The US secret intelligence gathering systems have grown so much since 9/11 that no-one knows their exact cost, nor size, the Washington Post reports.
The newspaper says the system is now so massive and unwieldy that it is impossible to determine its effectiveness in keeping the US safe.
The report, Top Secret America, follows a two-year investigation by the paper.
Acting US intelligence chief David C Gompert has dismissed the picture painted by the report as inaccurate.
"The reporting does not reflect the intelligence community we know," Mr Gompert said in a statement.
"We accept that we operate in an environment that limits the amount of information we can share. However, the fact is, the men and women of the intelligence community have improved our operations, thwarted attacks, and are achieving untold successes every day."
Before the report was published, the White House told the Washington Post it knew about the problems within US intelligence gathering and was trying to fix them.
The report says the growth of the security industry - with billions of dollars of contracts farmed out to various government agencies and private contractors - has resulted in an unwieldy system lacking in oversight and with high levels of redundancy and waste.
According to the Washington Post:
- Nearly 2,000 private companies and 1,270 government agencies are involved in counter-terror work at 10,000 locations across the country
- Some 854,000 US citizens have the highest level of security clearance
- A fifth of the US government's anti-terror organisations have been created since the September 2001 attacks
- More than 250 security bodies have been created or restructured since 9/11
- More than 30 complexes with 17m sq ft of space (1.6m sq m) have been built for top-secret intelligence work in the Washington area since the attacks
- Various agencies publish so many reports that they are often ignored by officials
Intelligence failures that allowed the September 2001 attacks to happen have produced the regular refrain that the American intelligence community had "failed to join up the dots", says the BBC's defence and security correspondent, Nick Childs.
US intelligence and surveillance systems have changed dramatically since those attacks, with reforms - such as the creation a Directorate of National Intelligence to oversee some 16 agencies in the intelligence community - and a massive injection of resources.
US officials insist these reforms have led to significant improvements.
But recent incidents - such as the failed Detroit airliner bombing in December and the failed Times Square attack on New York in May - have exposed continuing weaknesses, and failures still to "join up the dots", our correspondent adds.
Defence Secretary Robert Gates said the bureaucracy of US intelligence gathering had not become unmanageable, but that it was sometimes hard to get precise information.
"There has been so much growth since 9/11 that getting your arms around that - not just for the DNI [Director of National Intelligence], but for any individual, for the director of the CIA, for the secretary of defence - is a challenge," Mr Gates told the newspaper.
Last month, President Barack Obama nominated retired Gen James Clapper, a top Pentagon official, to replace Adm Dennis Blair as his next intelligence chief.
Adm Blair resigned as director of national intelligence (DNI), apparently because of internal administration battles.
The DNI was heavily criticised in a report by the president's Intelligence Advisory Board which said it was overstaffed and dysfunctional.
Gen Clapper faces a Senate confirmation hearing this week at which some of the issues raised in the Washington Post are bound to be aired, says our correspondent.
Top Secret America was compiled by Pulitzer Prize-winner Dana Priest and some two dozen reporters, and is being published in three instalments this week.
Priest told BBC World News America that the number of organisations and people at the "secret" level "was just too big to count".
The Washington Post said its investigation was based on government documents, public records and hundreds of interviews with intelligence, military and business officials and former officials.
Most of those interviewed requested anonymity because they were not allowed to speak publicly, or because they feared retaliation at work, the newspaper said.
BBC World News America is broadcast weeknights at 7pm ET on BBC America and BBC World News.