Improper payments and payment integrity: what they are

In US federal usage, an improper payment is one that should not have been made, was made to the wrong recipient, was made in the wrong amount, or lacks the documentation to show it was proper. Most are overpayments. Not every improper payment is fraud: many come from errors, missing paperwork or eligibility mistakes. Fraud is the deliberate subset.

The US Government Accountability Office estimated government-wide improper payments at about $186 billion in fiscal year 2025, across 64 programs at 15 agencies, and about $24 billion more than the year before. Agencies reported about $153 billion of it, roughly 82 percent, as overpayments. GAO notes the total leaves out some programs that agencies have found susceptible to significant improper payments, so the full figure is higher.

Most recovery happens after the money has gone, which is slow and recovers only part of it. Payment integrity work moves the check earlier: reading payment, procurement and vendor records together before release, and holding payments that fit known patterns, such as duplicate invoices, split purchases kept under approval limits, or vendors who share bank details or addresses, for a person to review.

Explain every hold.

A reviewer has to see which pattern caught a payment and on which records.

Keep a person in the loop.

The system holds; a named person releases or rejects.

Hold few, hold well.

A check that holds too many payments gets switched off.

Alethman’s Polity reads payment, procurement and vendor records together and holds payments that fit a known fraud pattern for review. Today it reads India’s PFMS, GeM and CPPP; other countries need their own connectors.

Polity