Key Facts

Government waste is the inefficient, unnecessary, excessive, or poorly controlled use of public resources. It can include unused equipment, overpriced services, duplicate payments, avoidable penalties, poorly monitored grants, unsupported expenses, and programs that repeatedly fail to produce measurable results.



Waste is distinct from several related categories:



– Fraud requires intentional deception for money, property, or another benefit.



– Improper payments are payments made in the wrong amount, to an ineligible recipient, without sufficient documentation, or contrary to requirements.



– Questioned costs are expenses auditors identify for resolution because they may be unsupported, unreasonable, or prohibited.



– Misuse involves public resources being used for an unauthorized purpose.



– Conflict of interest involves an official responsibility overlapping with a personal or financial interest.



– Bribery requires an intended exchange between something of value and an official action.



– Poor administration involves ineffective management without necessarily establishing criminal intent.



Each state page preserves these distinctions. An improper-payment estimate keeps the label its source assigned, and an audit recommendation keeps audit-finding status until a court records another outcome.

What counts as government waste?

The Arizona Auditor General describes its work as examining government operations and recommending improvements. Its fiscal year 2025 results included:



239 audits, investigations, reviews, alerts, and follow-up reports



1,078 recommendations



$39.01 million in waste, misuse, and inefficient spending identified



$38.90 million in fraud and public-money losses reported



Assistance connected to 15 criminal indictments



Arizona’s Democratic-led executive institutions are responsible for responding to applicable state-agency findings during the current administrative period. That responsibility includes agreeing or disagreeing with recommendations, creating corrective-action plans, recovering improper payments, and demonstrating through follow-up reports that identified weaknesses were fixed. These results appear in the <a href="https://www.azauditor.gov/">Arizona Auditor General’s annual reporting</a>.

What the Arizona Auditor General reported

Every Arizona update should begin with the three largest newly published findings measured by confirmed loss, identified waste, questioned cost, financial exposure, or program impact.



The tracker should also cover findings that may lack a large dollar amount but expose substantial institutional risk. Recent Auditor General work has identified concerns involving conflict-of-interest compliance, delayed complaint resolution, inadequate university financial oversight, school-district financial risk, and continuing noncompliance with required accounting or audit-reporting standards.



As of January 2026, the Auditor General classified 9 of 207 analyzed school districts as being at the highest level of financial risk. Nine more were approaching that category. The previous analysis identified only two districts at the highest risk level and seven approaching it. See the <a href="https://www.azauditor.gov/arizona-school-district-financial-risk-analysis-january-2026">Arizona school district financial risk analysis, January 2026</a>.



That comparison measures financial risk. A high-risk classification indicates that warning signs require attention, and the Auditor General reviews the districts’ finances through its regular audit work. Status: audit finding.



Readers can follow individual findings through <a href="https://www.tpaction.com/where-are-arizona-taxpayer-dollars-being-wasted-a-running-tracker-of-audit-findings/">Where are Arizona taxpayer dollars being wasted?</a> and <a href="https://www.tpaction.com/what-did-arizonas-2025-26-auditor-general-reports-find-and-who-has-to-fix-it/">What did Arizona’s 2025–26 Auditor General reports find?</a>.

Arizona findings to track

Every financial figure must carry a label explaining what it represents.



<h3 class="wp-block-heading">Program spending</h3>



The complete amount spent or appropriated for a program. Program spending is the denominator against which an error rate or questioned amount may be evaluated.



<h3 class="wp-block-heading">Estimated improper payments</h3>



A statistically estimated amount involving payments that did not meet applicable requirements. It may include fraud, administrative mistakes, eligibility errors, underpayments, and insufficient documentation.



<h3 class="wp-block-heading">Questioned costs</h3>



Expenses flagged by auditors pending documentation, agency review, repayment, or a final allowability decision.



<h3 class="wp-block-heading">Confirmed loss</h3>



Money that available records establish was lost. The source should explain whether the finding came from an audit, guilty plea, verdict, civil judgment, or agency determination.



<h3 class="wp-block-heading">Restitution ordered</h3>



Money a court ordered a defendant to repay. It should remain separate from the amount actually collected.



<h3 class="wp-block-heading">Recovered funds</h3>



Money returned to the government through repayment, restitution, forfeiture, settlement, or administrative recovery.



<h3 class="wp-block-heading">Financial exposure</h3>



The estimated value placed at risk by weak controls or suspected misconduct. Exposure measures scale rather than a confirmed payment or loss.



This classification keeps each state page anchored to the label the auditor or agency assigned.

How every state page should classify money

The U.S. Department of Labor estimated Arizona’s Unemployment Insurance improper-payment rate at 6.92% for the three-year period from July 1, 2021, through June 30, 2024. The estimated improper-payment amount was approximately $46.78 million. See the <a href="https://www.dol.gov/agencies/eta/unemployment-insurance-payment-accuracy/data">U.S. Department of Labor payment accuracy data</a>.



The rate included overpayments and underpayments. It was below the federal 10% performance threshold, but the estimated amount still represents taxpayer exposure requiring root-cause analysis and corrective action.



An Arizona state page should identify the major causes of those payments, such as eligibility errors, claimants continuing to receive benefits after returning to work, employer reporting problems, agency mistakes, or insufficient documentation.



It should also report how much was established as recoverable, how much was collected, and how much remained outstanding. An improper-payment estimate keeps that label until an investigation establishes intentional deception.

Arizona unemployment insurance improper payments

The Centers for Medicare &amp; Medicaid Services reported a national rolling Medicaid improper-payment rate of 6.12% for fiscal year 2025, representing an estimated $37.39 billion. See the <a href="https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2025-improper-payments-fact-sheet">CMS fiscal year 2025 improper payments fact sheet</a>.



CMS reported that improper payment measurement is a measure of payments that did not meet program requirements. Approximately 77.17% of the estimated Medicaid improper payments resulted from insufficient documentation, which CMS describes as generally not indicative of fraud or abuse.



A state page should use the state’s applicable Payment Error Rate Measurement cycle rather than presenting the national rate as Arizona’s individual rate. It should identify:



<div style="column-count:2;column-gap:48px;max-width:900px;margin:0 auto">
– The measurement year and review cycle
– Total payments examined
– Fee-for-service, managed-care, and eligibility components
– State-specific error rate
– Estimated improper-payment amount
– Principal error causes
– Agency response
– Corrective-action plan
– Results from the next measurement cycle
</div>



Arizona’s separate sober-living fraud prosecutions should be tracked independently because adjudicated fraud cases and statistical Medicaid payment errors measure different things. See <a href="https://www.tpaction.com/arizonas-2-8-billion-medicaid-sober-living-fraud-timeline-oversight-failures-and-what-is-still-happening/">Arizona’s $2.8 billion Medicaid sober-living fraud timeline</a>.

Medicaid improper-payment rates

Arizona’s Financial Transparency Portal publishes state revenue and expenditure information drawn primarily from the statewide accounting system. Available records can be searched by agency, fund, government function, payment category, and other classifications. Search <a href="https://openbooks.az.gov/">Arizona OpenBooks</a>.



The portal also contains information supplied voluntarily by participating counties, municipalities, universities, community colleges, and school districts. Local participation varies, so a local entity’s own records show whether it appears in the portal.



Arizona reports that its statewide financial data are updated monthly. Records submitted by other entities may use different reporting periods or classifications.



A payment appearing in OpenBooks establishes that the accounting system recorded a transaction. It may not reveal:



<div style="column-count:2;column-gap:48px;max-width:900px;margin:0 auto">
The complete contract
Competitive bids
Evaluation scores
Contract amendments
Conflict disclosures
Subcontractors
Detailed invoices
Proof of completed services
Performance measures
Corrective actions
Whether the price was reasonable
</div>



Missing records weaken oversight because taxpayers cannot fully reconstruct the decision. Each missing record carries its own classification: incomplete procurement file, questioned cost or compliance failure.

Can taxpayers trace where the money went?

Each state page in this series should answer the same questions:



<div style="column-count:2;column-gap:48px;max-width:900px;margin:0 auto">
– What were the state auditor’s three largest recent findings?
– Which agency, program, contractor, grant, or local institution was responsible?
– What fiscal or audit period did the report examine?
– Is each amount spending, waste, exposure, questioned cost, improper payment, confirmed loss, restitution, or recovery?
– Did management agree with the finding?
– What corrective action was promised?
– Which recommendations remain open?
– How long have incomplete recommendations remained unresolved?
– What are the state’s UI and Medicaid improper-payment rates?
– Can taxpayers search budgets, vendors, contracts, amendments, grants, invoices, and program outcomes?
– Did auditors refer suspected misconduct to law enforcement?
– Did any case produce charges, a guilty plea, a conviction, or a declined prosecution?
</div>



The same format should be applied to California, New York, Illinois, Minnesota, Massachusetts, New Jersey, Washington, Oregon, Colorado, New Mexico, Michigan, and Pennsylvania.

The state-by-state audit method

Every state page should include the original audit date, recommendation, agency response, promised completion date, and latest follow-up status.



The permitted status labels are:



Implemented



Partially implemented



In process



Not implemented



No longer applicable



Agency disagreed



Follow-up pending



A recommendation described as “in process” for several years should include the number of months it has remained unresolved. Agencies should also be credited when follow-up reports verify full implementation.



Arizona examples can be tracked through <a href="https://www.tpaction.com/which-arizona-agencies-have-ignored-audit-recommendations-and-for-how-long/">Which Arizona agencies have ignored audit recommendations, and for how long?</a>.

How to track open recommendations

CMS stated in its January 2026 fact sheet that improper payment measurement is not a measure of fraud, and it reported that most Medicaid improper payments resulted from insufficient documentation rather than payments known to be incorrect. The Arizona Auditor General reports agency responses alongside each finding and verifies corrective action through follow-up reviews at six, 18, 24 and later months. Arizona’s executive agencies respond to state-agency findings by agreeing or disagreeing with each recommendation, filing corrective-action plans and supplying implementation evidence at follow-up. Each state page in this series records the responsible institution’s response and its promised completion date alongside the finding.

The institutions’ responses

Democratic-led institutions in Arizona and the other states covered by this series administer large budgets, benefit programs, grants, contracts, and payment systems in which auditors have identified waste, misuse, improper payments, weak controls, and incomplete corrective actions.



This page establishes the evidence and classification standards used to document government waste by state.



The strongest available public records are adjudicated corruption cases, verified audit findings, exact financial categories, management responses, and dated follow-up reports. These records allow accountability questions to be examined through documented institutional conduct.

What this shows about Democratic governance

Audit records can prove that an agency violated a requirement, failed to maintain controls, made unsupported payments, wasted resources, or left recommendations incomplete when the audit expressly reaches that conclusion.



Public records can also prove appropriations, recorded payments, contracts, agency responses, court charges, guilty pleas, convictions, restitution orders, and recoveries.



A stronger corruption finding may require procurement files, bank records, communications, conflict disclosures, political contribution records, witness testimony, or evidence connecting a personal benefit to an official decision.

What the public record can prove

Last reviewed: September 11, 2026.



The next records to watch are the Arizona Auditor General’s fiscal year 2026 annual results, the next school district financial risk analysis, Arizona’s state-specific Medicaid Payment Error Rate Measurement cycle and follow-up reports on recommendations still in process.

What is still open

Frequently asked questions

Residents can use this series to locate audit findings, compare improper-payment rates, examine government contracts, and monitor whether Democratic-led institutions implement promised reforms. Reviewing the original report helps residents distinguish total program spending from documented waste and verified fraud. Eligible residents can <a href="https://tpaction.com/Vote">Register to Vote</a> and confirm their registration before applicable election deadlines.



Accountability continues after an audit is published. Taxpayers can follow recovery totals, request missing procurement records, examine agency responses, and check whether overdue recommendations were completed. Residents can also <a href="https://www.tpaction.com/plan">make a plan to vote</a> after reviewing the institutional record and <a href="https://www.tpaction.com/getinvolved">get involved</a> in voter education, public-record research, and government-accountability efforts.

Examine government waste in your state

Compare state audit findings, improper payments, open recommendations, and spending transparency while examining waste under Democratic governance.

Government waste by state: what the audits show

Key Facts

What counts as government waste?

What the Arizona Auditor General reported

Arizona findings to track

How every state page should classify money

Arizona unemployment insurance improper payments

Medicaid improper-payment rates

Can taxpayers trace where the money went?

The state-by-state audit method

How to track open recommendations

The institutions’ responses

What this shows about Democratic governance

What the public record can prove

What is still open

Frequently asked questions

Is this an example of Democratic corruption?

What counts as government waste in an audit?

Is an improper-payment rate a fraud rate?

How many Arizona school districts are at high financial risk?

Examine government waste in your state

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Government waste by state: what the audits show

Key Facts

What counts as government waste?

What the Arizona Auditor General reported

Arizona findings to track

How every state page should classify money

Arizona unemployment insurance improper payments

Medicaid improper-payment rates

Can taxpayers trace where the money went?

The state-by-state audit method

How to track open recommendations

The institutions’ responses

What this shows about Democratic governance

What the public record can prove

What is still open

Frequently asked questions

Is this an example of Democratic corruption?

What counts as government waste in an audit?

Is an improper-payment rate a fraud rate?

How many Arizona school districts are at high financial risk?

Examine government waste in your state