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                BlogSearch < WatchBlog: Following the Federal Dollar
    Federal Government Made $236 billion “Improper Payments” Last Fiscal Year Posted on March 26, 2024
                    The federal government reported an estimated $236 billion in “improper payments” during the most recently completed fiscal year (FY 2023). Such payments are essentially payment errors that can be the result of many things—include overpayments, inaccurate recordkeeping, or even fraud.Payment errors are a long-standing issue for the federal government. Over the last 20 fiscal years, it has made an estimated $2.7 trillion in such improper payments.What’s causing these errors and what can be done to prevent them? Today’s WatchBlog post looks at ournew report, issued today.**What were the payment errors in FY 2023?**The $236 billion in improper payments were reported by 14 agencies across 71 programs.More than $175 billion (74%) of errors were overpayments—for example, payments to deceased individuals or those no longer eligible for government programs$11.5 billion were underpayments$44.6 billion were unknown payments—meaning it is unclear whether a payment was an error or not$4.6 billion were cases where a recipient was entitled to a payment, but the payment failed to follow proper statutes or regulationsSome good news: payment errors have declined since last fiscal year by about $11 billion. Eight program areas saw substantial declines in improper payments this past year. For example, payment errors under Medicaid dropped by $30 billion from the previous year. Program areas that reported substantial declines in payment errors said the decreases were due to mitigation strategies that they had implemented, among other things.But there was also some bad news: Five programs saw substantial increases in payment errors. For example, the Department of Labor’s Pandemic Unemployment Insurance program saw an increase of $44 billion in errors.Overall, while improper payments were down from last year, they remain higher than pre-pandemic times.**Reported Estimates of Government-wide Improper Payments Since FY 2003**Image
              A bar chart showing the estimated government-wide improper payments amounts each fiscal year from 2003 to 2023.  The amount goes up steadily until COVID and then declines starting in FY 2022**Which programs had the most payment errors?**About $186 billion (79%) of such errors were concentrated in five program areas: Medicare, Medicaid, Pandemic Unemployment Assistance, the Earned Income Tax Credit, and Paycheck Protection Program Loan forgiveness.Some of these program areas have consistently been among those with the****highest payment errors—including Medicaid, Medicare, and the Earned Income Tax Credit. These are also federal program areas that issue the most payments to individuals and, as a result, maybe more vulnerable to these sorts of errors.Image
              Pie chart showing where improper payments were made --Medicare, Medicaid, the Paycheck Protection Program, and federal Pandemic Unemployment comprised about 20% each. All other programs were under 20% total.In our prior work, we’ve made recommendations to help reduce such errors. Many of these recommendations still require action from agency leaders.For example:**Medicare**could improve communication around itsprior authorization program. This program requires that beneficiaries get approval before receiving certain items like powered wheelchairs—and it could reduce expenses and improper payments.**Medicaid**could improve oversight to ensure that claims aren’t paid toineligible medical providers, including those who have suspended or revoked medical licenses.**Earned Income Tax Credit**—The Internal Revenue Service could take steps to review more W-2s before issuing tax refunds toreduce the risk of tax refund fraud.**How can we reduce payment errors across the federal government?**Some of our recommendations to reduce improper payments under specific programs are discussed above, but there are more. GAO has made numerous recommendations to agencies and provided suggestions to Congress on ways to help reduce them. Our recommendations for federal agencies include those that would call for better monitoring of federal programs and planning that would help identify risks. ForCongress, we think agencies could use help identifying susceptible programs, developing reliable methods for estimating errors, and implementing effective corrective action.Learn more about our work on federal payment errors by checking outour latest reporton improper payments.GAO’s fact-based, nonpartisan information helps Congress and federal agencies improve government. The WatchBlog lets us contextualize GAO’s work a little more for the public. Check out more of our posts atGAO.gov/blog.
TopicsGovernment Operations
                        Centers for Medicare & Medicaid Services
              Small Business Administration
              Internal Revenue Service
              Department of Labor
              Department of the Treasury
                        Improper payments
              Payment errors
              Fraud
                        Financial Management and Assurance
GAO Contacts
    
      Hannah Padilla
      
              Hannah Padilla
            
            Director
      
            padillah@gao.gov
      
            (202) 512-5683
		
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Related Products
					Improper Payments: Information on Agencies' Fiscal Year 2023 EstimatesProduct Number
              GAO-24-106927

	Published:  Mar 26, 2024


	Publicly Released: Mar 26, 2024
About WatchblogGAO's mission is to provide Congress with fact-based, nonpartisan information that can help improve federal government performance and ensure accountability for the benefit of the American people. GAO launched its WatchBlog in January, 2014, as part of its continuing effort to reach its audiences—Congress and the American people—where they are currently looking for information.

The blog format allows GAO to provide a little more context about its work than it can offer on its other social media platforms. Posts will tie GAO work to current events and the news; show how GAO’s work is affecting agencies or legislation; highlight reports, testimonies, and issue areas where GAO does work; and provide information about GAO itself, among other things.

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