he federal government continues to lose an estimated $233 billion to $521 billion each year to fraud, while most agencies overseeing the nation’s largest federally funded programs have yet to implement one of the Government Accountability Office’s top recommendations for preventing those losses, according to a new GAO report.
The report, Managing Risks in Federally Funded, State-Administered Programs, reviewed the 20 largest federally funded, state-administered programs, which accounted for approximately $1.1 trillion in federal obligations in fiscal year 2025.
The GAO found in the report released Thursday that most agencies have not completed documented fraud risk assessments. The assessments are instrumental in identifying where fraud is most likely to occur and how to prevent it.
“Federal and state agencies can better manage fraud risks and prevent fraud by applying GAO frameworks for managing fraud risks and improper payments, as well as other leading practices; leveraging available federal analytic resources, such as Do Not Pay, to verify recipient identity and eligibility before issuing federal funds; and implementing recommendations from GAO and other oversight entities that would address existing program vulnerabilities,” the report read.
The watchdog said there are currently 22 open recommendations that are focused on enhancing fraud prevention practices across the programs covered in the report.
The watchdog urged federal agencies to implement them to better safeguard taxpayer funds, particularly in state-administered programs.
Hellbound and Down 