Fraud Risk Management: 2018-2022 Data Show Federal Government Loses an Estimated $233 Billion to $521 Billion Annually to Fraud, Based on Various Risk Environments

By Rebecca Shea and Jared B. Smith
  All federal programs and operations are at risk of fraud. Therefore, agencies need robust processes in place to prevent, detect, and respond to fraud. While the government obligated almost $40 trillion from fiscal years 2018 through 2022, no reliable estimates of fraud losses affecting the federal government previously existed. As part of GAO’s work on managing fraud risks, this report (1) estimates the range of total direct annual financial losses from fraud based on 2018-2022 data and (2) identifies opportunities and challenges in fraud estimation to support fraud risk management. GAO estimated the range of total direct annual financial losses from fraud based on 2018-2022 data using a Monte Carlo simulation model. GAO identified opportunities and challenges through interviews and data collection focused on 12 agencies representing about 90 percent of federal obligations. What GAO Recommends GAO is making two recommendations to OMB—one in collaboration with the Council of the Inspectors General on Integrity and Efficiency (CIGIE) and the other with agency input to improve the availability of fraud-related data. GAO is also making a recommendation to the Department of the Treasury to expand government-wide fraud estimation, in consultation with OMB. OMB generally agreed with the recommendations but disagreed with the estimate. GAO believes the estimate is sound, as discussed in the report. CIGIE stated it would work with OMB to consider how OIGs might improve fraud-related data. Treasury agreed with the recommendation.   

Washington, DC: U.S. Government Accountability Office, 2024. 80p.