Federal agencies made at least $186 billion in improper payments during fiscal year 2025, according to a new report from the Government Accountability Office. The figure surpasses the prior year’s total by $24 billion and represents only a fraction of what government auditors believe was actually lost.
The $186 billion estimate excludes several programs the GAO considers highly susceptible to waste, meaning the real toll on taxpayers is almost certainly higher.
Roughly 82% of the erroneous payments were overpayments — money sent out in amounts larger than recipients were owed, or payments made to people who weren’t eligible at all. The bad payments came from 15 federal agencies across 64 programs.
Nearly three-quarters of the total was concentrated in just five programs. Medicare and Medicaid, both administered by the Department of Health and Human Services, together accounted for $94 billion in improper payments — more than any other programs in the federal government. The report attributed the surge in Medicaid errors to eligibility mistakes and provider-screening failures as agencies wound down COVID-era policy flexibilities.
The Department of the Treasury’s Earned Income Tax Credit, the Department of Agriculture’s Supplemental Nutrition Assistance Program, and the Small Business Administration’s Shuttered Venue Operators Grant rounded out the top five.
Nineteen programs reported improper payment rates of at least 10%. Six of those exceeded 25%.
And still, the $186 billion figure does not capture the full picture. HHS’s Temporary Assistance for Needy Families program, which distributed roughly $16.5 billion in the 2025 fiscal year, was not included in the estimate at all. Neither were several other programs that auditors flagged as likely sources of significant waste.
The cumulative tab since fiscal year 2003: $3 trillion.
The GAO has issued 10 recommendations to Congress aimed at reducing improper payments. Nine of them remain open. Among the suggestions still unaddressed: requiring all new federal programs disbursing more than $100 million annually to assess their vulnerability to improper payments, and establishing a permanent data analytics center to detect fraud before money goes out the door.
The agency’s bottom line was blunt. The federal government cannot determine the full magnitude of its improper payments, the report concluded, and cannot “reasonably assure that it takes appropriate actions to reduce them.”
