According to the Department of National Security, the immigrants who obtained the papers were not identified yet, but one of the officials revealed that they are originally from countries that present a high threat to US and where the immigration rate is at its highest.
The report says those immigrants used a different name in their citizenship applications.
"This situation created opportunities for individuals to gain the rights and privileges of US citizenship through fraud", Inspector General John Rothsaid in a statement.
The report says some 148,000 sets of fingerprints are yet to be digitized into Federal Bureau of Investigation and DHS databases.
The DHS admits that this shows a larger problem for officials-the fact that numerous older paper-based records with fingerprint info can't be searched electronically-but that immigration authorities are working on uploading the files now and that they'll review "every file" of those flagged as possible frauds.
More than 800 immigrants who were supposed to be removed from the country have instead become USA citizens.
ICE officials told auditors the agency hadn't pursued many of these cases in the past because federal prosecutors "generally did not accept immigration benefits fraud cases".
It is believed the blip occurred as the old paper records were not added to fingerprint databases and ICE, the agency responsible for deporting illegal immigrants, did not consistently add digital fingerprint records to immigrants whom agents found since 2010.
Those U.S. citizens may end up being de-naturalized, depending on a review recommended by the report.
That leaves about a 20-year gap, where the system wasn't updated.
In his final address before the United Nations Tuesday, President Obama took a very public pot shot at American conservatives over the issue of immigration, accusing the "far right" of fearing "outside contamination" by immigrants and rejecting the "common humanity" of the global populace.
The discrepancies weren't caught because their fingerprints were missing from government databases. As an explanation, Homeland Security pointed in a statement to the difficulty of updating computer files with paper-bound fingerprints.
"At least three [people granted citizenship] were found to have been conducting security-sensitive work at airports or maritime facilities". "Since being identified, all have had their credentials revoked". A fourth person is now a law enforcement official, the audit said, without adding further information.
The report noted that the department has concurred with its recommendations and has begun implementing corrective actions.