Executive
Waste of the Day: Federal Government Loses Up to $521 Billion to Fraud Annually
Topline: The federal government loses between $233 billion and $521 billion to fraud every year, according to a new study from the Government Accountability Office.
Fraud as a pervasive problem for the federal government
Key facts: The fraud losses represent 3 to 7 percent of the $40 trillion the federal government obligated from 2018 to 2022, a ratio the GAO says is comparable to other large governments like the U.K.
The dollar figure includes only crimes that cause the government to lose money it already has — not tax fraud or other ways the government loses potential revenue.
It does include over $100 billion lost to unemployment insurance fraud and $200 billion in fraudulent business loans from the Small Business Administration during the pandemic.
The lowest estimate, $233 billion, is still larger than the 2022 budget of all but eight federal agencies.
Only $4.41 billion to $7.31 billion was reported as “confirmed fraud” each year with an official court ruling. The rest was settled out of court or, more likely, never recouped at all.
Some of the biggest risk factors for fraud are expanding government programs or adding new ones, allowing state governments to control payments, and relying on officials with limited training or experience, the GAO wrote.
The report does not necessarily predict how much will be lost to fraud in the future.
The government never can get its money back
Background: The federal government arguably does a poor job of getting money back once it’s lost to fraud.
The Justice Department announced in April that it recovered only $1.4 billion of money stolen during the pandemic, less than 1% of the total amount. OpenTheBooks contributed to a report in the Washington Times detailing the process, explaining that tens of thousands of businesses on the Treasury’s “Do Not Pay” list received loans anyway.
Critical quote: The Office of Management and Budget said the GAO report was “misleading” and will “create confusion” because it relies on projections and estimates and not just hard data.
Even the GAO admitted “we cannot eliminate the possibility that the actual amount of fraud could be outside of the range of our estimate.”
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.
This article was originally published by RealClearInvestigations and made available via RealClearWire.
Adam Andrzejewski (say: Angie-eff-ski) was the CEO/founder of OpenTheBooks.com. Before dedicating his life to public service, Adam co-founded HomePages Directories, a $20 million publishing company (1997-2007). His works have been featured on the BBC, Good Morning America, ABC World News Tonight, C-SPAN, The Wall Street Journal, The New York Times, USA Today, FOX News, CNN, National Public Radio (NPR), Forbes, Newsweek, and many other national media.
Today, OpenTheBooks.com is the largest private repository of U.S. public-sector spending. Mission: post "every dime, online, in real time." In 2022, OpenTheBooks.com captured nearly all public expenditures in the country, including nearly all disclosed federal government spending; 50 of 50 state checkbooks; and 25 million public employee salary and pension records from 50,000 public bodies across America.
The group's aggressive transparency and forensic auditing of government spending has led to the assembly of grand juries, indictments, and successful prosecutions; congressional briefings, hearings, and subpoenas; Government Accountability Office (GAO) audits; Congressional Research Service (CRS) reports; federal legislation; and much more.
Our Honorary Chairman - In Memoriam is U.S. Senator Tom Coburn, MD.
Andrzejewski's federal oversight work was included in the President's Budget To Congress FY2021. The budget cited his organization by name, bullet-pointed their findings, and footnoted/hyperlinked to their report.
Posted on YouTube, Andrzejewski's presentation, The Depth of the Swamp, at the Hillsdale College National Leadership Seminar 2020 in Naples, Florida received 3.8 million views.
Andrzejewski has spoken at the Columbia School of Journalism, Harvard Law School and the law schools at Georgetown and George Washington regarding big data journalism. As a senior policy contributor at Forbes, Adam had nearly 20 million pageviews on 206 published investigations. In 2022, investigative fact-finding on Dr. Fauci's finances led to his cancellation at Forbes.
In 2022, Andrzejewski did 473 live television and radio interviews across broadcast, major cable platforms, and radio shows. Andrzejewski is the author of The Waste of the Day column at Real Clear Policy. The column is syndicated by Sinclair Broadcast Group, owners of nearly 200 ABC, NBC, CBS, and FOX affiliates across USA.
Andrzejewski passed away in his sleep at his home in in Hinsdale, Illinois, on August 18, 2024. He is survived by his wife Kerry and three daughters. He also served as a lector at St. Isaac Jogues Catholic Church and finished the Chicago Marathon eight times (PR 3:58.49 in 2022).
Waste of the Day articles published after August 18, 2024 are considered posthumous publications.
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