Foundation for Government Accountability reports $521 billion lost to federal fraud each year

The Foundation for Government Accountability released a report on September 21, 2026 estimating that federal taxpayers lose $521 billion a year to fraud and improper payments, roughly seven percent of total federal spending.

The figure underscores a massive gap in oversight, as the study explains that only 64 of the more than 2,200 federal payment programs are examined annually for improper payments.

Senior research fellow Liesel Crocker told The Center Square, “Fraud against federal programs now runs about $521 billion a year, or seven percent of everything Washington spends.” She added, “And that’s just the fraud we know about. Of more than 2,200 federal payment programs, only 64 are reviewed for improper payments each year.”

The report identifies Medicaid, food stamps, Medicare, the Earned Income Tax Credit and a pandemic grant for concert venues as the programs where fraud is most concentrated, noting that “fraud shows up where the checks are easiest to get.”

State-level resistance compounds the problem. According to the study, 21 states are refusing to cooperate with federal efforts to vet their food‑stamp programs, while 29 states are cooperating and discovering ineligible enrollees and fraudulent benefit collections.

More than 8,000 fraud cases are being prosecuted by attorneys general across the country, which the report describes as only a small fraction of the total fraud occurring.

The Foundation applauds President Donald Trump’s “War on Fraud” and other anti‑fraud measures, urging Congress and states to build on those efforts to save taxpayers billions of dollars.

Future oversight actions will likely focus on expanding reviews of payment programs, improving data sharing between state and federal agencies, and strengthening enforcement of identified fraud cases.