GAO Report on Foreign Assistance Fraud, Waste, and Abuse Risks
Summary
The GAO released a report highlighting significant risks of fraud, waste, and abuse in U.S. foreign assistance programs. The report identifies systematic weaknesses in agency management of these risks and provides recommendations for improvement, noting that federal agencies still need to address some previously made recommendations.
What changed
The Government Accountability Office (GAO) has published a report, GAO-26-108945, detailing substantial risks of fraud, waste, and abuse within U.S. foreign assistance programs. The report, based on testimony before the House Subcommittee on Oversight and Intelligence and several prior GAO studies, identifies specific instances of diversion of aid and systematic weaknesses in agency processes. These weaknesses include a lack of fraud awareness training, inadequate screening and vetting of international partners, and insufficient internal policies for risk management, as seen with the U.S. African Development Foundation (USADF) where its Director of Financial Management was criminally charged.
Regulated entities and government agencies involved in foreign assistance should review the GAO's findings and recommendations to strengthen their fraud risk management practices. While some agencies have addressed prior recommendations, others still require attention. The report emphasizes the need for improved oversight, training, and vetting processes to mitigate vulnerabilities. Although no specific compliance deadline is mentioned, agencies are urged to implement the GAO's suggested improvements to prevent financial losses and ensure the effective delivery of aid.
What to do next
- Review GAO report GAO-26-108945 for identified fraud, waste, and abuse risks in foreign assistance.
- Assess current agency processes for managing fraud risks in foreign assistance programs.
- Implement recommendations for improved training, screening, vetting, and internal policies as outlined in the report.
Penalties
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Source document (simplified)
GAO-26-108945 Published: Mar 17, 2026. Publicly Released: Mar 17, 2026.
Fast Facts
Foreign Assistance: Opportunities Exist for Agencies to Improve Their Management of Fraud, Waste, and Abuse Risks
We testified on fraud risk management in foreign assistance before the House Subcommittee on Oversight and Intelligence.
This testimony is based on several GAO reports, including:
Foreign Assistance: USAID Should Strengthen Risk Management in Conflict Zone
Ukraine: State and USAID Should Improve Processes for Ensuring Partners Can Perform Required Work
U.S. African Development Foundation: Strategic Approach Needed to Mitigate Fraud Risks
We’ve made recommendations and shared lessons learned related to managing fraud risk in foreign aid. Federal agencies have addressed some of our recommendations but still need to address others.
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Highlights
What GAO Found
No area of the federal government is immune to fraud, waste, or abuse. GAO estimates that the federal government loses between $233 billion and $521 billion annually to fraud, based on 2018-2022 data. Delivering foreign assistance can involve specific challenges that increase fraud, waste and abuse risks, such as the presence of conflict in a country and the urgency of providing life-saving aid. GAO’s work in this area has highlighted several instances of actual and potential fraud, waste, and abuse in foreign assistance in countries such as Somalia, Afghanistan, and Mexico. For example, GAO reported on a 2023 United Nations assessment in Somalia that found widespread and systemic diversion of aid, primarily cash assistance. As part of this diversion, beneficiaries reported being required or coerced into paying a significant portion of their aid to those managing the camps where the assistance was distributed, or others.
Fraud, Waste, and Abuse Definitions and Examples
GAO’s work has identified useful practices and controls in place to manage fraud risks at some agencies. For example, U.S. Agency for International Development’s (USAID) Bureau for Humanitarian Affairs tracked all reported allegations, including fraud, across its awards and identified trends to support its oversight efforts. The Department of State and USAID also maintained processes for reviewing past performance of potential prime partners.
However, GAO also identified systematic weaknesses in agencies’ efforts to manage fraud and other risks. For example, State and USAID did not require fraud awareness training, limiting assurance that their staff could identify fraud risks. State and USAID also had weaknesses in their screening and vetting of international organizations and oversight of subawardees, which increased vulnerabilities to risks, such as fraud. Further, the U.S. African Development Foundation (USADF) lacked internal policies and processes to manage fraud and other risks. Treasury officials that supported USADF contracting told GAO that USADF procurement officials also engaged in questionable practices when making foreign assistance awards, such as steering contracts to former USADF contractual employees. USADF’s Director of Financial Management was later criminally charged by the Department of Justice.
Why GAO Did This Study
Foreign assistance is used to support U.S. foreign policy by providing resources to countries that policymakers have deemed to be strategically important, countries in conflict, and populations in need. The complex environments in which U.S. foreign assistance is often delivered have inherent risks for fraud, waste, and abuse. These risks must be recognized and better managed to fulfill programs and protect taxpayer dollars.
Fraud prevention is key as attempting to prosecute individuals and entities after they have committed fraud addresses a small fraction of fraudulent activity, requires significant time and resources, and returns only a portion, if anything, of what was lost. Tactics of those who commit fraud are constantly evolving. As such, agencies should strive to continuously improve anti-fraud efforts to more efficiently and effectively prevent, detect, and respond to fraud.
This statement focuses on (1) specific risks and examples of fraud, waste, and abuse associated with foreign assistance and (2) useful practices and weaknesses in fraud risk management in foreign assistance identified through past GAO work. This statement is based on a body of work of selected reports GAO published from July 2015 to January 2026 addressing fraud risk management in foreign assistance.
Recommendations
Since July 2016, GAO has made at least 51 recommendations to support the management of fraud and other risks for agencies delivering foreign assistance. While agencies have implemented 22 of these recommendations, addressing the remaining 29 recommendations would improve risk management and better enable agencies to prevent fraud, waste, and abuse.
Full Report
GAO Contacts
Latesha Love-Grayer Director International Affairs and Trade lovegrayerl@gao.gov
Media Inquiries
Sarah Kaczmarek Managing Director Office of Public Affairs media@gao.gov
Public Inquiries
Topics
International Affairs Fraud, waste, and abuse Foreign assistance Compliance oversight Risk management Internal controls International organizations Past performance Humanitarian assistance Police Risk assessment
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