02/06/2023

Emergency Relief Funds: Significant Improvements Are Needed to Address Fraud and Improper Payments

U.S. Government Accountability Office

The federal government distributed funds quickly during the COVID-19 pandemic. This led to an increase in fraud and other "improper payments"—payments that shouldn't have been made or were made in the incorrect amount. The extent of fraud in COVID-relief programs is not yet known but our estimate suggests that one program, Unemployment Insurance, made over $60 billion in fraudulent payments.

We testified on contributing factors and our prior related recommendations to agencies and Congress. For example, we suggested that Congress reinstate requirements that agencies report annually on their efforts to prevent, detect, and respond to fraud.

What GAO Found

While fraud and accountability issues will continue to occur in COVID-19 relief programs, there is already ample evidence of widespread fraud, improper payments, and accountability deficiencies during the pandemic. For example, GAO found that from March 2020 through January 13, 2023, at least 1,044 individuals pleaded guilty to or were convicted at trial of federal charges of defrauding COVID-19 relief programs. This includes the Small Business Administration's (SBA) Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL) program, the Department of Labor's (DOL) Unemployment Insurance (UI) programs, and economic impact payments issued by the Department of the Treasury and the Internal Revenue Service.

Read more...