Federal Government Loses Up to $521 Billion to Fraud Annually

 

RealClearWire.com

It does include over $100 billion lost to unemployment insurance fraud and $200 billion in fraudulent business loans from the Small Business Administration during the pandemic.

The lowest estimate, $233 billion, is still larger than the 2022 budget of all but eight federal agencies.

Only $4.41 billion to $7.31 billion was reported as “confirmed fraud” each year with an official court ruling. The rest was settled out of court or, more likely, never recouped at all.

Some of the biggest risk factors for fraud are expanding government programs or adding new ones, allowing state governments to control payments, and relying on officials with limited training or experience, the GAO wrote.

The report does not necessarily predict how much will be lost to fraud in the future.

Background: The federal government arguably does a poor job of getting money back once it’s lost to fraud.

The Justice Department announced in April that it recovered only $1.4 billion of money stolen during the pandemic, less than 1% of the total amount. OpenTheBooks contributed to a report in the Washington Times detailing the process, explaining that tens of thousands of businesses on the Treasury’s “Do Not Pay” list received loans anyway.

Critical quote: The Office of Management and Budget said the GAO report was “misleading” and will “create confusion” because it relies on projections and estimates and not just hard data.

Even the GAO admitted “we cannot eliminate the possibility that the actual amount of fraud could be outside of the range of our estimate.”

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com