The Government’s Own Auditor Keeps Telling the SEC, HUD, and the SBA How to Stop Losing Money — and They Keep Not Doing It.
Every year the Government Accountability Office (GAO) — Congress’s nonpartisan watchdog — sends a short, pointed letter to the heads of major federal agencies. The letters carry a special label: “priority open recommendations.” These are not routine suggestions. They are the fixes GAO judges most urgent — the ones that could save large sums, close fraud loopholes, or stop a program from failing the people it serves. By definition, they are also the ones the agency has so far refused to implement.
This year the letters to three agencies tell a striking story when read side by side. The Securities and Exchange Commission has been urged to build a coordination mechanism for the blockchain and crypto risks it admits it cannot yet manage. The Department of Housing and Urban Development is sitting on ten priority recommendations on disaster-recovery fraud and manufactured housing. And the Small Business Administration — the agency that disbursed roughly $1,200,000,000,000in pandemic loans and, by its own watchdog’s estimate, sent more than $200,000,000,000of it to fraudsters — still has not closed out recommendations GAO has pressed for years.
None of this is hidden. GAO publishes the letters, names the recommendations, and tracks which ones the agency has ignored. The throughline is not a single scandal. It is the quieter, more expensive habit of leaving high-value fixes undone — the exact accountability gap a government-efficiency drive exists to close.
- $200B+ — the SBA Inspector General's estimate of potentially fraudulent pandemic loans — about 17% of all COVID-EIDL and PPP funds the agency disbursed · Source: SBA OIG Report 23-09; NPR
- 10 recs — HUD's priority open recommendations as of June 2026 — covering disaster-recovery fraud, fragmentation, and manufactured-housing finance · Source: GAO-26-108960
- ~3 million — fraud referrals SBA sent its Inspector General; nearly 2 million could not be fully investigated for lack of usable data · Source: GAO-25-107267
- 42 / 17 — GAO recommendations to SBA on fraud, improper payments, and contracting since June 2020 — only 17 implemented · Source: GAO-26-108820
- $30,000,000,000 — what GAO estimates the controls SBA did adopt have saved taxpayers through the end of fiscal 2025 — proof the fixes work when used · Source: GAO-26-108820
Since 2015, GAO has flagged a subset of its recommendations as “priority” — the ones it says “warrant priority attention from heads of key departments or agencies because their implementation could save large amounts of money; improve congressional or executive branch decision-making on major issues; eliminate mismanagement, fraud, and abuse; or make progress toward addressing a high-risk or duplication issue.” In plain terms: these are the fixes with the biggest payoff, addressed directly to the person who can order them done. When a recommendation stays “open” year after year, that is a choice the agency is making.
“Priority recommendations warrant priority attention because their implementation could save large amounts of money or eliminate mismanagement, fraud, and abuse.”
GAO — standing definition used in every priority-recommendation letter
The clearest case is the SBA. Over the pandemic the agency pushed out roughly $1,200,000,000,000 in Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) funds. The agency’s own Inspector General later estimated that more than $200,000,000,000 of that went to potentially fraudulent actors — at least 17% of all COVID-EIDL and PPP money, split roughly into more than $136,000,000,000 in EIDL and $64,000,000,000 in PPP.
GAO has made 42 recommendations to the SBA since June 2020 on managing fraud risks, estimating improper payments, and overseeing contracting. As of GAO’s latest review, the agency had implemented only 17. The rest stay open — including measures GAO ties directly to the agency’s ability to detect and refer fraud. GAO is blunt that the fixes pay for themselves: it estimates the controls SBA did put in place collectively saved more than $30,000,000,000 through the end of fiscal 2025. The unimplemented recommendations are, in effect, savings the agency is leaving on the table.
Our priority recommendations flag the fixes that matter most — closing fraud loopholes, cutting improper payments, protecting taxpayer dollars. We track which ones agencies have implemented, and which they haven't.
One unimplemented fix is especially costly. In a March 2025 report, GAO found the SBA had sent its Inspector General roughly 3 million fraud referrals from the COVID-EIDL program — but nearly 2 million of them could not be fully investigated because the referrals lacked enough usable data or contained quality problems like duplicates and incorrect information. A referral the watchdog cannot act on is a fraud lead that quietly dies. GAO recommended the SBA fix how it builds and refers those cases. It remains open.
Small Business Administration — disbursed roughly $1,200,000,000,000 in pandemic PPP and EIDL funds; the controls were stood up under the Biden-era SBA, and its independent auditor reported material weaknesses in those controls for years running.
SBA Office of Inspector General — produced the $200,000,000,000-plus fraud-landscape estimate and the count of unusable referrals; separate recovery efforts have since seized or returned billions of dollars more.
GAO — the nonpartisan congressional auditor that has now made 42 recommendations to the SBA on these exact risks, most still open.
The SEC’s priority list is short but pointed. GAO has urged the commission — together with the other federal financial regulators — to “jointly establish or adapt an existing formal coordination mechanism to identify and address risks posed by blockchain-related products and services.” The logic is straightforward: crypto and blockchain products cut across the turf of several regulators, and without a shared mechanism, GAO warns, no single agency reliably spots an emerging risk in time to respond. The recommendation has stayed open even as digital-asset markets ballooned.
The SEC’s information-security history compounds the worry. In prior GAO reviews the commission was cited for control weaknesses tied to its EDGAR disclosure system — inadequately documented access privileges, patches not always applied to vulnerable servers, passwords not always sufficiently protected — problems serious enough that GAO once found a significant deficiency in the SEC’s internal control over financial reporting. An agency that struggles to lock down its own filing system is exactly the one that needs a working early-warning mechanism for a fast-moving market it has openly struggled to police.
The Commission continues to assess oversight of digital-asset and blockchain-related products and to coordinate with fellow financial regulators on emerging market risks.
HUD’s June 2026 letter (GAO-26-108960) is the freshest of the three. GAO identified nine priority recommendations in May 2025; HUD implemented none of them, so in June 2026 GAO added two more and dropped one — leaving ten priority open recommendations. GAO singled out two areas for “timely and focused attention”: reducing fraud and fragmentation in federal disaster recovery, and improving the financing and availability of manufactured housing. Disaster recovery is the higher-stakes item — GAO ties the fixes to better service for disaster survivors, more effective recovery, and a smaller federal fiscal exposure when the next catastrophe hits.
The pattern at HUD mirrors the others: GAO names the fix, the agency lets the year pass, and GAO re-issues the letter. “Fragmentation” is itself part of the problem — disaster-recovery money flows through overlapping programs that make fraud easier to hide and accountability harder to assign. That is the kind of structural waste a recommendation can actually close, if an agency head decides to act on it.
They lost HUNDREDS OF BILLIONS to pandemic fraud and the watchdog told them exactly how to stop it. They did NOTHING. We are finding the waste, the fraud, the abuse — and we are FIXING it!
Paraphrased commentary · not a verbatim post
Trump's recurring framing of pandemic-relief fraud and government waste — paraphrased and labeled as commentary, not a verbatim post.
The watchdog handed these agencies the exact playbook to stop losing your money — and they sat on it. SEC, HUD, SBA: implement the recommendations or explain to the American People why you won't. Accountability is back!
Paraphrased commentary · not a verbatim post
Trump's standing posture on agency accountability — paraphrased and labeled as commentary, not a verbatim post.
Three agencies, three different missions, one habit. The SBA was warned how to detect and refer the fraud that consumed more than $200,000,000,000 of pandemic money, and most of those recommendations are still open. The SEC was warned to build a coordination mechanism for a crypto market it admits it cannot fully see, and hasn’t. HUD was handed ten priority fixes on disaster-recovery fraud and housing finance, and let a year pass without closing them.
GAO has already shown the math runs the other way when agencies listen: the SBA controls that were adopted saved more than $30,000,000,000. The unimplemented recommendations are not abstractions — they are documented, dollar-denominated fixes, addressed by name to the people who can order them. Whether they get done is no longer a question of evidence. It is a question of will. We’ll track each of these letters and update as the agencies close — or keep ignoring — the recommendations.
- 1.GAO — 'Priority Open Recommendations: Department of Housing and Urban Development' (GAO-26-108960), June 9, 2026
- 2.GAO — 'Priority Open Recommendations: Securities and Exchange Commission' (GAO-25-108049), May 15, 2025
- 3.GAO — 'Priority Open Recommendations: Small Business Administration' (GAO-25-108048), 2025
- 4.GAO — 'Small Business Administration: Opportunities to Improve Management of Fraud Risks, Improper Payments, and Contracting Programs' (GAO-26-108820)
- 5.GAO — 'COVID-19 Relief: Improved Controls Needed for Referring Likely Fraud in SBA's Pandemic Loan Programs' (GAO-25-107267), March 24, 2025
- 6.GAO — 'COVID Relief: Fraud Schemes and Indicators in SBA Pandemic Programs' (GAO-23-105331), May 2023
- 7.SBA Office of Inspector General — 'COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape' (Report 23-09), June 27, 2023
- 8.GAO — United States Securities and Exchange Commission agency recommendations page
- 9.SBA — 'SBA Sends 562,000 Suspected Fraudulent Loans to Treasury for Collections Totaling $22 Billion,' April 24, 2026
- 10.NPR — 'Over $200 billion in pandemic business loans appear to be fraudulent, a watchdog says,' June 27, 2023
- 11.National Review — 'Watchdog Says Business-Loan Fraud During Pandemic Exceeded $200 Billion'
- 12.Fox Business — 'Vance task force reveals Biden admin protected 562K pandemic loans in $22.2B suspected fraud scheme'
Last updated June 22, 2026