Report Published October 27, 2025 · 8 minute read
Fraud Watchdogs: How GAO and OIGs Fight Waste, Fraud, and Abuse
Annie Shuppy & Zach Moller
Every year, hundreds of billions of federal taxpayer dollars are lost to waste, fraud, and abuse. And every year, the federal government fights back. Lawmakers have tasked two nonpartisan entities to safeguard the American taxpayer and look for ways to make government more efficient and less expensive: the Government Accountability Office (GAO) and the Offices of Inspectors General (OIGs).
The GAO, often called the “congressional watchdog,” is an independent, nonpartisan office that audits and evaluates federal programs for mismanagement, inefficiencies, or vulnerabilities. OIGs, meanwhile, are embedded in nearly every major federal agency. They serve as on-the-ground investigators, auditors, and evaluators—deterring misconduct and holding bad actors accountable.
Together, GAO and OIGs form a powerful oversight system that safeguards public resources. They provide transparency, recommend reforms, and ensure federal dollars are directed where they are supposed to go—whether that’s paying benefits to families or keeping America safe. In this report, we break down who GAO and the OIGs are, how they operate, and why they matter.
How the GAO Fights Waste, Fraud, and Abuse
Background: The Government Accountability Office serves as an auditor for Congress, studies federal programs and expenditures, and investigates how the federal government spends taxpayer dollars.1 It responds to Congressional requests and can also initiate its own projects on topics related to federal governance.2 An agency in the legislative branch, the GAO was established by the Budget and Accounting Act of 1921 and renamed in 2004.3 It has its own inspector general (IG), for which Congress recommends funding and staffing levels.
Oversight Functions:
- Auditing federal agencies to determine whether funds are being spent efficiently and effectively;
- Investigating allegations of illegal and improper activities;
- Reporting how well government programs and policies are meeting their objectives;
- Performing policy analyses and outlining potential solutions for congressional consideration; and
- Issuing legal decisions and opinions, such as bid protest rulings and reports on agency rules.4
GAO in Action: Among the GAO’s highest-profile reports are the High Risk List, which names programs and activities most susceptible to waste, fraud, abuse, or mismanagement, and the Duplication and Cost Savings Report, which highlights opportunities to reduce fragmentation, overlap, and duplication.5 Both have earned the GAO recent praise and congressional attention from across the partisan divide.6 In addition, congressional appropriators have empowered the GAO to audit earmarks contained in spending laws.7
While Congress generally seems to value the GAO’s oversight role, the agency has run afoul of Republicans by seeking to maintain limits on presidential and congressional power. For example, the GAO challenged the Senate’s ability to use the Congressional Review Act to reverse climate policy regulations that were finalized under President Biden, and it rebuffed efforts by the Department of Government Efficiency to embed its own staff members within the agency.8
These tensions peak when GAO challenges a president’s illegal withholding of congressionally approved funds, also known as impoundment. The Congressional Budget and Impoundment Control Act gives the GAO authority to bring civil actions against the executive branch in US District Court for the District of Columbia for impoundment violations.9 The Trump administration has been hostile to the GAO’s authority over impoundments since Trump’s impeachment over a related matter in 2019.10 The House’s FY 2026 Legislative Branch appropriations bar the GAO from using funds to bring civil actions over impoundment violations, unless Congress specifically authorizes it.11
Funding Challenges: The GAO received $886 million in FY 2024, and its appropriations stayed the same in FY 2025 due to a continuing resolution.12 Of that total, $812 million comes from direct appropriations, and $74 million from reimbursements or fees for conducting financial audits of government corporations as well as the rental of space in the GAO building.13
House appropriators are proposing a 49% cut to direct appropriations for the GAO budget for FY 2026.14 The Senate would keep the direct appropriation at FY 2025 levels, although GAO’s total budget would decrease 4% due to a decrease in reimbursements.15
Room for Improvement: Beyond politicized efforts to constrain the GAO’s power or independence, lawmakers have a number of bipartisan suggestions for improving the office. Specific recommendations include:
- Provide timeframes for agencies to implement GAO recommendations and information on the costs of recommendations that have not been implemented.16
- Give Congress more information on how well and how quickly executive branch agencies respond to congressional inquiries.17
- Use technology to update and improve processes, including interagency data-sharing and government-wide coordination efforts.18
- Report on the use of artificial intelligence across the legislative branch.19
How OIGs Fight Waste, Fraud, and Abuse
Background: The federal government’s OIGs are led by independent, nonpartisan IGs supported by staff. As they fight to prevent and detect waste, fraud, and abuse in the federal government, their independence is key.20 There are currently 74 OIGs provided by statute, but several of these roles are empty following firings by the Trump administration in early 2025.21 The Council of the Inspectors General on Integrity and Efficiency (CIGIE) is the official oversight group of the OIGs.22 The majority of the OIGs were created and continue to be governed by the Inspector General Act of 1974; CIGIE was created under a 2008 reform law.23
Oversight Functions:
- Auditing, inspecting, investigating, and evaluating federal agencies and offices;
- Issuing findings and recommendations to improve federal programs directly to Congress;
- Referring cases for criminal prosecution or civil action through coordination with other OIGs, federal law enforcement, or state and local law enforcement; and
- Working with whistleblowers.24
OIGs in Action: CIGIE estimates a return of $18 for every $1 invested in IG services.25 In FY 2024 alone, federal OIGs:
- Identified $71.1 billion in savings from federal programs and operations, including $52.7 billion from audit recommendations and $18.4 billion from recoveries and receivables stemming from investigations.26
- Issued 2,042 audit, inspection, and evaluation reports and conducted investigations that resulted in 3,675 criminal prosecutions and 1,015 civil actions.27
- Netted bipartisan wins, such as identifying a grantee who was under investigation for illegally exporting semiconductor technology to a Chinese company and helping prosecute individuals who bribed doctors into ordering unnecessary durable medical equipment.28
Despite these clear examples of reducing waste, fraud, and abuse, OIGs have been at risk during the Trump administration. Notably, President Trump fired 19 IGs in the first few months of his presidency.29 Eight of the fired IGs filed a lawsuit seeking reinstatement, but a US District Court judge said that, even though the Trump administration had acted illegally, she could not return them to their jobs.30
Democrats on the House Appropriations Committee decried the IG firings as antithetical to good government.31 They have also tried to restore funding to OIGs that are facing funding cuts and have attempted to add an IG to the Office of Management and Budget within the White House.32
Even more recently, Secretary of Defense Pete Hegseth announced rule changes targeting IG investigations within his department, such as new restrictions on how IGs process complaints and when they should provide updates on investigations.33 The Trump administration’s Office of Management and Budget has effectively defunded CIGIE and forced down several IG websites, prompting concern from both Senate Republicans and Democrats.34
Funding Challenges: Collectively, the OIGs received a total of $3.9 billion in FY 2024, and appropriations for most offices stayed at same level in FY 2025 due to the continuing resolution.35 But funding varies by agency, with the Department of Defense (DOD) IGs getting the most—$529 million in FY 2024.36
For FY 2026, several OIGs are facing cuts or flat funding. House appropriators are proposing a 4% cut for DOD IG for FY 2026, while Senate appropriators are proposing a 7% cut (the administration’s requested level).37 Inspector General offices at the Department of Justice, NASA, and the National Science Foundation are also among those facing cuts.38
Room for Improvement: Many of the recommendations to bolster the independence of the OIGs and public confidence focus on increasing the public salience of their existence, as their work often flies under the radar.
Bipartisan organizations focused on good governance have made the following suggestions to improve OIGs:
- Encourage congressional committees to highlight current recommendations from OIGs at hearings and in other public forums.
- Call on CIGIE to organize yearly or twice-yearly meetings to discuss the OIGs and their work to educate members of Congress.39
- Change the length of an IG’s service from an indefinite term to a renewable one that spans administrations, while only allowing removal for cause.40
Comparing and Contrasting
The GAO and the OIGs are both watchdogs, but they do slightly different things and do them in different ways. Further, their work can complement each other.
Conclusion
No matter where one sits on the ideological spectrum, it’s important to stop waste, fraud, and abuse in the federal government. The GAO and Offices of Inspectors General are both key players in doing so, and one watchdog’s work often complements the other. For example, the GAO may look at waste an IG found in one agency and analyze how those findings could be generalized across government. That report can then inform the other IG to pursue that line of investigation. This reinforces a cycle of good governance.
Unfortunately, these institutions are under attack by the Trump administration. Recent attempts to slash the GAO budget and interfere with independent inspectors general are bad for governance and bad for fighting waste, fraud, and abuse. Their work may be under the radar, but the threat they face shouldn’t be. Policymakers should draw a hard line and reject efforts to defund and muzzle these watchdogs.
