions ended, and from better reporting by agencies.

Still, a number of agencies remain unaccounted for.

“The government-wide estimate doesn’t include some programs that were determined to be susceptible to significant payment errors. For example, the $186 billion estimate doesn’t include potential improper payments made under the Temporary Assistance for Needy Families (TANF). About $16.5 billion was spent under TANF in FY 2025. But the Department of Health and Human Services (HHS) did not report improper payments under TANF as it does with others programs it runs, like Medicare and Medicaid.

Part of the reason is that HHS does not have the authority to require states to report the data it needs to estimate improper payments. But we think it should. And we have asked Congress to consider taking action that would give HHS that authority.”

In total, the GOA looked across some 15 agencies and 64 programs to tally up the improper payments.

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