GAO Flags Fraud Risks in 20 State-Administered Federal Programs With $1.2 Trillion in FY 2025 Funding
The Government Accountability Office has identified recurring fraud risks and oversight challenges across 20 large federally funded programs administered by states and other government entities, programs that received an estimated $1.2 trillion in federal funding during fiscal year 2025.
In a report published July 23, 2026, GAO said the programs represented nearly 90% of federal obligations among qualifying state-administered programs. The review included major public programs such as Medicaid, the Supplemental Nutrition Assistance Program, commonly known as SNAP, and disaster assistance.
The report does not say that $1.2 trillion was lost or improperly spent. It also does not provide one nationwide estimate of confirmed fraud across the 20 programs. Instead, GAO examined where fraud risks may arise, how programs are controlled and what oversight practices could help federal agencies and Congress better protect public funds.
What GAO reviewed
GAO used data from USAspending.gov to select the programs for review. The selected programs were federally funded but administered by states or other government entities, placing significant responsibility for distribution and oversight outside Washington.
The review drew on federal laws and regulations, federal agency documents, inspector-general reports, state audit reports and fraud cases adjudicated through the Justice Department. GAO used those materials to assess fraud risks, identify recurring risk factors and examine leading practices for internal controls.
That approach gives the report a cross-program view rather than focusing on a single agency or state. It also places programs with very different purposes in the same oversight framework: health coverage through Medicaid, food assistance through SNAP and aid connected to disasters.
Why the findings matter
Federal dollars often reach residents through programs that are operated, in whole or in part, by states and other government entities. The report therefore highlights a practical accountability question: how federal agencies can make sure money is protected after it moves beyond direct federal administration.
For the public, the programs reviewed touch health care, food assistance and disaster response. GAO’s findings do not announce a change to eligibility, benefits or access in any of those programs. Rather, they describe risks and controls that can affect how agencies and administrators verify payments, detect suspicious activity and respond to potential misuse.
The scale of the programs is central to the report. The estimated $1.2 trillion was the amount directed to the selected programs in fiscal year 2025, not an estimate of fraud. Because those programs accounted for nearly 90% of relevant federal obligations, GAO’s assessment provides Congress and federal agencies with a broad picture of oversight practices across a large share of state-administered federal spending.
What happens next
GAO’s report identifies roles for Congress and federal agencies in improving oversight. It also sets out fraud-risk factors and leading practices that can be used when assessing controls across the programs.
The report itself does not establish a single implementation deadline in the material released with the source packet, and it does not announce a new enforcement action against a particular state or program. The next known step is therefore institutional: Congress and the responsible federal agencies can use the assessment, along with federal and state audit work, to evaluate whether existing safeguards address the risks GAO describes.
The Council of the Inspectors General on Integrity and Efficiency’s federal reports directory also provides access to contemporaneous inspector-general audits and evaluations. Those records offer additional oversight context, but GAO’s July 23 report is the source of the cross-program findings and the $1.2 trillion estimate.
Sources
- Combating Fraud: Managing Risks in Federally Funded, State-Administered Programs, U.S. Government Accountability Office
- Federal Reports, Council of the Inspectors General on Integrity and Efficiency
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