Treasury Watchdog Finds No Evidence Backing Musk’s Payment Fraud Claims

The Treasury Department’s internal watchdog concluded a review of the federal government’s $6 trillion payment system without finding evidence of fraud, determining that the government has “generally adequate” controls in place but that several weaknesses need to be addressed.

The findings of the 10-month review, posted publicly on Wednesday, undercut Elon Musk’s allegations last year that his DOGE team had found significant irregularities in the government’s payment systems and that Treasury employees had knowingly approved payments to fraudulent organizations and terrorist groups.

Treasury “generally has adequate access and payment-related controls in place, and there were no specific allegations of improper or fraudulent payments,” said the report by the agency’s acting inspector general, Loren J. Sciurba.

“We did not find evidence of violations of administrative or criminal law that would constitute fraud,” the report said.

Still, the inspector general identified several weaknesses in Treasury’s oversight of its payment systems.

Among the problems cited in the report was Treasury’s oversight of access to its sensitive payment systems. The inspector general noted a previously reported lapse at the beginning of the Trump administration in which a DOGE employee was erroneously granted the power to change payment-system data and later sent a spreadsheet containing sensitive personal information to someone outside the agency.

The inspector general also faulted Treasury for failing to check whether international payments were duplicates or whether recipients owed delinquent debts to the government that should have reduced those payments.

A sample of nearly $1 billion in international payments reviewed by the inspector general found that more than $18 million was sent to recipients who could have been subject to offsets because of delinquent debts, while $300,000 consisted of improper duplicate payments.

In addition, the inspector general found more than 560,000 payments totaling about $23 billion from one of Treasury’s main disbursement systems with “clearly invalid” taxpayer identification numbers, such as “ABC-DE-1234” or “999-99-9999.”

The report said a separate audit would be needed to determine whether those payments were actually improper, but said the invalid identification numbers reflected a control weakness that could prove significant if even a fraction of the payments were improper.

The inspector general also recommended that Treasury more diligently track which officials at other agencies had been authorized to approve payments.

In a statement included in the report, Joseph Gioeli, the acting commissioner of Treasury’s Bureau of the Fiscal Service, said the agency “agrees with the goals underpinning” all of the inspector general’s recommendations and had already implemented some of them.

Gioeli said the agency has “robust controls” over its payment systems.

Representatives for Musk did not immediately respond to a request for comment.

Treasury Secretary Scott Bessent’s decision to grant DOGE associates access to sensitive federal payment systems set off a political firestorm at the beginning of the second Trump administration. Federal courts temporarily blocked the decision before allowing some access for DOGE, though some court-ordered restrictions remain in place and Treasury continues to challenge them in court.

Senate Democrats had requested that the inspector general conduct the review.

The findings come as the Trump administration has made reducing improper payments a priority. The Government Accountability Office estimated improper payments totaled $186 billion in fiscal 2025, up $24 billion from the prior year but below post-pandemic highs.

The administration has expanded agencies' use of Treasury's Do Not Pay system, which Treasury said helped prevent $11.7 billion in improper payments in fiscal 2025. Trump earlier this year signed a bipartisan law giving the program permanent access to Social Security death records to help prevent payments to deceased individuals.