The federal government loses an estimated $233 billion to $521 billion annually due to fraud, according to the Government Accountability Office (GAO). Since 2003, improper payments have totaled $2.7 trillion, underscoring persistent challenges in government oversight, waste reduction, and financial accountability.
The GAO reiterated that these estimates are based on years of research and that many of its recommendations to strengthen fraud risk management remain unimplemented. The agency has warned that incomplete fraud data, weak internal controls, and limited agency oversight contribute to these losses.
However, a recent GAO report that includes two decades of data does not mention diversity, equity, and inclusion initiatives, the U.S. Agency for International Development (USAID), the Consumer Financial Protection Bureau (CFPB), or many of the agencies that the Department of Government Efficiency (DOGE) has targeted under the Trump administration. This raises questions about whether DOGE’s cost-cutting efforts are focused on eliminating financial waste or removing oversight of agencies that regulate industries connected to Musk’s business interests.
Meanwhile, Donald Trump became the first sitting U.S. president to attend the Super Bowl, a taxpayer-funded trip that critics argue contradicts his administration’s calls for fiscal discipline.
Musk’s Financial Ties to the Federal Government
Musk’s role in DOGE is particularly significant given the billions of dollars in federal contracts his companies receive. Over the past decade:
- SpaceX has received over $13 billion from NASA and over $5 billion from the Department of Defense, ABC News reports.
- In the 2024 fiscal year, SpaceX’s federal contracts reached $3.7 billion.
- This month, The Lever says a supplemental contract added $7.5 million to SpaceX’s ongoing NASA work.
- A December State Department procurement forecast said Tesla was set to receive a $400 million contract to build armored electric vehicles, but after Drop Site broke the story this week, officials quietly removed Tesla’s name. Tesla’s U.S. government contracts over the last decade totaled roughly $700,000.
DOGE’s Actions: What It Targets vs. What the GAO Identified
The GAO’s 2024 report, “PAYMENT INTEGRITY: Significant Improvements Are Needed to Address Improper Payments and Fraud,” does not mention USAID, the CFPB, the Department of Education, or the Environmental Protection Agency (EPA)—all of which have been primary targets of DOGE.
Even USAID, a major DOGE and Musk focus, was not identified by the GAO as having improper payments exceeding $5 billion or an improper payment rate of over 10% for fiscal year 2023.
By contrast, the GAO identified multiple agencies that exceeded those thresholds that year, including:
- The Department of Health and Human Services (HHS) oversees Medicare and Medicaid. HHS reported $50 billion in improper Medicaid payments, $31 billion in Medicare Fee-for-Service, and $17 billion in Medicare Advantage.
- The Department of Labor reported $44 billion in improper payments for Federal Pandemic Unemployment Assistance.
- The Department of the Treasury, where the Earned Income Tax Credit accounted for $22 billion in improper payments.
- The Small Business Administration, where the Paycheck Protection Program Loan Forgiveness, had $19 billion in improper payments.
While DOGE has taken action in some of these areas, it has also prioritized agencies that the GAO did not flag for significant improper payments.
DOGE’s Engagement in GAO-Flagged Agencies
DOGE has engaged with what the GAO considers high-risk agencies, according to Intelligencer, like HHS and the Department of Labor:
- DOGE gained access to HHS’s payment and contracting systems, which handle hundreds of billions of dollars in healthcare payments.
- DOGE representatives visited the CDC and the Centers for Medicare & Medicaid Services (CMS) to investigate fraud and waste, later canceling millions of dollars in HHS contracts.
- DOGE met with the Department of Labor, prompting labor unions to file a lawsuit attempting to block DOGE from accessing sensitive data, a request denied by a federal judge.
- DOGE accessed the Treasury Department’s payment system, which stores financial data on most Americans and reportedly canceled Treasury’s DEI contracts and New York Times subscriptions.
Trump’s Firing of Inspectors General Investigating Musk’s Companies
Since taking office on Jan. 20, The Lever says Trump has fired inspectors general from at least five federal agencies that were investigating Musk’s businesses:
- Department of Agriculture – The inspector general investigating Neuralink for alleged animal abuse was removed.
- Department of Defense – The inspector general investigating SpaceX for undisclosed foreign contacts was dismissed.
- Department of Transportation – The inspector general overseeing Tesla’s safety investigations was terminated.
- Environmental Protection Agency – The inspector general who had previously settled lawsuits with Tesla over Clean Air Act violations was ousted.
- Department of Labor—The inspector general who was overseeing multiple open investigations into Musk’s companies for labor and workplace safety violations was removed.
Beyond firing investigators, the New York Times reports that Trump and Musk’s allies worked to gut agencies that posed regulatory risks. Shortly after Musk’s X launched a digital payment system, DOGE targeted the CFPB—the agency that regulates peer-to-peer payment systems, according to The Lever. Musk posted “RIP CFPB” on X, and soon after, the agency’s website went down amid an internal records breach. Lawsuits have since been filed to block the agency’s dismantling.
DOGE moved to cut USAID’s funding, aligning with Musk’s public criticism of foreign aid. This came after USAID launched an investigation into Starlink’s role in Ukraine. Critics argue that weakening USAID undermines national security.
Musk’s Personal Stake: The Money Trail and Transparency Issues
Musk spent at least $288 million, according to the Washington Post, to support Trump’s 2024 election campaign, making him one of the largest individual donors. As an unpaid “special government employee,” the New York Times reports that he is exempt from public financial disclosure requirements.
Trump designated DOGE’s cost-cutting initiative exempt from public records laws for about a decade, meaning Musk’s financial disclosures will not be made public during this period.
White House and GAO Response—or Lack Thereof
The White House did not respond to two emails seeking comment on DOGE’s activities.
In response to inquiries, the GAO stated that it has not completed any reviews of DOGE’s actions and, therefore, could not comment. However, it confirmed that it had received congressional requests related to DOGE, including one concerning access to federal IT systems. The agency has accepted the request and begun staffing the review, though it could not provide a timeline for its findings.
Fraud and Improper Payments: Key Concepts and Challenges
The GAO says improper payments are payments that should not have been made or were made in the wrong amount, whether due to fraud, clerical errors, weak oversight, or missing documentation. The GAO estimates that overpayments made up 74% of the $236 billion in improper payments for fiscal year 2023, while other cases involved underpayments, unknown payments, and technically improper payments that failed to meet legal requirements.
Fraud is a subset of improper payments, but most result from administrative errors rather than intentional deception. The GAO says limited fraud-related data, inconsistent reporting, and opaque ownership structures are key obstacles to detection.
DOGE and the Department of Defense: Fraud, Oversight, and Conflicts of Interest
The Department of Defense (DOD) remains one of the largest sources of financial waste and fraud risk, according to the GAO. The watchdog agency says that despite handling 60% of all federal contracting, the DOD lacks a clear fraud detection strategy and cannot track billions in spending. The Trump administration has signaled that DOGE will play a role in addressing waste at the Pentagon, but concerns over conflicts of interest, transparency, and data security remain.
Trump Administration’s Position on DOGE and DOD
President Trump established DOGE on Jan. 20 with the express mission of reducing federal spending, stating that he had instructed Elon Musk and DOGE to investigate spending at the Pentagon. White House Press Secretary Karoline Leavitt has said Musk would recuse himself from any contracts overseen by DOGE where a conflict of interest exists.
Defense Secretary Pete Hegseth, speaking from Germany, this week confirmed that DOGE would be involved in reviewing waste, redundancies, and spending inefficiencies at the DOD, according to Defense Scoop. He stated that he remains in close contact with Musk and that he would host Musk and his DOGE team at the Pentagon to address bureaucratic waste.
Although Trump has dismissed concerns over DOGE’s access to sensitive federal data, CBS reports that critics—including Sen. Elizabeth Warren, D-Mass.—have warned of potential risks. In a letter to Treasury Secretary Scott Bessent, Warren stated that DOGE’s lack of oversight could lead to critical errors that might trigger financial instability.
DOD Fraud Risk and Weak Oversight
A February 2024 GAO report found that the DOD lacks a formal process for analyzing past fraud cases or using data analytics to detect fraudulent transactions. Between 2015 and 2021, investigators closed more than 1,100 procurement fraud cases, uncovering schemes involving bribery, false claims, and product substitution, yet the DOD has failed to implement stronger fraud risk management strategies.
The GAO recommended incorporating data analytics into fraud detection, but the DOD refused to revise its Fraud Risk Management Strategy, arguing that current practices were sufficient.
Financial Mismanagement and Lack of Accountability
The GAO has classified the DOD’s financial management as high-risk since 1995, citing systemic failures in accounting, oversight, and transparency. The agency has never passed a full financial audit and remains unable to track billions in spending and physical assets.
In FY 2021 and FY 2022, the DOD financial audits uncovered 28 material weaknesses, reinforcing concerns about accounting failures and potential waste. While some reforms have saved nearly $4 billion, the GAO warns that major gaps in financial accountability remain.
Weapon Systems Acquisition and Business Modernization
The DOD’s weapon systems acquisition program, projected to cost $1.9 trillion, has been plagued by inefficiencies, delays, and cybersecurity vulnerabilities. Despite efforts to improve, 163 GAO recommendations on defense acquisitions remain unaddressed.
Similarly, the DOD’s business modernization efforts have stalled, with no clear timeline for completing an action plan or updating its enterprise architecture.
DOGE’s Role in DOD and Concerns Over Conflicts of Interest
Hegseth has outlined several areas where DOGE would focus on the Pentagon’s spending, including weapons acquisitions and staffing redundancies. He stated that DOGE’s efforts would not compromise U.S. operational capabilities, though critics worry about Musk’s role in shaping Pentagon cost-cutting policies while his companies continue to receive lucrative federal contracts.
