GAO, Improper Payments: Information on Agencies' Fiscal Year 2024 Estimates (GAO-25-107753) (2025-03)
Summary
GAO-25-107753, a GAO Q&A report titled Improper Payments: Information on Agencies' Fiscal Year 2024 Estimates, addressed to the Subcommittee on Legislative Branch, Committee on Appropriations, House of Representatives, and dated March 11, 2025. The report states that federal agencies' fiscal year 2024 estimates totaled about $162 billion in improper payments, a decrease of about $74 billion from the prior fiscal year, and that about $135 billion of the estimates represent overpayments. It reports that about 75 percent ($121 billion) of the total is concentrated in five program areas, including Medicare, Medicaid, the Earned Income Tax Credit and SBA's Restaurant Revitalization Fund ($9 billion).
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U.S. Government Accountability Office
Improper Payments: Information on Agencies’
Fiscal Year 2024 Estimates
GAO-25-107753
Q&A Report to the Subcommittee on Legislative Branch, Committee on Appropriations, House of
Representatives
March 11, 2025
Why This Matters Improper payments—those that should not have been made or were made in the
incorrect amount—have consistently been a government-wide issue. Since fiscal
year 2003, cumulative improper payment estimates by executive branch
agencies have totaled about $2.8 trillion, and the actual amount of improper
payments may be significantly higher. Reducing improper payments is critical to
safeguarding federal funds.
The Payment Integrity Information Act of 2019 (PIIA) requires agencies to
manage improper payments by identifying risks, taking corrective actions, and
estimating and reporting on improper payments in programs they administer.
PIIA also requires each agency’s inspector general (IG) to issue an annual report
on compliance with applicable PIIA criteria. We have reported on improper
payments in our audit reports on the U.S. government’s consolidated financial
statements since fiscal year 1997, and we have found that these payments
represent a material deficiency or weakness in internal controls. Specifically, we
have noted that the federal government is unable to determine the full extent of
its improper payments or to reasonably assure that it takes appropriate actions to
reduce them.
House Report 117-389, which accompanied the Legislative Branch
Appropriations Act, 2023, includes a provision for GAO to provide quarterly
reports on improper payments. This is our ninth such report, and it provides an
overview of federal agencies’ improper payment estimates for fiscal year 2024.
Additionally, we discuss agencies’ compliance with requirements for reporting
and managing improper payments in fiscal year 2023.
Key Takeaways • In fiscal year 2024, federal agencies’ estimates totaled about $162 billion in
improper payments, a decrease of about $74 billion from the prior fiscal year.
The reduction in estimated improper payments is largely attributable to the
termination or winding down of certain COVID-19 programs. About $135
billion (approximately 84 percent) of the estimates represent overpayments.
• The improper payment estimates do not represent the full extent of
government-wide improper payments. The total of fiscal year 2024 improper
payment estimates represent a small subset of all federal programs. For
example, some programs that agencies have determined are susceptible to
significant improper payments, such as the Department of Health and Human
Services’ (HHS) Temporary Assistance for Needy Families (TANF), do not
estimate improper payments. In addition, IGs have reported that agencies'
improper payment estimates are unreliable for some programs.
Page 1 GAO-25-107753 Improper Payments
• In fiscal year 2023, 13 of the 24 agencies that the Chief Financial Officers Act
of 1990 (CFO Act) covers fully complied with applicable improper payment
criteria, as reported by their agency IGs.
What are federal Agencies reported about $162 billion in improper payment estimates for fiscal
agencies’ estimates for year 2024. 1 This amount represents a decrease of about $74 billion from the
fiscal year 2024 fiscal year 2023 total (see fig. 1). 2
improper payments?
Figure 1: Total Reported Executive Agency Improper Payment Estimates, Fiscal Years 2003–
2024
Note: Prior year improper payment estimates have not been adjusted for inflation.
Our analysis of agency data shows that 16 agencies reported improper payment
estimates across 68 programs, representing a small subset of all federal
programs. As shown in figure 2, about 75 percent ($121 billion) of the
government-wide total of estimated improper payments that agencies reported
for fiscal year 2024 is concentrated in five program areas:
• HHS’s Medicare, comprising three programs ($54 billion); 3
• HHS’s Medicaid ($31 billion); 4
• the Department of the Treasury’s Earned Income Tax Credit ($16 billion);
• the Department of Agriculture’s (USDA) Supplemental Nutrition Assistance
Program ($11 billion); and
• the Small Business Administration’s (SBA) Restaurant Revitalization Fund
($9 billion).
Page 2 GAO-25-107753 Improper Payments
Figure 2: Programs Reporting the Largest Percentage of Government-Wide Improper
Payments Estimates for Fiscal Year 2024
Note: Improper payment estimates displayed in the figure include both improper and unknown payments.
Executive agency estimates of improper payments treat as improper any payments whose propriety cannot be
determined due to lacking or insufficient documentation.
As shown in figure 3, most of the total $162 billion in government-wide improper
payment estimates for fiscal year 2024 consisted of overpayments. The
remaining improper payments consisted of underpayments, unknown payments,
and technically improper payments. 5
Figure 3: Agencies’ Fiscal Year 2024 Reported Estimated Improper Payments by Type
Note: Percentages in the figure do not sum to 100 percent due to rounding.
The fiscal year 2024 improper payment estimates do not include certain
programs that agencies have determined are susceptible to significant improper
payments. As a result, the total reported estimates potentially do not represent
the full extent of government-wide improper payments. For example, the $162
billion total does not include estimates of improper payments made under HHS’s
Page 3 GAO-25-107753 Improper Payments
TANF program. HHS reported that it does not have the authority to obtain the
information it needs to estimate or report improper payment amounts for this
program. In April 2022, we recommended that Congress consider providing HHS
the authority to require states to report the data the agency needs to estimate
and report on improper payments for TANF. 6 As of January 2025, Congress had
not yet acted on this recommendation. In addition, various other programs did not
report improper payment estimates for fiscal year 2024, such as the Department
of Housing and Urban Development (HUD) Office of Public and Indian Housing’s
Tenant-Based Rental Assistance and the SBA’s Shuttered Venue Operators
Grant program.
GAO has made numerous recommendations to Congress and agencies to help
reduce improper payments government-wide. In March 2022, GAO
recommended 10 matters for congressional consideration to enhance
transparency and accountability of federal spending. These matters included
designating all new federal programs making more than $100 million in payments
in any one fiscal year as susceptible to improper payments and establishing a
permanent data analytics center of excellence to aid the oversight community in
identifying improper payments and fraud. 7 As of January 2025, these matters
remain open.
How many programs For fiscal year 2024, eight federal programs reported improper payment
reported improper estimates of $5 billion or more (see table 1). 8
payment amounts of at
least $5 billion?
Page 4 GAO-25-107753 Improper Payments
Table 1: Federal Programs Reporting Annual Estimated Improper Payment Amounts of at
Least $5 Billion for Fiscal Year 2024
Estimated
improper
Agency Program name payment amount
(dollars in
billions)
Department of Health and
Medicare Fee-for-Service $32
Human Services
Department of Health and
Medicaid 31
Human Services
Department of Health and
Medicare Advantage (Part C) 19
Human Services
Department of the
Earned Income Tax Credit 16
Treasury
Department of Agriculture Supplemental Nutrition Assistance Program 11
Small Business
Restaurant Revitalization Fund 9
Administration
Social Security
Supplemental Security Income 6
Administration
Department of Labor Federal State Unemployment Insurance 6
Source: GAO analysis of Office of Management and Budget PaymentAccuracy.gov data. | GAO-25-107753
Note: Improper payment estimates displayed in the table include both improper and unknown payments.
Executive agency estimates of improper payments treat as improper any payments whose propriety cannot be
determined due to lacking or insufficient documentation.
How many programs For fiscal year 2024, 18 federal programs reported improper payment rate
reported improper estimates of at least 10 percent, including six programs whose rates exceeded
payment rates of at 25 percent (see table 2). 9
least 10 percent?
Page 5 GAO-25-107753 Improper Payments
Table 2: Federal Programs Reporting Annual Estimated Improper Payment Rates Greater
Than 10 Percent for Fiscal Year 2024
Estimated
Agency Program name improper payment
rate (percent)
Department of
Emergency Conservation Program – Disasters 45.2
Agriculture
Small Business
Restaurant Revitalization Fund 30.3
Administration
Department of the
Refundable Premium Assistance Tax Credit 28.5
Treasury
Department of the
American Opportunity Tax Credit 27.7
Treasury
Department of the
Earned Income Tax Credit 27.3
Treasury
Small Business
Paycheck Protection Program (PPP) Loan Forgiveness 25.2
Administration
Small Business
PPP Loan Guaranty Purchases 24.7
Administration
Corporation for
National and The Foster Grandparent Program 17.6
Community Service
Department of Labor Federal State Unemployment Insurance 15.9
Department of
Pension 13.9
Veterans Affairs
Department of
Purchased Long Term Services and Supports 13.5
Veterans Affairs
Department of
Livestock Forage Disaster Program 12.9
Agriculture
Department of
Agriculture Risk Coverage and Price Loss Coverage 12.8
Agriculture
Department of
Health and Human Head Start 12.0
Services
Department of
Supplemental Nutrition Assistance Program 11.7
Agriculture
Department of
Noninsured Crop Disaster Assistance Program 11.6
Agriculture
Department of the
Additional Child Tax Credit 10.7
Treasury
Social Security
Supplemental Security Income 10.6
Administration
Source: GAO analysis of Office of Management and Budget PaymentAccuracy.gov data. | GAO-25-107753
Note: Improper payment rates displayed in the table include both improper and unknown payments. Executive
agency estimates of improper payments treat as improper any payments whose propriety cannot be determined
due to lacking or insufficient documentation. The estimated improper payment rate is the estimated amount in
improper payments divided by the amount in program outlays for a given program in a given fiscal year.
How many programs Our analysis of PaymentAccuracy.gov data found that eight programs
reported substantial experienced substantial declines in reported estimated improper payments for
declines in improper fiscal year 2024 compared to the prior year (see table 3). 10 Agencies attributed
payments? these declines to factors such as terminating or winding down certain programs.
These include programs specific to the COVID-19 pandemic and programs for
which agencies had temporary review flexibilities during the public health
emergency (e.g., Medicaid). In addition, variability arising from the improper
Page 6 GAO-25-107753 Improper Payments
payment estimation process could potentially explain a portion of the reported
declines.
Table 3: Federal Programs with Substantial Declines in Estimated Improper Payments from
Fiscal Year 2023 to Fiscal Year 2024
Estimated Decrease
Decrease
fiscal year in rate
in amount
2024 from fiscal
from fiscal Reason for decrease from
Agency/program improper year 2023
year 2023 agency financial report
payments (net
(dollars in
(dollars in percentage
billions)
billions) points)
Department of $0 $44 35.9 Termination of program.
Labor – Federal
Pandemic
Unemployment
Assistance
Department of 31 19 3.5 Improved state compliance and
Health and Human COVID-19 review flexibilities.a
Services –
Medicaid
Small Business 0.4 18 15.3 Winding down of program.
Administration –
Paycheck
Protection
Program Loan
Forgiveness
Department of the 16 6 6.2 Agency focus on outreach and
Treasury – Earned education around refundable tax
Income Tax Credit credits.
Social Security 4 4 0.4 No reason provided.
Administration –
Old-Age,
Survivors, and
Disability
Insurance
Small Business 0 3 8.1 Winding down of program.
Administration –
COVID-Economic
Injury Disaster
Loan
Small Business 2 2 24.4 Winding down of program.
Administration –
Paycheck
Protection
Program Loan
Guaranty
Purchases
Department of 1 1 6.7 Improved state compliance and
Health and Human COVID-19 review flexibilities.a
Services –
Children’s Health
Insurance
Program
Source: GAO analysis of Office of Management and Budget PaymentAccuracy.gov data and agency financial reports. | GAO-25-107753
Note: Improper payment estimates and rates displayed in the table include both improper and unknown
payments. Executive agency estimates of improper payments treat as improper any payments whose propriety
cannot be determined due to lacking or insufficient documentation. The estimated improper payment rate is the
estimated amount in improper payments divided by the amount in program outlays for a given program in a
given fiscal year.
a
The Department of Health and Human Services (HHS) attributes the decline in fiscal year 2024 in part to
flexibilities granted to states during the COVID-19 public health emergency. For example, states were required
to keep people continuously enrolled in Medicaid regardless of whether their eligibility status changed. Thus,
Page 7 GAO-25-107753 Improper Payments
according to HHS, payments that would have previously been determined to be improper would not be improper
under the relaxed requirements.
How many programs According to the PaymentAccuracy.gov data that we analyzed, four programs
reported substantial experienced substantial increases in reported estimated improper payments for
increases in improper fiscal year 2024 (see table 4). For two of these programs, the increases were
payments? because the agencies did not report improper payments estimates for the prior
fiscal year. In addition, variability arising from the improper payment estimation
process could potentially explain a portion of the reported increases.
Table 4: Federal Programs with Substantial Increases in Estimated Improper Payments from
Fiscal Year 2023 to Fiscal Year 2024
Estimated
Increase in
fiscal year Increase in
rate from
2024 amount from Reason for increase
fiscal year
Agency/program improper fiscal year from agency financial
2023 (net
payments 2023 (dollars report
percentage
(dollars in in billions)
points)
billions)
Small Business $9 $9 30.3 First time reporting in
Administration – fiscal year 2024.
Restaurant
Revitalization Fund
Department of the 3 3 (3.7) a From fiscal year 2023 to
Treasury – Additional 2024, reported claims
Child Tax Credit increased significantly,
from about $4 billion to
about $32 billion.
Department of 2 2 3.9 Program did not report
Homeland Security – improper payments in
Validate As You Go fiscal year 2023;
(VAYGo) resumed reporting of
improper payments in
fiscal year 2024.
Social Security 6 1 1.4 No reason provided.
Administration –
Supplemental
Security Income
Source: GAO analysis of Office of Management and Budget PaymentAccuracy.gov data and agency financial reports. | GAO-25-107753
Note: Improper payment estimates and rates displayed in the table include both improper and unknown
payments. Executive agency estimates of improper payments treat as improper any payments whose propriety
cannot be determined due to lacking or insufficient documentation. The estimated improper payment rate is the
estimated amount in improper payments divided by the amount in program outlays for a given program in a
given fiscal year.
a
Agency reported an increase in the estimated improper payment amount because of an increase in outlays,
despite the decrease in the improper payment rate.
What are the PIIA requires executive branch agencies to, among other things, (1) review all
requirements for programs and activities and identify those that may be susceptible to significant
agencies’ management improper payments (commonly referred to as conducting a risk assessment), (2)
of improper payments? publish improper payment estimates for those programs and activities, (3)
implement corrective actions to reduce improper payments and set reduction
targets, and (4) report on the results of addressing the foregoing requirements. 11
In addition, PIIA requires the IG at each executive branch agency to issue an
annual report on the agency’s compliance with applicable PIIA criteria. 12
The Office of Management and Budget (OMB) plays a key role in developing
guidance for executive branch agencies on estimating and reporting on improper
payments. OMB Circular No. A-123, appendix C, includes guidance for IGs on
how to determine agency compliance with applicable PIIA criteria. 13 It also
Page 8 GAO-25-107753 Improper Payments
includes guidance for executive branch agencies on the corrective actions that
PIIA requires them to take if IGs find them noncompliant.
As shown in figure 4, PIIA and OMB M-21-19 include criteria for determining
compliance.
Figure 4: Executive Agency Compliance Criteria and Requirements as Outlined Under the
Payment Integrity Information Act of 2019 and Federal Guidance
Specifically, OMB instructs IGs to report on whether their agencies
1a. publish payment integrity information with their annual financial statements,
1b. post their annual financial statements and accompanying materials on their
websites,
2a. conduct improper payment risk assessments for each program with annual
outlays greater than $10 million at least once in the last 3 fiscal years,
2b. adequately conclude whether each program is likely to make improper
payments and unknown payments above or below the statutory threshold (either
$100 million or both 1.5 percent of program outlays and $10 million),
3. publish improper payment and unknown payment estimates for programs
susceptible to significant improper payments and unknown payments in the
accompanying materials to the annual financial statements,
4. publish corrective action plans for each program for which an estimate above
the statutory threshold was published in the accompanying materials to the
annual financial statements,
Page 9 GAO-25-107753 Improper Payments
5a. publish an improper payment and unknown payment reduction target for
each program for which an estimate above the statutory threshold was published
in the accompanying materials to the annual financial statements,
5b. demonstrate improvements to payment integrity or reach a tolerable improper
payment and unknown payment rate,
5c. develop a plan to meet their improper payment and unknown payment
reduction targets, 14 and
6. report improper payment and unknown payment estimates of less than 10
percent for each program for which they published estimates in the
accompanying materials to their annual financial statements.
The criteria described above do not apply to all programs or agencies. For
example, if an agency determines through its risk assessment that none of its
programs or activities are susceptible to significant improper payments, criteria
three through six would not be applicable.
If an IG concludes that any of the agency’s programs or activities fail to meet any
of the applicable criteria, the agency is considered noncompliant under PIIA for
that fiscal year and is required to take additional actions for each year it is
noncompliant, such as providing OMB with a description of the actions that the
agency will take to come into compliance.
How many CFO Act According to their IGs, in fiscal year 2023, the most recent available year, 13 of
agencies complied with the 24 CFO Act agencies fully complied with PIIA criteria and related OMB
applicable legal criteria requirements. 15 This was a decrease from fiscal year 2022, when IGs reported
and guidance for that 14 of these agencies were compliant. Figure 5 provides an 8-year
management of comparison of agency compliance rates, as reported by agencies’ IGs. 16
improper payments?
Figure 5: CFO Act Agencies’ Compliance with PIIA or IPERA Criteria for Fiscal Years 2016
Through 2023, as Reported by Their Inspectors General
Page 10 GAO-25-107753 Improper Payments
The decrease in compliance with PIIA and related OMB criteria from fiscal years
2022 to 2023 is attributable to two previously compliant agencies becoming
noncompliant. Additionally, one previously noncompliant agency became
compliant. 17 While the IGs for 13 of the CFO Act agencies determined their
respective agencies were compliant with PIIA criteria in 2023, the IGs for five of
these agencies issued recommendations regarding improper payments. The
recommendations were related to the reliability of estimates and adequacy of risk
assessments, among other findings.
As shown in figure 6, nine of the 10 criteria had at least one noncompliant
agency in fiscal year 2023, and a few criteria had relatively high noncompliance
rates. For example, IGs found that seven of the 12 agencies for which criterion 6
was applicable had at least one program reporting an improper payment estimate
of over 10 percent.
Figure 6: CFO Act Agencies’ Compliance with PIIA and OMB Criteria for Fiscal Year 2023, as
Reported by Their IGs
a
The Department of Health and Human Services’ (HHS) IG determined that criteria 2a and 2b were not
applicable for HHS for specific programs identified in its IG compliance report. However, HHS IG found that the
agency did not risk assess every program with annual outlays greater than $10 million at least once in every 3
years.
Eleven agencies were noncompliant with at least one criterion in fiscal year 2023,
as reported by their IGs (see table 5).
Page 11 GAO-25-107753 Improper Payments
Table 5: Chief Financial Officers Act of 1990 Agencies Noncompliant with Payment Integrity
Information Act of 2019 and Office of Management and Budget Criteria for Fiscal Year 2023,
as Reported by Their Inspectors General
Agency Criteria that agency did not comply with
Department of Agriculture Publish corrective action plans
Publish reduction target
Report improper payments and unknown payment estimates
of less than 10 percent
Department of Defense Publish improper payment estimates
Department of Health and Human Publish improper payment estimates
Services Demonstrate improvements to payment integrity
Develop a plan to meet the reduction target
Report improper payments and unknown payment estimates
of less than 10 percent
Department of Homeland Security Publish improper payment estimates
Department of Housing and Urban
Publish improper payment estimates
Development
Department of Labor Publish payment integrity information within the agency
financial report (AFR)
Publish reduction target
Develop a plan to meet the reduction target
Report improper payments and unknown payment estimates
of less than 10 percent
Department of the Treasury Adequately conclude improper payment likelihood from risk
assessment
Report improper payments and unknown payment estimates
of less than 10 percent
Department of Veterans Affairs Report improper payments and unknown payment estimates
of less than 10 percent
Office of Personnel Management Publish improper payment estimates
Publish corrective action plans
Demonstrate improvements to payment integrity
Report improper payments and unknown payment estimates
of less than 10 percent
Small Business Administration Publish payment integrity information within the AFR
Post AFR on agency website
Publish improper payment estimates
Publish corrective action plans
Publish reduction target
Demonstrate improvements to payment integrity
Develop a plan to meet the reduction target
Report improper payments and unknown payment estimates
of less than 10 percent
Social Security Administration Demonstrate improvements to payment integrity
Source: GAO analysis of inspectors general compliance reports. | GAO-25-107753
IGs identified a variety of causes for agencies’ noncompliance with these criteria
and published numerous findings and recommendations for improvements.
• High improper payment rate estimates. IGs found seven agencies (USDA,
HHS, Department of Labor (DOL), Treasury, Department of Veterans Affairs
(VA), Office of Personnel Management (OPM), and SBA) noncompliant with
OMB criterion 6. IGs recommended that three of the seven (HHS, DOL, and
Page 12 GAO-25-107753 Improper Payments
VA) reduce their improper payment rate estimates below the 10 percent
threshold. For example, DOL’s IG recommended that DOL maintain its
current focus on increasing technical assistance and funding to states to
improve the improper payment reduction strategies and thereby reduce the
improper payment estimate rate. 18
• Unreliable estimates. IGs designated six agencies (Department of Defense,
HHS, Department of Homeland Security, HUD, OPM, and SBA) as
noncompliant with OMB criterion 3. IGs recommended that these six and two
additional agencies, USDA and Education, address their unreliable improper
payment estimates. For example, the SBA IG reported that SBA’s published
improper payment estimates were not accurate and that the population of
outlays subjected to sampling, testing, and reporting was not complete. 19 As
a result, the SBA IG issued multiple recommendations, including that the
agency ensure that timely and complete reconciliations are performed on the
population of transactions used for estimating improper payments and that
the agency implement statistically acceptable sampling and estimation
methodology plans.
• Inadequate risk assessments. The Treasury IG found that Treasury was
noncompliant with OMB criterion 2b, as the agency did not adequately
complete its risk assessments for all programs. 20 According to the IG, this
could lead to an inaccurate assessment of a program’s susceptibility to
improper payments. As a result, the IG recommended that the agency
accurately complete and review program-specific risk assessments. The IG
also recommended that Treasury consider all information available when
answering risk assessment questions. In addition, IGs made
recommendations to six other agencies (Department of Energy, HHS,
Department of the Interior, Environmental Protection Agency, OPM, and
SBA) to modify risk assessment methodologies or update their related
processes.
Agency Comments We provided a draft of this report to OMB for review and comment. OMB did not
have any comments on the report.
How GAO Did This To conduct this work, we compiled improper payment estimates from OMB’s
Study PaymentAccuracy.gov website. We summarized and compared the improper
payment estimates to identify any substantial changes from fiscal year 2023 to
fiscal year 2024. A substantial change in improper payments is one in which the
estimated improper payment amount changed by at least $1 billion, and the
improper payment rate changed more than the reported margin of error for the
agency estimate of improper payments. We reviewed the agencies’ respective
agency financial reports or performance and accountability reports and the
PaymentAccuracy.gov website to determine what factors agencies identified as
the causes for these changes. In addition, we reviewed the PIIA criteria
compliance reports each agency’s IG issued for fiscal year 2023, the most recent
available year.
We conducted this performance audit from August 2024 to March 2025 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on
our audit objectives.
Page 13 GAO-25-107753 Improper Payments
List of Addressees The Honorable David G. Valadao
Chairman
The Honorable Adriano Espaillat
Ranking Member
Subcommittee on Legislative Branch
Committee on Appropriations
House of Representatives
We are sending copies of this report to the appropriate congressional committees
and the Director of the Office of Management and Budget. In addition, the report
is available at no charge on the GAO website at https://www.gao.gov.
.
GAO Contact For more information, contact: M. Hannah Padilla, Director, Financial
Information Management and Assurance, PadillaH@gao.gov, (202) 512-5683
Sarah Kaczmarek, Managing Director, Public Affairs, KaczmarekS@gao.gov,
(202) 512-4800
A. Nicole Clowers, Managing Director, Congressional Relations,
ClowersA@gao.gov, (202) 512-4400
Staff Acknowledgments: Matt Valenta (Assistant Director), Bryan Prince
(Auditor in Charge), Kareen Borhaug, Anthony Clark, Giovanna Cruz, Tabitha
FitzGibbon, Patrick Frey, Syd Goodman, Jonathan Meyer, Megan Jones, and
Diana Vu.
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Endnotes
1An improper payment is defined by law as any payment that should not have been made or that
was made in an incorrect amount (including overpayments and underpayments) under statutory,
contractual, administrative, or other legally applicable requirements. It includes any payment to an
ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any
payment for a good or service not received (except for such payments where authorized by law),
and any payment that does not account for credit for applicable discounts. 31 U.S.C. § 3351(4).
When an executive agency’s review is unable to discern whether a payment was proper because of
insufficient or lack of documentation, this payment must also be included in the improper payment
estimate. 31 U.S.C. §3352(c)(2).
2GAO, Improper Payments: Information on Agencies’ Fiscal Year 2023 Estimates, GAO-24-106927
(Washington, D.C.: Mar. 26, 2024).
3The Medicare improper payment estimate is composed of the Medicare Fee-For-Service,
Medicare Advantage (Part C), and Medicare Prescription Drug (Part D) programs.
4Medicaid is a federal-state program that provides health coverage assistance for certain
individuals who qualify due to low income or other criteria. HHS annually computes Medicaid
improper payments as a weighted average of states’ improper payment estimates for three
component parts: fee-for-service, managed care, and beneficiary eligibility determinations.
5OMB’s PaymentAccuracy.gov data call for fiscal year 2024 included guidance for agencies to use
when reporting the types of their estimated improper payments. This guidance was in addition to
that provided in OMB M-21-19 on reporting estimates for programs or activities that are identified
as susceptible to improper payments. According to OMB M-21-19, “overpayments” are payments
exceeding the amount due, and are payments that, in theory, should or could be recovered.
“Underpayments” are those in which recipients did not receive the funds to which they were
Page 14 GAO-25-107753 Improper Payments
entitled. “Unknown payments” are those that a program cannot determine were either proper or
improper. “Technically improper payments” are those in which recipients received funds they were
entitled to, but the payment failed to follow all applicable statutes or regulations.
6GAO, COVID-19: Current and Future Federal Preparedness Requires Fixes to Improve Health
Data and Address Improper Payments, GAO-22-105397 (Washington, D.C.: Apr. 27, 2022).
7GAO, Emergency Relief Funds: Significant Improvements Are Needed to Ensure Transparency
and Accountability for COVID-19 and Beyond, GAO-22-105715 (Washington, D.C.: Mar. 17, 2022).
8The $5 billion threshold was selected because the programs that met this threshold combine to
cover over 75 percent of all government-wide reported improper payment estimates.
9As described later in this report, agencies must report an improper payment rate of less than 10
percent for each program for which they publish an estimate if they are to be considered in
“compliance” under PIIA. 31 U.S.C. § 3351(2)(F).
10PaymentAccuracy.gov is an official U.S. government website managed by OMB. It contains,
among other things, information about current and historical rates (i.e., agency-reported amounts
as a percentage of outlays) and amounts of improper payments, root causes of monetary loss and
improper payments, monetary-loss recovery efforts, and high-priority program scorecards. In
addition, for purposes of this report, a program that has experienced a substantial decline or
increase in improper payments is one in which the estimated improper payments amount
decreased or increased by at least $1 billion, and the improper payment rate decreased or
increased more than the reported margin of error for the agency estimate of improper payments.
This latter condition reduces but does not eliminate the possibility that the observed declines or
increases are due to variability arising from the improper payment estimation process.
1131 U.S.C. § 3352.
1231 U.S.C. § 3353(a).
13OMB M-21-19, issued on March 5, 2021, became effective starting in fiscal year 2021.
14OMB M-21-19’s criteria 5a, 5b, and 5c relate to 31 U.S.C. § 3351(2)(E), which states that
compliance means that the executive agency “publishes improper payment reductions targets
prepared under [31 U.S.C. § 3352(d)] that the executive agency may have in the accompanying
materials to the annual financial statement for each program or activity assessed to be at risk, and
has demonstrated improvements and developed a plan to meet the reduction targets.”
15The CFO Act, Pub. L. No. 101-576, 104 Stat. 2838 (Nov. 15, 1990) (codified as amended in
scattered sections of 31 U.S.C.), among other things, established chief financial officers to oversee
financial management activities at 23 major executive departments and agencies. The list now
includes 24 entities, which are often referred to collectively as CFO Act agencies, and is codified as
amended at 31 U.S.C. § 901(b). We focused on the 24 CFO Act agencies because the improper
payment estimates for those agencies accounted for over 99 percent of the federal government’s
reported estimated improper payments for fiscal year 2024. However, PIIA applies to both CFO Act
and non-CFO Act executive agencies. According to PaymentAccuracy.gov, 44 out of the 59
executive branch agencies reporting in fiscal year 2023 were determined by their respective IGs to
be compliant with PIIA criteria. Per OMB M-21-19, the compliance reports are due within 180 days
following the publishing of agencies’ annual financial statements and accompanying materials,
which typically occurs in mid-November. The most recent IG compliance reports available were
issued in 2024 for agencies’ fiscal year 2023 compliance with PIIA criteria.
16This comparison includes Improper Payments Elimination and Recovery Act of 2010 (IPERA)
(Pub. L. No. 111-204, 124 Stat. 2224) requirements for fiscal years prior to 2020 and PIIA
requirements for fiscal year 2020 onward. IPERA established a requirement for agency IGs to
report annually on their respective agencies’ compliance. In March 2020, Congress and the
President enacted PIIA, which repealed IPERA and the other improper payments reporting-related
statutes and enacted substantially similar provisions, including those related to IGs’ reporting on
agency compliance with criteria and the compliance criteria themselves. Pub. L. No. 116-117, 134
Stat. 113 (codified at 31 U.S.C. §§ 3351-58).
17The two agencies that became noncompliant with applicable PIIA criteria in fiscal year 2023 were
the Office of Personnel Management and Social Security Administration. The agency that became
compliant with applicable PIIA criteria in fiscal year 2023 was the Department of Education.
Page 15 GAO-25-107753 Improper Payments
18Department of Labor, Office of Inspector General, The U.S. Department of Labor Did Not Meet
the Requirements for Compliance with the Payment Integrity Information Act for FY 2023, 22-24-
007-13-001 (Washington, D.C.: May 2024).
19Small Business Administration, Office of Inspector General, Independent Auditors’ Report on
SBA’s Fiscal Year 2023 Compliance with the Payment Integrity Information Act of 2019, 24-16
(Washington, D.C.: May 2024).
20Department of the Treasury, Office of Inspector General, Audit of Treasury’s Compliance with the
PIIA Requirements for Fiscal Year 2023, OIG-24-029 (Washington, D.C.: May 2024).
Page 16 GAO-25-107753 Improper Payments
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