Millions tied up in dormant government accounts, report says - FOX 13 News

Millions tied up in dormant government accounts, report says

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TAMPA (FOX 13) -

Before Congress takes more out of our paychecks, and before it borrows more money from China, you think it would spend the money it already has.

But a General Accounting Office report shows our federal government has been sitting on hundreds of millions of dollars. Government workers have set aside a lot of your money in thousands of bank accounts, then left it there for years.

"This is the most heinous waste of dollars I've seen in a long time," said Chris Cano, a Tampa public administrator and grant applicant. "There is a failure from the bottom-level bureaucrat all the way to the top."

Government inspectors looked into some dormant bank accounts two years ago. They found more than $794 million public dollars bottled up in expired grant accounts.

Federal agencies have been setting aside money for community programs that no longer exist.

"Well, it happens over time in the Congressional process," said U.S. Senator Marco Rubio. "These programs are created. They're abandoned by the agency, but the line item sits in the budget."


LINK: Read the full report here: http://www.gao.gov/assets/600/590926.pdf

 

 


Meanwhile, grant dollars are drying up for non-profit groups across Tampa Bay.

 

"Right now at our shelter, we're turning away about 700 people a year," said Linda Osmundsun. She runs CASA, a domestic violence shelter that recently lost around $300,000 in grants. "Every day I open a newspaper and hope and pray someone I couldn't serve in a shelter isn't dead.

Government inspectors also found more than 28,000 other grant accounts where all the money had been spent. But government workers failed to close the accounts, so agencies are also paying fees on empty accounts for programs that no longer exist.

According to the GAO report, that's 'another' $173,000 a month, or around $2 million a year.

Tampa Bay area CEOs like Ron Sacino say that would never happen in private business.

"Oh it absolutely makes you turn red, because we fight every day to fight any wasted expense," Sacino said.

The Department of Health and Human Services is responsible for a majority of those empty accounts. The Department of Health and Human services did send us an email response stating that it has reduced the amount of money in expired grant accounts.

But as of this month, the agency still has more than $421 million sitting in expired accounts. Over the past two years, it has closed more than $112,000 empty accounts.

According to an Inspector General's report, the accounts stay open because of a lack of staffing and documentation, and inconsistent guidance from management.

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Here are the questions we submitted to the Department of Health and Human Services, with the agency's written responses.

1) How much undispersed grant money (administered by HHS) is currently deposited in accounts that have expired?

The Payment Management System (PMS) identified $421,756,686.64 as of February 5, 2013.  The PMS balance is for open balances on grants paid by PMS regardless of age.  This balance does show a reduction of approximately $174 Million in undispersed grant money since the GAO report.

2) How many accounts (with no balance) have you closed since the GAO report (referenced above) was released?

From FY2010 through the close of FY2012, HHS Closed 112,948 grants.  The yearly breakdown is: 22,009 grants closed in FY2010; 32,275 grants closed in FY 2011; and 53,664 grants closed in FY2012. 

3) - How much are you currently paying per month in fees for unused accounts?

Fees are charged to recover the full cost of running the HHS-owned and operated Payment Management System (PMS) and associated Federal oversight of the cash management process.  This work is funded through a working capital fund whose statutory authorization requires full cost recovery. 

Costs to operate the system are allocated to the agencies that use it based on the number of open grants.  Since dormant grants do not add significantly to the cost of operating the system, closing them out will not reduce the cost of operating PMS. 

Given the number of open grants, the monthly fee is currently $5.42. Currently, there are approximately 8,100 accounts in PMS that may be eligible for close-out; resulting in charges of approximately $44,000 per month to the agencies that issued those grants. 

These rates are periodically adjusted to assure full cost recovery.  An unanticipated increase in the number of open grants would reduce the monthly rate, and a decrease would require an increase in the monthly rate.

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