GAO Reissues Fraud Risk Report with New Legislative Context

GAO reissued its Q&A report "Combating Fraud: Managing Risks in Federally Funded, State-Administered Programs" with revisions on August 7, 2026, adding context on recently introduced legislation on program integrity (pages 17-18). The report covers the 20 programs that accounted for $1.1 trillion in federal obligations in FY 2025, representing nearly 90 percent of obligations for programs administered by state and local entities with obligations over $100 million.

The report notes that $1.2 trillion was disbursed to these programs in FY 2025. It highlights that only five of the 20 programs documented evidence of risk identification and likelihood assessment, while the remaining fifteen lacked such documentation. Examples of specific fraud include a consultant convicted of falsifying permits in a $4.3 million airport improvement project, underreported income by households receiving housing vouchers, and a scheme involving student financial-aid applications for over 1,200 individuals to over 100 schools in 24 states.

GAO estimates annual fraud losses between $233 billion and $521 billion, or 3 percent to 7 percent of average federal obligations, based on data from fiscal years 2018 through 2022. To address these losses, GAO recommends applying its Fraud Risk Framework, leveraging analytic tools such as the Do Not Pay program, and implementing existing oversight recommendations.

The agency has 22 open recommendations for federal agencies and offers Congress guidance on enhancing analytics, increasing transparency through reporting and data, and adapting program designs to evolving fraud threats. GAO will monitor agency actions and proposed legislation related to the report's recommendations.