Washington, D.C. – U.S. Senator Deb Fischer (R-Neb.) announced today that she has introduced legislation to close out thousands of expired grant accounts, which cost taxpayers hundreds of thousands of dollars each year. The Grants Oversight and New Efficiency (GONE) Act would require agencies to close out expired, empty grant accounts. It would also require federal agencies to identify exactly why those accounts were never closed in the first place. The bipartisan legislation is cosponsored by Senator Joe Manchin (D-W.V.). 

Specifically, the GONE Act would require the Council of the Inspectors General on Integrity and Efficiency to submit a report to Congress and agency heads detailing all expired, empty grant accounts, which must be closed within six months after the report is submitted. Afterwards, agencies would be required to update the council within three months on whether the grant accounts actually were closed. To ensure accountability, the council must also submit a follow up report to Congress and the committees of jurisdiction on the status of grant accounts identified for closure.

“To literally spend money on nothing is a new height of government waste,” Senator Fischer said. “The GONE Act will stop the federal government from throwing away the money of hardworking taxpayers, while increasing government accountability – a top priority of mine. This legislation addresses just a snapshot of wasteful spending, but it proves decades of Washington’s fiscal malpractice have produced plenty of fat to trim.”

“Fixing America’s finances and getting our financial house in order has always been a top priority for me, especially when we can cut waste, fraud and abuse,” Senator Manchin said. “It is truly remarkable how much our great nation can save if our federal government cuts the fat and not the muscle from many of our programs, especially ones that are no longer serving the American people. Our taxpayer dollars should be spent on programs and grant opportunities that actually support the people who we as Americans value most – including our children, veterans and seniors – not on administering empty grant accounts that help nobody. I thank Senator Fischer for leading this commonsense effort to address head-on our government’s wasteful spending.”

In April 2012, the Government Accountability Office (GAO) released a report entitled, “Grants Management:  Action Needed to Improve the Timeliness of Grant Closeouts by Federal Agencies,” which examined the largest civilian payment system for grants, the Payment Management System (PMS).  The GAO report evaluated the grant closeout process, and detailed the taxpayer costs for closeout delays of expired grants accounts with an empty balance:

  •  “…PMS users 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” (Page 19).
  • “Overall, the total charges for all expired grants with a zero dollar balance would represent roughly $2 million in fees if agencies were billed for these accounts for the entire year” (Page 19)
  • “We found roughly 9,770—about 34 percent—of the expired grant accounts with no undisbursed balances remained open 3 or more years past the grant expiration date” (Page 19).
On April 24, 2013, The Washington Post reported, “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.”

Rep. Ann McLane Kuster (N.H.-2) has introduced similar legislation in the House of Representatives, the CLEAN Act (H.R. 1856).

NOTE: Full text of the legislation is available HERE.