Watchdog IDs anti-fraud measures some federal programs still need to adopt

A handful of federal programs haven’t been doing enough to protect against fraud, according to a new Government Accountability Office audit that follows reports that DOGE’s pledge to root out waste, fraud and abuse fell well short of its own projections.

The new report focused on five agency-run initiatives, with the watchdog examining the extent to which each had followed nine requirements laid out in Office of Management and Budget guidance to “oversee and prevent fraud, waste, and abuse in awards, including grants, contracts, and loans.”

In conducting its performance audit from March 2024 to December 2025, the GAO found that the Federal Communications Commission’s Universal Service Program for Schools and Libraries had been following all nine recommendations. 

There were missing pieces, however, in the other four programs: the Department of Commerce’s CHIPS for America Fund, the Environmental Protection Agency’s Greenhouse Gas Reduction Fund, the Department of Health and Human Services’ Health Center Program, and the Department of Energy’s Regional Clean Hydrogen Hubs.

Of those four, the GAO found the DOE’s Regional Clean Hydrogen Hubs program to be the most lacking in its fraud prevention practices. Known as H2Hubs, the Energy-run R&D initiative provides funding for seven regional networks of hydrogen producers, infrastructure and possible customers. 

According to the report, DOE hadn’t determined risk responses or documented an antifraud strategy based on the fraud risk profile of H2Hubs, nor did it assess program-specific risks, including fraud, or conduct risk-based monitoring and evaluations of all components of the Fraud Risk Framework. 

The watchdog also found that Energy did not establish collaborative relationships with stakeholders or create incentives to help ensure effective implementation of the antifraud strategy, and only partially completed the recommendation to maintain agencywide and program-specific risk profiles.

“DOE officials stated [that they] believed that a project-level fraud risk policy would be an inefficient use of resources at this time, as H2Hubs has only recently issued awards,” the report said. “In addition, DOE officials noted that it is difficult to determine fraud risk when the agency is still determining the details of the program. DOE stated that it will identify and investigate these risks in fiscal years 2025 and 2026.”

HHS’s Health Center Program, meanwhile, also failed to maintain agencywide and program-specific risk profiles, and only partially addressed recommendations on assessing program-specific risks, documenting an anti-fraud strategy and undergoing risk-based monitoring. 

HHS officials told the GAO last April that the agency was in the process of helping its bureaus create program-specific fraud risk profiles for the upcoming fiscal year. After that, developing an agencywide fraud risk profile would be a priority. 

“They also stated that HHS prioritized actively conducting the work — identifying risks and addressing them across programs — over formal documentation of the processes in the earlier stages of the program’s efforts to address fraud risks,” the watchdog stated.

On its CHIPS for America Fund, Commerce is following all OMB recommendations save for one, per the GAO: evaluating audits, including recovery audits and single audits. And the EPA’s Greenhouse Gas Reduction Fund didn’t have a Senior Management Council to assess and monitor deficiencies in internal control, though the program has since been repealed by the Trump administration.

“Proactively managing fraud risk is critical to facilitate program missions and strategic goals as it ensures that taxpayer dollars and government services serve their intended purposes,” the GAO concluded. “Until these agencies design and implement these identified requirements and leading practices, they will continue to face an increased risk of fraud, waste, and abuse in the selected programs.”