HUD Report Reveals Over $5 Billion in Potential Payment Errors

Dec 31, 2025, 2:58 AM

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The Department of Housing and Urban Development (HUD) has released its Fiscal Year 2025 Agency Financial Report (AFR), revealing potential payment errors exceeding $5 billion during the Biden administration. This report marks the first time HUD utilized advanced data analytics to scrutinize payments made under its rental assistance programs, uncovering significant issues related to improper payments and financial oversight.

HUD Secretary Scott Turner emphasized the severity of the findings, stating, "A massive abuse of taxpayer dollars not only occurred under President Biden's watch, but was effectively incentivized by his administration's failure to implement strong financial controls." He noted that the department is committed to investigating these results and holding accountable those responsible for the misuse of funds.

The report identified various categories of improper payments, including approximately $50 million in payments that did not match tenant records, $77 million paid to deceased tenants, and $250 million to recipients with incorrect Social Security numbers. Additionally, around $287 million was disbursed to individuals with excessively high rents. The majority of these improper payments were made to businesses that had not been validated to conduct business with the federal government, totaling about $5.2 billion.

In response to these findings, HUD plans to enhance its processes to ensure better tracking of how Public Housing Authorities (PHAs) and HUD-funded grantees utilize the funds they receive. This initiative aims to promote efficiency, transparency, and accountability at all levels of the department.

The issue of improper payments is not unique to the Biden administration. Previous administrations, including that of Donald Trump, have also faced challenges in addressing this problem. An independent report highlighted that over $200 million in Medicaid payments were made to deceased individuals from 2021 to 2022, indicating a persistent issue across various federal programs.

The Government Accountability Office (GAO) has estimated that total direct annual financial losses to the government from fraud range between $233 billion and $521 billion, based on data from fiscal years 2018 through 2022. This broad estimate underscores the systemic vulnerabilities within federal financial management, which can lead to significant losses due to fraud and improper payments.

As HUD moves forward, it is also looking to build on efforts initiated during the Trump administration to strengthen program integrity. Secretary Turner stated that the department is dedicated to ensuring that taxpayer-funded assistance effectively serves the vulnerable communities it was intended for.

The findings from HUD's AFR serve as a critical reminder of the importance of robust financial controls and oversight in federal programs. As the department continues to investigate and implement new processes, the focus will remain on safeguarding taxpayer dollars and enhancing the integrity of housing assistance programs.

In conclusion, the HUD report highlights a significant challenge in managing federal funds, with billions potentially lost to improper payments. The commitment to improving oversight and accountability is essential to restoring public trust and ensuring that assistance reaches those who need it most.

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