Fraud in Federal Programs: Limited Beneficial Ownership Information Available on Awardees

A GAO review found that federal agencies generally don't require companies to disclose beneficial ownership, the identity of who actually controls or benefits from an entity, when awarding contracts, grants, or Medicare payments. Fraud cases cited include stolen identities used to register shell companies that bilked Medicare for nearly $16 million, and a pass-through billing scam that misdirected $23.5 million in federal funds.

A 2021 defense law directed GSA to build a beneficial-ownership database for contractors, and a rulemaking process opened that year, but the deadline has now slipped to at least September 2026. Meanwhile a separate policy change exempted domestic entities from reporting to the Treasury's FinCEN registry, removing about 99 percent of entities that previously had to report.

GAO says hundreds of billions of dollars in federal awards remain vulnerable to this kind of fraud and says it will keep watching GSA's progress, which so far amounts to five years of watching a deadline move.

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