Report: State-Administered Federal Benefit Programs Afflicted by Multiple Oversight Failures That Aid Fraudsters
Only five of the 20 biggest state-administered federal benefit programs have anti-fraud detection measures in place to ensure that more than $1.1 trillion in spending actually gets to the eligible intended recipients, according to a new report from the Government Accountability Office (GAO).
“Information about fraud risks specific to each of the 20 selected programs varies, in part, because federal agencies have not fully assessed their risks. Of the 20 programs, five documented evidence consistent with identifying risks and assessing the likelihood of those risks to prioritize action; the other 15 did not have such documented evidence,” GAO explained.
“Examples of specific fraud risks GAO identified in the 20 selected programs included cases where a consultant was convicted of falsifying permits used during a $4.3 million airport improvement project; households receiving housing assistance vouchers were underreporting income and landlords were receiving payments for vacant units; and an individual allegedly ran a fraud scheme involving student financial aid applications for over 1,200 people to over 100 schools in 24 states,” the report said.
The report also pointed to findings of mandatory “single audit” accounting operations performed on the programs, noting that “the Single Audit Act and related guidance require states and other nonfederal entities to undergo an audit if they spend $1 million or more in federal awards from all sources in a fiscal year. Single audit findings — particularly those that are severe — may mean that programs lack the controls and necessary safeguards to prevent, detect, and respond to fraud. In addition, persistent findings — findings that repeated as unresolved by corrective action for at least two years or have been reported in three audits — can indicate continuing critical risks and issues within a program.
“Our analysis of single audit findings from 2020 through 2024, the most recent years of complete data available, found severe and persistent findings in 18 of the 20 selected federally funded, state-administered programs,” GAO reported. “On average, about 4 percent of nearly 90,000 single audits of these 18 programs had severe and persistent findings.”
The 20 programs examined by GAO — the investigative arm of Congress in its oversight of the executive branch — included many well-known operations like the Supplemental Nutrition Assistance Program (SNAP), which is administered by the Department of Agriculture’s (USDA) Food Nutrition Service (FNS), and the National School Lunch program. Medicaid and various disaster assistance programs managed by the Federal Emergency Management Administration (FEMA) were also among the 20. Each of the 20 programs spent at least $100 million in 2025.
The GAO investigation focused on 12 forms of fraudulent activity that are readily identifiable using available digital tools. Among the dozen are misuse of award funds, billing fraud, conflicts of interest, criminal corruption, embezzlement, bribery and kickbacks, collusion in contract and bid manipulation, misrepresenting qualifications to obtain contracts, benevolent fraud (staff providing insider information to favored bidder), conspiracy, misrepresenting identity, and redirecting payments.
The five programs that do conduct fraud assessment and prevention analyses, as required by federal program guidance, include USDA’s National School Lunch Program, the Broadband Equity, Access and Deployment Program in the Department of Commerce (DOC), the Department of Energy’s (DOE) Home Energy Rebates Program, the Public Assistance program in the Department of Homeland Security (HSC), and the Airport Improvement Program in the Department of Transportation (DOT).
Among the 10 programs that only conducted partial anti-fraud assessments were the Medicaid, Temporary Assistance for Needy Families (TANF), Child Care and Development Block Grants, and Children’s Health Insurance in HHS, as well as the Supplemental Nutrition Assistance for Women, Infants and Children, and SNAP State Administrative Matching Grants in the USDA.
The five federal programs operating with state assistance that did no anti-fraud assessments included Section 8 Housing Choice Vouchers and Community Development Block Grant Disaster Recovery Funding in the Department of Housing and Urban Development (HUD), the Affordable Care Act State Waiver Program in HHS, the Environmental Protection Agency’s (EPA) Drinking Water State Revolving Fund, and the SNAP program in HHS.
This latest of hundreds of GAO reports identifying hundreds of billions of federal tax dollars lost to waste, fraud, and corruption comes as the White House Anti-Fraud Task Force (WHAFTF) headed by Vice President J.D. Vance continues to notch multiple prosecutions of huge fraud and corruption cases in California, Minnesota, Arizona, and Nevada.
Among recommendations GAO provided to Congress in the report were reinstating key reporting requirements on agencies’ anti-fraud efforts that expired in 2020. “Legislative requirements for agencies to report on their antifraud controls and fraud risk management efforts in their annual financial reports expired in 2020. Since then, there has been no similar requirement for agencies to report on their efforts to manage fraud risks. Consequently, we recommended that Congress amend the Payment Integrity Information Act of 2019 to reinstate the fraud-related reporting requirements. With this information, Congress would be better positioned to identify gaps in agencies’ fraud risk management practices, benchmark progress over time, and drive accountability.”
Rep. Daniel Meuser (R-Pa.) introduced a bill to do so in February 2025. The bill was referred to the House Committee on Oversight and Government Reform and the House Ways and Means Committee. Nothing has since been done by either committee, according to congress.gov.


