Report: Fraud costs U.S. government hundreds of billions of dollars annually

[New Sancai Compilation First Edition] The U.S. Government Accountability Office (GAO), a non-partisan agency that reports to the U.S. Congress, stated in a press release on April 16 that the U.S. federal government may lose between $233 billion and $521 billion each year due to fraud.

GAO said fraud is estimated to account for 3% to 7% of average federal expenditures. The U.S. Government Accountability Office said fraud losses in the U.S. were in line with countries such as the United Kingdom.

In its report, GAO made recommendations to the Office of Management and Budget (OMB) and the Treasury Department on how to address the problem:

OMB should develop guidance on data collection by the Office of Inspector General to support fraud assessments. The guidance should identify and establish consistent data elements and terminology for use by OIG and include a timeline for implementation.

OMB should also develop guidance on data collection to support fraud assessment. The guidance should identify and establish consistent data elements and terminology for use across agencies; include implementation timelines and key milestones; and leverage existing data systems and processes.

Treasury, in collaboration with OMB, should work to evaluate and identify ways to expand government-wide fraud assessment to support fraud risk management. Departments should prioritize program areas with increased fraud risk, respond to changes in data availability or quality, and leverage data analytics capabilities.

GAO said it conducted the study because the government spent $40 trillion from fiscal years 2018 to 2022 without a reliable estimate of fraud losses.

The study is not without its critics. Jason Miller, OMB's associate director for management, told The Washington Post that the fraud estimates "are not based on analysis of a single federal program," but rather come from "simulation models."

Miller said the release of the study would "create confusion and mislead about a program that has no factual connection to federal spending," according to The Washington Post.

(Compiled by: Wang Jimin)

(Editor: Jiang Qiming)

(Source of the article: Compiled and published by New Sancai)