Manchin-Fischer bill would save taxpayer dollars by closing expired grant accounts
WASHINGTON, D.C. — On Friday, the U.S. Senate unanimously passed The Grants Oversight and New Efficiency (GONE) Act, bipartisan legislation to save taxpayer dollars by providing additional oversight over the financial accountability of federal grant programs.
The bill, which was reintroduced by Senators Joe Manchin, D-W.Va., and Deb Fischer, R-Neb., in April, would require agencies to close out expired grant accounts with zero dollar balances and undisbursed funding remaining. These expired accounts cost taxpayers millions of dollars each year. Senator Ron Johnson, R-Wis., chairman of the Senate Homeland Security and Governmental Affairs Committee, is also a cosponsor of the bill.
“One of my top priorities has always been getting our financial house in order and fixing America’s finances, especially when we can cut waste, fraud and abuse,” Manchin said. “Our taxpayer dollars should be spent on programs and grant opportunities that actually support those who need it most — like our children, veterans and seniors — instead of administering empty grant accounts that help nobody. It’s remarkable how much this country can save when the federal government cuts wasteful spending that no longer serves the American people efficiently. I am pleased to have worked with Senator Fischer to get this bipartisan legislation passed to address head-on our government’s wasteful spending.”
“While tales of government waste are all too familiar, government spending on literally nothing appears to be a new low. The GONE Act takes significant steps to close out these long expired grants and identify why they were never closed in the first place. The American people deserve more accountability from the federal government, and I hope we can soon send this bill to be signed into law,” Fischer said.
“One of our goals for the Homeland Security and Governmental Affairs Committee this year has been to pass legislation that identifies and eliminates duplication, waste, fraud and abuse in the federal government. The GONE Act directs federal agencies to close thousands of empty and expired accounts, previously used to distribute grants, that now are only collecting account fees. This is an opportunity to save American taxpayers millions of dollars per year. I was happy to work with Senators Fischer and Manchin on this legislation, and I hope the House moves quickly to pass this bipartisan, common-sense measure in the new year,” Johnson said.
With more than $500 billion expended annually on federal grants, the GONE Act would provide greater enforcement of existing grant closeout guidance (2 CFR Chapter 2 §200.454). This guidance reminds agencies to close out grants within 90 calendar days after the end date of the period of performance. Tardy grant closeouts delay the determination of proper taxpayer dollars expenditure.
In 2012, a Government Accountability Office (GAO) report evaluated grant closeout delays for two major grant management systems. For example, the GAO found that users of the Payment Management System “were charged a total of roughly $173,000 per month to maintain the more than 28,000 expired grant accounts with zero dollar balances listed on the yearend closeout report.”
The GONE Act would require the Office of Management and Budget to direct federal agencies to coordinate with the Department of Health and Human Services (HHS) to submit a report to Congress that identifies remaining expired grants. HHS was charged with leading a previous effort that closed out thousands of expired grants. Following the submission of this report to Congress, agencies would then have one year to confirm that they closed out all expired grants. Additionally, the inspector general of any agency receiving over $500 million in annual grant funding would be required to conduct a risk assessment to determine if an audit or review of the agency’s grant closeout process is necessary.
In June, the Senate Homeland Security and Governmental Affairs Committee approved the GONE Act. The House of Representatives passed a version of the bill in September. Following Senate passage, the bill faces final approval by the House before it can head to the President to be signed into law.
The Washington Post reported on these grant accounts in April of 2013:
“It is one of the oddest spending habits in Washington: This year, the government will spend at least $890,000 on service fees for bank accounts that are empty. At last count, Uncle Sam has 13,712 such accounts with a balance of zero. They are supposed to be closed. But nobody has done the paperwork yet.”
The following organizations have endorsed the GONE Act: Citizens Against Government Waste, National Taxpayers Union, Americans for Tax Reform, Taxpayers for Common Sense, Taxpayers Protection Alliance.