Agencies see record reduction in improper payments in fiscal 2024 

The Biden White House is touting reductions in agencies’ improper payments, as the incoming Trump administration promises to eliminate fraud and improper payments under a broader push to roll back regulations and curtail the size of government and its spending.

The improper payment rate for fiscal 2024 was down to 3.97%, or about $161.5 billion, according to annual data released by the Office of Management and Budget last week. 

That total included not only instances where the government made payments to fraudsters, but also payments that shouldn’t have been made or were made in the wrong amount. That can also include mistakes made by the government itself.

Last year, for example, $11.5 billion of the $236 billion in improper payments represented underpayments, where the recipient didn’t get all of what they were supposed to. 

The total $236 billion for 2023, and $161.5 billion for 2024, also included instances of unknown payments, where the government cannot determine whether a payment was proper or not.

The Government Accountability Office previously estimated that the government loses up to $521 billion annually to fraud, although OMB has argued that the estimate is “simply not plausible” and questioned GAO’s methodology of using a simulation model to arrive at that number.

President-elect Donald Trump vowed in September that his Department of Governmental Efficiency, or DOGE — which is not a department of the federal government, but rather an advisory effort headed by billionaire Elon Musk and former presidential candidate Vivek Ramaswamy — will field an “action plan to totally eliminate fraud and improper payments within six months.”

The DOGE account on X, formerly Twitter, has since posted about the 2023 improper payment tally of $236 billion. “The real number is far higher,” Musk himself posted.

Musk and Ramaswamy have said that they will use executive action to slash the headcount of the government, roll back regulations and cut government spending, including by “identifying pinpoint executive actions that would result in immediate savings for taxpayers” by ending “waste, fraud and abuse.”

Trump promised in September that the slashing of fraud and improper payments — already an ongoing effort by some in government — would save trillions, but the rate of these improper payments for the latest fiscal year is well below one trillion. Trump did not specify the timeline for achieving such savings. 

The new numbers from OMB are also down from a pandemic-era spike of 7.16% in fiscal 2021. 

There were problems with improper payments and known weaknesses — like the lack of required fraud assessments in some government programs — before the pandemic even started. The last time the improper payment rate hit less than 4% was in 2013, according to OMB data. 

When the government quickly pushed out trillions of dollars in response to the health crisis, a lack of controls — like verifying that someone was eligible before paying them — in some programs led to more fraud and improper payments. 

The Biden administration credited a “government-wide approach focused on improving up-front controls, prioritizing fraud prevention and driving increased collaboration between agencies and their inspectors general” for the reduction.

“More work remains to continue protecting taxpayer dollars and ensuring that the government works better for the American people,” the OMB announcement noted. 

Oversight officials have already suggested fixes like improving the use of data to find and prevent fraud. Data sharing is often an arduous process in federal agencies bound by statutory limits.

Congress could also reinstate or create new reporting requirements for agencies, GAO has recommended, or permanently stand up an analytics center that was used to track pandemic spending permanent.

The DOGE will have some lawmakers to look to on Capitol Hill as potential allies in their work. Rep. Marjorie Taylor Greene, R-Ga., is set to chair a new DOGE subcommittee in the House Oversight and Accountability Committee. 

A bipartisan duo on that committee have already been working on a “scorecard” for fraud and improper payments in government programs, although they’ve run into problems accessing the necessary data to track the problem.