Federal Government Reports $186 Billion in Improper Payments for 2025

The U.S. federal government reported approximately $186 billion in improper payments related to welfare and social services for fiscal year 2025, as identified by the Government Accountability Office (GAO). This represents a $24 billion increase compared to the previous year. These overpayments were found across 64 programs managed by 15 federal agencies, with the majority attributed to overpayment errors.

The GAO's findings are part of an ongoing initiative led by Vice President JD Vance to curb fraud in state-managed programs, potentially affecting the distribution of federal funds if unresolved. Medicare, which operates with a budget near $1.1 trillion, had the highest overpayments, totaling $57 billion. Medicaid's discrepancies amounted to $37 billion, while $21 billion was improperly allocated through the Earned Income Tax Credit. Additionally, both the Supplemental Nutrition Assistance Program (SNAP) and the Shuttered Venue Operators Grant Program reported $10 billion each in excess disbursements.

Other programs contributed to a combined $51 billion in improper payments. The GAO, which has tracked this issue since 2003, estimates that improper payments could total around $3 trillion, possibly underreported. The years 2020 to 2023 saw increased improper payments due to rapid introduction and expansion of programs amid the pandemic, enhancing risks of errors and fraud. Kristen Kociolek from GAO's Financial Management and Assurance team highlighted the heightened risk during this period.

The $186 billion figure does not include some vulnerable programs, such as the Department of Health and Human Services' Temporary Assistance for Needy Families (TANF), which had a spend of approximately $16.5 billion in 2025. The GAO has suggested several reforms to Congress and federal agencies to enhance financial oversight, presenting ten recommendations in March 2022. However, by April 2026, only one has been enacted.