A Detailed Record of Federal Audit Failures
The receipts behind 'Open the Books': 28 consecutive disclaimers on the U.S. consolidated financial statements (FY 1997–FY 2025), the Department of Defense's eight failed full-scope audits, ~$2.8 trillion in cumulative improper payments, and $73–$162.7 trillion in off-balance-sheet obligations — every figure sourced.
As of March 2026. All data sourced from GAO audit reports, Treasury Financial Reports, the Congressional Research Service, and agency financial statements.
Executive Summary. The Government Accountability Office has issued a disclaimer of opinion on the consolidated financial statements of the United States government for twenty-eight consecutive fiscal years (FY 1997–FY 2025). The same three impediments have been cited every year. The Department of Defense has never received a clean audit opinion in its history and has now failed eight consecutive full-scope audits. Cumulative reported improper payments since FY 2003 exceed $2.8 trillion, representing only a fraction of actual improper payments because the reported total covers just 68 programs across 16 agencies. The government’s own estimates of annual fraud losses range from $233 billion to $521 billion. Off-balance-sheet obligations for Social Security and Medicare exceed $73 trillion on a 75-year present-value basis, with the broadest infinite-horizon estimate reaching $162.7 trillion (Table 4). Only 15 of 24 CFO Act agencies received clean audit opinions in FY 2025, a deterioration from 18 the prior year.
Table 1. Consolidated Financial Statement Audit Results: FY 1997–FY 2025
| Fiscal Year | GAO Opinion | Key Findings |
|---|---|---|
| FY 1997 | Disclaimer | First consolidated statements prepared under GMRA 1994. GAO unable to express opinion. |
| FY 1998–2005 | Disclaimer (8 more consecutive) | Same three impediments cited every year: DOD, intragovernmental transactions, statement preparation. |
| FY 2006 | Disclaimer | Comptroller General Walker warns fiscal exposures total ~$50 trillion. Statement of Social Insurance added as principal statement. |
| FY 2007–2017 | Disclaimer (11 more consecutive) | DOD still unauditable. Improper payments consistently exceed $100B/year. Information security weaknesses persistent. |
| FY 2018 | Disclaimer | DOD undergoes first-ever full financial statement audit; receives disclaimer. 20 material weaknesses identified. $2.7T in DOD assets. |
| FY 2019 | Disclaimer | $42.2T Medicare unfunded obligation (71% of total SOSI). |
| FY 2020 | Disclaimer | COVID-19 pandemic spending begins. Improper payments surge. 21 CFO Act agencies receive clean opinions individually; consolidated still disclaimed. |
| FY 2021 | Disclaimer | Improper payments reach $281B (pandemic peak). DOD: 25 material weaknesses. |
| FY 2022 | Disclaimer | DOD reports 61% discrepancy rate in $3.5T in assets. GAO estimates fraud losses at $233–$521B annually (FY18–22 data). |
| FY 2023 | Disclaimer | Improper payments: $236B. Cumulative since FY2003: ~$2.7T. Marine Corps achieves first-ever clean opinion for a military service. |
| FY 2024 | Disclaimer (27th consecutive) | 18 of 24 CFO Act agencies receive clean individual opinions; 6 do not. DOD: 28 material weaknesses, 7th consecutive disclaimer. $4.1T in DOD assets, $1T+ in asset discrepancies. Improper payments: $162B. |
| FY 2025 | Disclaimer (28th consecutive) | 15 of 24 CFO Act agencies receive clean opinions (down from 18). DOD: 8th consecutive disclaimer, 26 material weaknesses. Pentagon cannot verify $1T Fund Balance with Treasury. Improper payments: $186B. Unfunded social insurance obligations: $60.4T (68% from Medicare). Government net costs: $7.3T. |
Table 2. Department of Defense Full-Scope Audit Record: FY 2018–FY 2025
The Department of Defense is responsible for approximately half of federal discretionary spending and 82% of the federal government’s reported physical assets. It is the only major federal agency to have never received a clean audit opinion. Congress has mandated a clean opinion by December 31, 2028 (NDAA FY2024, Section 1005).
| Fiscal Year | Opinion | Material Weaknesses | Details |
|---|---|---|---|
| FY 2018 | Disclaimer | 20 | First full audit. $2.7T in assets. 1,300+ auditors. |
| FY 2019 | Disclaimer | 24 | Expanded testing scope; new weaknesses identified. |
| FY 2020 | Disclaimer | 25 | Pandemic disruptions compound existing challenges. |
| FY 2021 | Disclaimer | 28 | Material weaknesses plateau at 28; same categories. |
| FY 2022 | Disclaimer | 28 | 61% discrepancy rate across $3.5T in assets. 1,600+ auditors. |
| FY 2023 | Disclaimer | 28 | Marine Corps achieves first-ever clean opinion for a military service. Army, Navy, Air Force still disclaimed. |
| FY 2024 | Disclaimer | 28 | $4.1T assets, $4.3T liabilities. 1,700+ auditors. $2.1T in assets (50.3%) directly affected by material weaknesses. 28 separate entity audits conducted. |
| FY 2025 | Disclaimer | 26 | 8th consecutive disclaimer. Cannot verify $1T Fund Balance with Treasury. F-35 Global Spares Pool assets unverifiable. Mandated clean opinion by Dec 2028. |
Table 3. Major Improper Payment Programs
Improper payments are those that should not have been made or were made in an incorrect amount. The figures below represent only programs that agencies have estimated; the actual total is unknown and higher because many susceptible programs are excluded from reporting. GAO’s independent estimate of total annual federal fraud losses is $233–$521 billion (based on FY 2018–2022 data).
| Program Area | Estimated Amount | Reporting Year | Notes |
|---|---|---|---|
| Medicare (FFS, Part C, Part D) | $56.7B | FY 2025 | 6.55% FFS rate; Part C errors largely from unsupported diagnosis data |
| Medicaid | $50.8B | FY 2025 | $24B increase from FY2024; eligibility redetermination errors post-COVID unwinding |
| Earned Income Tax Credit | ~$22B | FY 2024 | Error rate above 23% for 20+ consecutive years |
| Supplemental Nutrition (SNAP) | ~$11B | FY 2024 | Eligibility verification and documentation errors |
| Unemployment Insurance | Varies | FY 2024 | Higher error rate in FY2023 than in FY2004; pandemic-era fraud endemic |
| Cumulative (FY 2003–present) | ~$2.8 Trillion | All years | Represents only 68 programs across 16 agencies; actual total unknown and higher |
Table 4. Off-Balance-Sheet Obligations and Unrecorded Liabilities
Under FASAB standards, the following obligations are disclosed in supplementary schedules but not recognized as liabilities on the face of the federal balance sheet. Under IFRS (IAS 37) or standard U.S. GAAP as applied to non-governmental entities, many of these would require recognition.
| Obligation Category | Reported Amount | Source/Year | Notes |
|---|---|---|---|
| National Debt (on-balance-sheet) | $37.6 trillion | Treasury, FY2025 | Recorded liability; the only number most citizens see |
| Social Security unfunded (75-year) | ~$25–28 trillion | OASDI Trustees, 2025 | OASI trust fund insolvency projected 2033; 21% automatic benefit cut at depletion |
| Medicare unfunded (75-year) | ~$48–52 trillion | Medicare Trustees, 2025 | HI trust fund insolvency projected 2036. 68% of total SOSI present value of excess expenditures. |
| Combined unfunded obligation (75-yr) | $73.2 trillion | Financial Report of US Govt | Medicare + Social Security = 100% of unfunded obligation (Cato analysis of 2023 data) |
| Federal employee/veteran benefits | $15.0 trillion | Balance sheet, FY2024 | Recorded on balance sheet but distinct from social insurance |
| Infinite-horizon fiscal imbalance | $162.7 trillion | Penn Wharton Budget Model | All current and future generations; broadest measure |
| Interest on debt (annual) | $1.2 trillion | Treasury, FY2025 | Nearly doubled from $500B in FY2022 to $1.2T in FY2025; now exceeds defense spending |
Note on measures: The $60.4 trillion figure reported for FY 2025 (Table 1) is the 75-year open-group unfunded obligation from the FY 2025 Statement of Social Insurance. The $73.2 trillion combined figure above derives from the prior-year Financial Report and analysis of 2023 data. The two differ in valuation date and scope, not in substance: each measures the present-value gap between scheduled benefits and dedicated revenues. The Penn Wharton infinite-horizon figure is broader still, extending the projection beyond the 75-year window to all current and future generations.
Table 5. CFO Act Agency Audit Opinions — FY 2025 Problem Agencies
Of the 24 agencies covered by the Chief Financial Officers Act of 1990, only 15 received clean (unmodified) audit opinions on their FY 2025 financial statements — a deterioration from 18 in FY 2024 and from over 20 consistently between FY 2011–2020. The following agencies had non-clean opinions or other audit failures:
| Agency | FY 2025 Opinion | Notes |
|---|---|---|
| Department of Defense | Disclaimer | 8th consecutive disclaimer. 26 material weaknesses. Never received a clean opinion. Responsible for ~82% of federal physical assets. |
| Security Assistance Accounts | Disclaimer | Arms transfers and military aid accounts; persistent recordkeeping deficiencies. |
| Small Business Administration | Disclaimer/Issues | COVID-era EIDL fraud; three material weaknesses recently addressed but legacy issues persist. |
| Dept. of the Treasury (General Fund) | Not audited (FY2025) | General Fund schedules not audited to allow remediation of FY2024 disclaimer. |
| Department of Labor | Not issued/Qualified (FY2024) | FY2025 statements not issued by report date; FY2024 received qualified opinion. Cannot support unemployment insurance estimates. |
| Department of Energy | Qualified (FY2024) | Specific reporting areas lacked sufficient evidence. |
| HHS (Social Insurance stmts) | Disclaimer (SOSI/SCSIA) | Clean on main statements; disclaimer on Statements of Social Insurance due to Medicare projection uncertainties. $60.4T in excess expenditures. |
| Railroad Retirement Board | Clean (FY2025) / Disclaimer (FY2024) | Improvement from prior year but illustrates volatility. |
Additional government-wide material weaknesses (FY 2025): 13 of 24 CFO Act agencies reported material weaknesses or significant deficiencies in information system controls. The government remains unable to (1) determine the full extent of improper payments and fraud, and (2) identify and resolve information security control deficiencies across agencies.