The larger the budget, the greater the potential risk for waste, fraud, and abuse. And with $6.27 trillion in spending in fiscal 2022 – nearly double the combined expenditure of the top 10 Fortune 500 companies the same year – the U.S. government’s budget is without equal. But despite rigorous controls and oversight mechanisms, federal agencies report tens of billions of dollars in monetary losses each year through overpayments made under their respective programs.
In its annual improper payments report, the Office of Management and Budget found that federal agencies wasted nearly $200 billion on overpayments in fiscal 2022 – more than the combined GDP of Alaska, Vermont, and Wyoming.
Of the 18 federal agencies covered in the OMB’s 2022 report, 16 reported some level of overspending, which can happen in any number of ways – including overpaying recipients of government benefits such as Social Security. And based on the numbers, some agencies are far more likely to make improper payments than others.
Using data from the OMB, 24/7 Wall St. identified the government agencies wasting the most taxpayer money. The 16 federal agencies on this list are ranked by the dollar value of overpayments made in the government’s 2022 fiscal year. All supplemental data in this story also came from the OMB report. Among these agencies, overpayments range from less than $150,000 to nearly $130 billion.
While some of this money is recoverable, taxpayers are ultimately on the hook for much of that wasted spending. The agencies on this list recovered a reported $22.8 billion in improperly made payments in fiscal 2022, some share of which was paid in error in a previous year. Still, this amounts to only about 11% of the total overpayments made in 2022.
Notably, government agencies themselves are not always directly responsible for overpayments. In nine of the 16 agencies on this list, 50% or more of the total value of overpayments was considered to have been outside of agency control. A small share of these cases are attributable to fraud. (Here is a look at the biggest financial frauds and scandals of the 21st century.)
A November 2022 press release issued by the White House explained some of the factors that contributed to wasted taxpayer dollars. These include a backlog of unemployment insurance claims in the wake of the pandemic and problems related to aging IT infrastructure and an understaffed and underfunded Employment and Training Administration, an agency within the Department of Labor. (Here is a look at how each state recovered from pandemic-era unemployment.)
Here are the government agencies wasting the most taxpayer money.
16. Agency for International Development
> Overpayments made in fiscal 2022: $149,830 (0.002% of agency spending)
> Responsibility for overpayments in fiscal 2022: 100% within agency control
> Overpayments recovered in fiscal 2022: $502.0 million
> Total agency spending in fiscal 2022: $7.0 billion
> Sub-agencies/programs overspending in fiscal 2022 incl. include: Operating expenses, administration and oversight
15. Department of Commerce
> Overpayments made in fiscal 2022: $3.7 million (5.3% of agency spending)
> Responsibility for overpayments in fiscal 2022: 100% within agency control
> Overpayments recovered in fiscal 2022: $2.6 million
> Total agency spending in fiscal 2022: $70.1 million
> Sub-agencies/programs overspending in fiscal 2022 incl.: Economic Development Administration
14. Corporation for National and Community Service
> Overpayments made in fiscal 2022: $10.1 million (2.3% of agency spending)
> Responsibility for overpayments in fiscal 2022: 100% outside agency control
> Overpayments recovered in fiscal 2022: $0
> Total agency spending in fiscal 2022: $430.0 million
> Sub-agencies/programs overspending in fiscal 2022 incl.: AmeriCorps, Foster Grandparent Program, Senior Companion Program
13. Department of Homeland Security
> Overpayments made in fiscal 2022: $52.9 million (0.9% of agency spending)
> Responsibility for overpayments in fiscal 2022: 100% within agency control
> Overpayments recovered in fiscal 2022: $144.2 million
> Total agency spending in fiscal 2022: $5.7 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: FEMA, U.S. Coast Guard
12. Federal Communications Commission
> Overpayments made in fiscal 2022: $117.8 million (4.3% of agency spending)
> Responsibility for overpayments in fiscal 2022: 20.6% within agency control; 79.4% outside agency control
> Overpayments recovered in fiscal 2022: $58.3 million
> Total agency spending in fiscal 2022: $2.8 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Universal Service Fund
11. Department of Transportation
> Overpayments made in fiscal 2022: $239.4 million (0.4% of agency spending)
> Responsibility for overpayments in fiscal 2022: 100% outside agency control
> Overpayments recovered in fiscal 2022: $7.7 million
> Total agency spending in fiscal 2022: $61.6 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Federal Transit Administration, Federal Highway Administration
10. Office of Personnel Management
> Overpayments made in fiscal 2022: $244.7 million (0.3% of agency spending)
> Responsibility for overpayments in fiscal 2022: 100% within agency control
> Overpayments recovered in fiscal 2022: $280.2 million
> Total agency spending in fiscal 2022: $87.9 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Federal Retirement Services
9. Department of Education
> Overpayments made in fiscal 2022: $368.1 million (0.2% of agency spending)
> Responsibility for overpayments in fiscal 2022: 56.7% within agency control; 43.3% outside agency control
> Overpayments recovered in fiscal 2022: $357.7 million
> Total agency spending in fiscal 2022: $186.1 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Federal Pell Grant Program, Title I grans, special education grants
8. Department of Agriculture
> Overpayments made in fiscal 2022: $638.6 million (0.7% of agency spending)
> Responsibility for overpayments in fiscal 2022: 49.3% within agency control; 50.7% outside agency control
> Overpayments recovered in fiscal 2022: $581.2 million
> Total agency spending in fiscal 2022: $86.2 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Risk Management Agency, Commodity Credit Corporation, Food and Nutrition Service
7. Department of Defense
> Overpayments made in fiscal 2022: $664.4 million (0.1% of agency spending)
> Responsibility for overpayments in fiscal 2022: 50.5% within agency control; 49.5% outside agency control
> Overpayments recovered in fiscal 2022: $1.4 billion
> Total agency spending in fiscal 2022: $616.9 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Military retirement, U.S. Army, Navy, and Air Force
6. Department of Veterans Affairs
> Overpayments made in fiscal 2022: $1.4 billion (4.4% of agency spending)
> Responsibility for overpayments in fiscal 2022: 99.2% within agency control; 0.8% outside agency control
> Overpayments recovered in fiscal 2022: $1.1 billion
> Total agency spending in fiscal 2022: $31.7 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Community Care, pensions, medical contracts
5. Social Security Administration
> Overpayments made in fiscal 2022: $6.0 billion (0.5% of agency spending)
> Responsibility for overpayments in fiscal 2022: 29.8% within agency control; 70.2% outside agency control
> Overpayments recovered in fiscal 2022: $4.3 billion
> Total agency spending in fiscal 2022: $1.2 trillion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Supplemental Security Income, Old-Age, Survivors, and Disability Insurance
4. Small Business Administration
> Overpayments made in fiscal 2022: $16.4 billion (1.8% of agency spending)
> Responsibility for overpayments in fiscal 2022: 20.7% within agency control; 79.3% outside agency control
> Overpayments recovered in fiscal 2022: $270,000
> Total agency spending in fiscal 2022: $888.4 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Paycheck Protection Loan Program, disaster assistance loans
3. Department of Labor
> Overpayments made in fiscal 2022: $17.9 billion (20.3% of agency spending)
> Responsibility for overpayments in fiscal 2022: 39.8% within agency control; 60.2% outside agency control
> Overpayments recovered in fiscal 2022: $1.1 billion
> Total agency spending in fiscal 2022: $88.2 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Employment and Training Administration, Office of Workers’ Compensation
2. Treasury Department
> Overpayments made in fiscal 2022: $26.0 billion (26.5% of agency spending)
> Responsibility for overpayments in fiscal 2022: 100% outside agency control
> Overpayments recovered in fiscal 2022: $97.9 million
> Total agency spending in fiscal 2022: $98.1 billion
> Sub-agencies/programs overspending in fiscal 2022 incl.: IRS
1. Department of Health and Human Services
> Overpayments made in fiscal 2022: $129.9 billion (8.8% of agency spending)
> Responsibility for overpayments in fiscal 2022: 0.5% within agency control; 99.5% outside agency control
> Overpayments recovered in fiscal 2022: $12.9 billion
> Total agency spending in fiscal 2022: $1.5 trillion
> Sub-agencies/programs overspending in fiscal 2022 incl.: Centers for Medicare and Medicaid Services, Health Resources and Services Administration, Administration for Children and Families
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