$186 Billion. Gone.

The Government Accountability Office released its fiscal year 2025 improper payments report, and the number is staggering: $186 billion sent out wrong by the federal government in a single year.

The GAO audited 64 programs across 15 agencies, covering roughly three-quarters of all non-interest federal spending — about $4.5 trillion total, according to the Committee for a Responsible Federal Budget. The $186 billion represents what those agencies self-reported. The GAO has explicitly said the actual total could be much higher.

Here's Where Your Money Actually Went

Medicare led the wreckage at $57 billion in improper payments — 31% of the entire total. This is a program with a nearly $1.1 trillion annual budget, according to the NY Post. Medicaid came in second at $37 billion.

That's $94 billion from health care programs alone. More than half the entire improper payments total, from two programs.

The Earned Income Tax Credit added another $21 billion. The EITC's improper payment rate sits above 30%, according to the Committee for a Responsible Federal Budget. Over a third of payments in that program are wrong.

SNAP — food stamps — added $10 billion more. The Shuttered Venue Operators Grant, a pandemic-era rescue program for live venues and theaters, also contributed $10 billion. Its improper payment rate: 68.9%. That's the highest of any federal program audited. Nearly seven out of every ten dollars sent through that program went somewhere it shouldn't have.

The Paycheck Protection Program is still posting a 19.2% error rate — six years after COVID started, according to the CRFB.

This Isn't Mostly Fraud — But That's Not Reassuring

The GAO defines improper payments more broadly than outright fraud. The $186 billion includes overpayments ($153 billion, or 82% of the total), underpayments ($10 billion), payments where the amount was right but the paperwork was wrong ($8 billion), and $14 billion in payments where the nature of the error couldn't even be determined, according to the CRFB.

So NOT all of this is someone stealing. A lot of it is bureaucratic incompetence — agencies paying the wrong amount because their systems, data, and controls are garbage. Whether a dollar is stolen or accidentally handed to the wrong person, it's still gone.

$3 Trillion Since 2003

The GAO puts the cumulative total of improper payments since 2003 at $3 trillion. Kristen Kociolek, managing director of GAO's Financial Management and Assurance team, told the Washington Times the pandemic years of 2020-2023 drove a dramatic spike, as new programs were stood up fast and existing ones expanded rapidly with minimal oversight controls.

The acting comptroller general of the GAO, Orice W. Brown, didn't mince words: "Federal agencies must do more to protect taxpayer dollars from the errors that drive improper payments. This $186 billion problem demands urgent action — agencies need stronger controls, better data, a commitment to accountability, as well as robust congressional oversight," according to Fox Business.

Sen. Rand Paul, R-KY, appeared on Fox Business and noted this problem recurs "year after year" with no real fix.

The Trump Administration's 'War on Fraud' Problem

The White House has been loudly marketing its anti-fraud push. Vice President JD Vance is running a fraud task force targeting states — including New York — threatening to pull federal funding if they don't clean up their Medicaid rolls. CMS Administrator Mehmet Oz announced all states must revalidate Medicaid providers, according to Nextgov/FCW.

The FY2025 data covers a period when that crackdown was already underway. Improper payments still went up by $24 billion. Nextgov/FCW notes the GAO attributes much of the increase to programs that simply didn't report data in FY2024 but did in FY2025 — a methodology shift, not purely a policy failure.

There's another credibility problem for the administration. Last month, CMS admitted to an error in its own fraud analysis of Medicaid in New York — the exact analysis it used to justify ramping up scrutiny of that state's program, according to Nextgov/FCW. The administration can't trumpet its fraud-fighting credentials while botching the math on its flagship fraud investigation.

What's Missing From Most Coverage

Nearly every outlet focused on the $186 billion headline number. Few dug into what the report leaves out.

The GAO's improper payments estimate excludes the federal tax gap — the difference between taxes legally owed and taxes actually paid. That number runs into the hundreds of billions annually. The CRFB specifically flagged this omission. The waste problem is bigger than $186 billion.

Also excluded: the Department of Health and Human Services' Temporary Assistance for Needy Families program (TANF), which spent roughly $16.5 billion in FY2025 and has been flagged as susceptible to significant improper payments, according to the NY Post. It's not even in the count.

What This Means for You

The federal government is currently spending trillions more than it takes in. The national debt just breached $36 trillion. And buried inside that debt is $186 billion in payments that went to the wrong people, in the wrong amounts, for the wrong reasons — every single year.

This isn't a partisan issue. This happened under Democrats. It's happening under Republicans. The GAO has been making recommendations to Congress for years. Congress keeps not acting.

Regular Americans who file their taxes accurately, follow the rules, and live within their means are subsidizing a federal payment system with the financial discipline of a college freshman with his first credit card.

The tab since 2003: $3 trillion. And climbing.