Why It Matters

Federal agencies handed out roughly $186 billion in improper payments in fiscal year 2025, including money sent to the wrong people, sent in the wrong amounts, or sent for ineligible purposes. Since 2003, the cumulative total of such erroneous payments has reached approximately $3 trillion, according to a recent Government Accountability Office (GAO) report.

But Congress has already passed the law to fix these issues. The Payment Integrity Information Act of 2019 (PIIA) requires agencies to report improper payment estimates for each risk-susceptible program. Yet years into implementation, the machinery remains broken, not because the statute is deficient, but because agencies are not following it and the Office of Management and Budget (OMB) is not enforcing it.

The GAO report is the 11th and final in a quarterly series on improper payments. Some agencies have not even submitted the paperwork Congress requires. Others lack the basic systems to track whether they are complying with the law.

The Big Picture

Seven agencies have posted improper payment rates of 10 percent or higher for between two and four consecutive fiscal years from 2021 through 2024. These are not marginal problems in obscure programs. Entire swaths of their benefit programs are functioning as sieves, with one dollar in every ten vanishing through administrative failure.

The compliance picture is uneven. Of six agencies with programs found noncompliant for three consecutive years, only four submitted the required information to Congress, OMB, and GAO. The Departments of Labor and Treasury did not submit this information in a timely fashion. Treasury also failed to report to GAO regarding three-year noncompliance information that federal law requires.

When GAO examined the agencies' policies and procedures, the findings were worse. Five of the seven agencies lacked sufficient documented policies and procedures to ensure consistent timely reporting for their noncompliant programs. In other words, these agencies do not have their own internal systems in place to track whether they are meeting legal requirements. They are flying blind while distributing billions.

All agencies with noncompliant programs for two consecutive years had either submitted additional program integrity proposals to OMB or taken other actions to help bring their programs into compliance. But responsiveness after the fact is not the same as prevention. The question is why it takes years of documented failure before agencies move to fix the problem.

The GAO's diagnosis points to a governance failure at the top. OMB provides guidance on PIIA requirements to agencies, but GAO found that OMB's guidance does not direct noncompliant agencies to submit the required annual reports. In other words, the government's central budget office is not using its authority to enforce the law it is supposed to administer. This is not a case of ambiguous statutory language or competing interpretations. PIIA is explicit: agencies must report, and OMB must ensure compliance.

GAO is making six recommendations in this report. One is directed to OMB to clarify its guidance for agencies to report required annual information. The other five recommendations are directed to the Departments of Labor, Education, Health and Human Services, Treasury, and Agriculture — each to design and implement a process to help ensure tracking and monitoring of PIIA reporting requirements.

The response from the agencies has been mixed. The Department of Labor, Education, Health and Human Services, Treasury, and the Department of Agriculture all agreed with the GAO recommendations. OMB, however, did not provide comments on the GAO recommendations.

The Bottom Line

Rather than continuing to document the same failures year after year, Congress and GAO are moving toward a different model, one focused on agency accountability and systemic reform.

The five agencies that agreed to GAO's recommendations have signaled willingness to improve their systems. But agreement is not implementation. If they succeed in building the tracking and monitoring processes GAO recommends, improper payment rates should begin to decline. If they do not, the cycle will continue, with another $186 billion or more in erroneous payments, another year of taxpayer money disappearing into the bureaucracy, and another GAO report documenting the same failures.

The question now is whether the Trump administration will use its authority through OMB to enforce compliance, or whether these recommendations will join the pile of previous warnings that went largely unheeded.

Access the Legis1 platform for comprehensive political news, data, and insights.

Spot something wrong? Report an issue with this article