The federal government may be losing as much as $521 billion annually to fraud, according to a report from the Government Accountability Office (GAO) that analyzed data from fiscal years 2018 through 2022. During the same period, total estimated losses ranged from $233 billion to $521 billion each year.
Improper payments—defined as payments made in error or in incorrect amounts—have totaled about $2.8 trillion since 2003, the GAO said. In fiscal year 2024 alone, federal agencies reported $162 billion in improper payments across 68 programs. Five areas—Medicare, Medicaid, Supplemental Nutrition Assistance Program (SNAP) benefits, Earned Income Tax Credits, and the Restaurant Revitalization Fund—accounted for 75% of that total. Medicare alone made up about 34% of the reported improper payments.
The GAO report evaluated the potential for artificial intelligence to help detect and prevent fraud but warned that AI should not be viewed as a standalone solution. It emphasized the need for accurate, reliable data and human oversight to avoid amplifying errors.
The report also recommended actions independent of AI, including making permanent a requirement for the Social Security Administration to provide full death data to the Treasury Department’s “Do Not Pay” system. This measure is aimed at preventing payments to deceased individuals.
