According to a report released by the Government Accountability Office (GAO), U.S. federal agencies paid $175 billion in error during fiscal year 2019, $24 billion more than fiscal year 2018.
The payments in error are referred by the GAO as "improper" and occur when the federal government "overpays, underpays, or makes payments to ineligible recipients."
The GAO's report revealed that the majority of improper payments were related to Medicaid, Medicare, and Earned Income Tax Credits and occur because of fraud or other discrepancies.
The Office of Management and Budget listed the 2019 improper payments in four categories:
- Overpayments: About $79.1 billion, equaling roughly 45.2%
- Underpayments: About $12.9 billion, equaling roughly 7.4%
- Unknown: About $74.1 billion, equaling roughly 42.4%
- Technically improper due to statute or regulation: About $8.7 billion, equaling roughly 5%