GAO’s 2025 High-Risk Report: Billions at Stake in Government Efficiency and Oversight
The Government Accountability Office (GAO) has released its latest High-Risk Series report, presented by Comptroller General Gene L. Dodaro before the House Committee on Oversight and Government Reform. This report, High-Risk Series: Heightened Attention Could Save Billions More and Improve Government Efficiency and Effectiveness, identifies 38 areas where government operations are particularly vulnerable to fraud, waste, abuse, or mismanagement, or require substantial transformation to enhance efficiency and effectiveness. The findings emphasize the financial risks, inefficiencies, and opportunities for cost savings if proper corrective measures are implemented.
A significant highlight of the 2025 High-Risk List is the addition of a new category: Improving the Delivery of Federal Disaster Assistance. As climate change intensifies, natural disasters such as wildfires and hurricanes are occurring more frequently and with greater intensity, creating unprecedented demands on federal agencies, particularly the Federal Emergency Management Agency (FEMA). The financial burden of disaster relief has escalated, with at least $448 billion appropriated from 2015 to 2024, along with an additional $110 billion allocated through the December 2024 Disaster Relief Supplemental Appropriations Act. The GAO emphasizes that the current federal approach to disaster recovery is fragmented, spread across more than 30 federal entities, and in urgent need of streamlined coordination. Without significant improvements in response capacity, survivor assistance processes, and workforce resilience, the government’s fiscal exposure will continue to grow, making disaster relief an increasingly unsustainable financial liability.
Beyond this newly designated high-risk area, the report evaluates the progress of existing high-risk programs. While ten areas showed improvement due to increased agency commitment and congressional oversight, three areas experienced declines. Most notably, defense procurement and financial management issues remain a persistent challenge. The Department of Defense (DOD) still struggles with cost overruns and delays in its weapons systems acquisitions, raising concerns about the effectiveness of its financial controls. Additionally, efforts to modernize information technology (IT) acquisitions and management across federal agencies have fallen short. Despite investments in IT modernization, agencies continue to rely on outdated systems that are vulnerable to cyber threats, raising alarms about national security risks.
One of the most concerning issues outlined in the report is improper payments across government programs. Since 2003, federal agencies have reported approximately $2.8 trillion in improper payments, including over $150 billion in each of the last seven years. The programs most affected include Medicare, Medicaid, unemployment insurance, and the Earned Income Tax Credit. The GAO warns that agencies need to strengthen financial oversight, enhance fraud detection systems, and conduct more timely audits to prevent further losses. For instance, the Centers for Medicare & Medicaid Services has been urged to accelerate audits of Medicare Advantage payments to recover billions lost to improper claims. The GAO also highlights gaps in tax revenue collection, estimating that the Internal Revenue Service (IRS) faces a gross tax gap of $696 billion for tax year 2022. Despite efforts to close this gap through enforcement actions, the IRS still projects a net tax gap of $606 billion, further straining federal resources.
Government procurement inefficiencies also remain a pressing issue. With an annual procurement budget exceeding $750 billion, federal agencies struggle with cost overruns and delays in acquiring critical resources. This is particularly evident in defense, energy, and healthcare programs. The GAO has called for more stringent oversight and the adoption of best practices in procurement planning to curb unnecessary expenditures. Another key concern is the federal government’s vast real estate holdings. Maintaining over 277,000 buildings costs more than $10.3 billion annually, and the deferred maintenance backlog has surged from $170 billion in 2017 to $370 billion in 2024. As telework and remote operations reshape government workplace needs, the GAO urges agencies to reassess property utilization and accelerate the disposal of underused assets.
The report also stresses the urgency of cybersecurity improvements. The federal government faces thousands of cyber threats daily, targeting critical infrastructure, defense systems, and public services. While progress has been made in strengthening cybersecurity policies, the GAO warns that federal agencies are not operating at a pace commensurate with the evolving threats. It calls for enhanced coordination between agencies, the private sector, and state and local governments to mitigate risks. The need for cybersecurity resilience extends to artificial intelligence (AI), which presents both opportunities and new vulnerabilities that require proactive management.
Public health security is another high-risk area demanding immediate attention. The GAO criticizes the Department of Health and Human Services (HHS) for its inadequate leadership in coordinating public health emergencies. Additionally, it highlights weaknesses in the Food and Drug Administration’s (FDA) ability to inspect foreign drug manufacturers, raising concerns about drug safety and persistent shortages of critical medications. In the healthcare sector, the Department of Veterans Affairs (VA) continues to struggle with modernizing its electronic health record (EHR) system. After multiple failed attempts since 2001, the VA’s latest EHR initiative is years behind schedule and billions of dollars over budget, underscoring the broader challenges of IT modernization across government agencies.
The report also highlights longstanding issues in federal financial management. The DOD remains the only major federal agency that has never achieved a clean audit opinion on its financial statements. While some progress has been made, systemic financial control weaknesses persist, making it difficult to track expenditures and prevent fraud. Meanwhile, the United States Postal Service (USPS) continues to experience financial instability, reporting losses of $16 billion over the past two years and carrying liabilities of $181 billion. The GAO warns that without structural reforms, USPS’s retiree benefits fund will be depleted by 2031, creating another financial crisis for the government.
The GAO’s 2025 High-Risk List serves as both a warning and a roadmap for reform. The report emphasizes that congressional oversight, leadership commitment, and interagency collaboration are essential to resolving these challenges. The findings highlight the need for immediate action to address government inefficiencies, prevent further financial losses, and improve service delivery for the American public. While past efforts have resulted in approximately $759 billion in financial benefits since 2006, the potential for additional savings remains substantial. As agencies work to implement GAO recommendations, continued vigilance and accountability will be crucial in ensuring that taxpayer dollars are spent effectively and that government programs achieve their intended outcomes.
This blog post is based on the GAO report High-Risk Series: Heightened Attention Could Save Billions More and Improve Government Efficiency and Effectiveness (GAO-25-108125), authored by Comptroller General Gene L. Dodaro. The information presented here is for general informational purposes only and does not constitute legal advice. While every effort has been made to ensure accuracy, no guarantees can be made regarding the completeness or applicability of the content. Readers should consult official government sources or legal professionals for specific guidance.