WASHINGTON – Last night, President Obama signed into law S. 1115 The Grants Oversight and New Efficiency (GONE) Act. U.S. Senators Deb Fischer (R-Neb.) and Joe Manchin (D-W.Va.) reintroduced this bipartisan legislation in April of 2015 and it passed the Senate in December of last year. 

The new law will save taxpayer dollars by providing additional oversight over the financial accountability of federal grant programs. It will also require agencies to close out expired grant accounts with zero dollar balances and the remaining undisbursed funding. 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. 

Senator Fischer released the following statement:

“I’m pleased to see the GONE Act signed into law. Through teamwork and bipartisan common sense, I was proud to join Senator Manchin and Senator Johnson to target government waste and find some relief for taxpayers. This is a small but important first step in our effort to ensure taxpayer dollars are spent wisely and efficiently in the federal grant process.” 

Senator Manchin released the following statement:

“Signing this bill into law is a significant step toward getting our financial house in order, which continues to be a top priority of mine. Our taxpayer dollars should be spent on programs and grant opportunities that actually support the American people, not on administering empty grant accounts that help nobody. I am proud to have worked with Senator Fischer and Senator Johnson on getting this commonsense, bipartisan legislation that addresses our government’s wasteful spending passed through Congress and to the President’s desk.”

Senator Ron Johnson released the following statement:

“One of our goals for the Homeland Security and Governmental Affairs Committee 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. I was happy to work with Senators Fischer and Manchin on this legislation, and was glad to see the House move so quickly to pass this bipartisan, common-sense measure. The GONE Act being signed into law is a step towards accomplishing the Committee’s goal to ensure taxpayer dollars are not wasted.”

The federal government expends more than $500 billion annually on federal grants. The GONE Act provides greater enforcement of existing grant closeout guidance (2 CFR Chapter 2 §200.343). 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 as to whether taxpayer dollars were spent properly.

In 2012, a Government Accountability Office (GAO) report evaluated grant closeout delays for two major grant management systems. For example, 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 requires 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 then have one year to confirm that they have closed out all expired grants. Additionally, the Inspector General of an agency receiving over $500 million in annual grant funding is required to conduct a risk assessment to determine if an audit or review of the agency’s grant closeout process is necessary.

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 S. 1115:

[if !supportLists]·         [endif]Citizens Against Government Waste

[if !supportLists]·         [endif]National Taxpayers Union

[if !supportLists]·         [endif]Americans for Tax Reform

[if !supportLists]·         [endif]Taxpayers for Common Sense

[if !supportLists]·         [endif]Taxpayers Protection Alliance

Click here to view text of S. 1115 The GONE Act. 

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