A new government audit shows rising erroneous payments across major federal programs, with health care and tax credits accounting for the largest share.
By yourNEWS Media Newsroom
The U.S. government recorded an estimated $186 billion in improper payments during fiscal year 2025, marking an increase of $24 billion from the previous year, according to The Epoch Times, citing a report released by the Government Accountability Office.
The report found that approximately $153 billion—about 82 percent of the total—stemmed from overpayments. Improper payments include funds issued to the wrong recipients, payments made without sufficient documentation, or amounts that exceed what was authorized.
Since fiscal year 2003, cumulative improper payments across federal programs have reached an estimated $3 trillion, though the watchdog noted the true figure could be higher due to reporting limitations.
The 2025 total reflects data from 64 programs administered by 15 federal agencies, underscoring what auditors described as a persistent, government-wide issue spanning more than two decades.
Several large federal programs accounted for a significant portion of the total. Medicaid recorded approximately $37 billion in improper payments, followed by Traditional Medicare at $28.8 billion and Medicare Advantage at $23.7 billion. Combined, these programs represented more than half of all improper payments reported.
Improper payments in Medicaid increased by $6.3 billion compared to 2024. The US Department of Health and Human Services attributed the rise to errors in eligibility reviews and provider screening following the phase-out of pandemic-era enrollment policies.
Other major contributors included the Earned Income Tax Credit at $21 billion, the Supplemental Nutrition Assistance Program at $10 billion, and the Shuttered Venue Operators Grant at $10 billion. Together, these programs accounted for more than 20 percent of the total.
Improper payments tied to the Earned Income Tax Credit rose by $5.2 billion, though the US Department of the Treasury did not provide a specific explanation for the increase.
The report also highlighted elevated improper payment rates across multiple programs. Nineteen programs reported error rates of at least 10 percent, including six exceeding 25 percent.
The Small Business Administration reported improper payments for the first time in the Shuttered Venue Operators Grant program, which was established to support entertainment and live event businesses during the COVID-19 pandemic. Of the $16.25 billion allocated by Congress to approximately 13,000 recipients, nearly 70 percent was identified as improper.
As of October 2024, the Small Business Administration had flagged $544 million in potential improper payments for recovery. However, auditors reported that only one demand letter had been issued, and no cases had been referred to the Treasury Department for collection as of March 2025.
Other programs also showed rising error rates. The Emergency Conservation Program for disaster recovery reported an improper payment rate of 55.5 percent in 2025, up from 45.2 percent in 2024 and 40.4 percent in 2023.
Auditors noted that improper payments can result from both administrative errors and fraud. Errors may occur when agencies fail to complete required documentation before issuing funds, while fraud involves deliberate misuse, such as applications submitted using false or stolen identities.
The report also cited concerns about incomplete data in certain programs. The Temporary Assistance for Needy Families, which distributed approximately $16.5 billion in fiscal year 2025, lacks comprehensive reporting requirements. As of April 2026, Congress had not enacted legislation mandating states to provide the data necessary to estimate improper payments within the program.
The findings highlight ongoing challenges in federal payment oversight and recovery efforts, with auditors calling attention to gaps in reporting, enforcement, and accountability across multiple agencies.
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