GAO Report Finds Millions in Federal Grants Money Unspent and Potentially Vulnerable to Waste and Fraud

Press Release

By:  Thomas Coburn
Date: May 18, 2012
Location: Washington, DC

U.S. Senator Tom Coburn (R-Okla.) today highlighted the findings of a recent Government Accountability Office (GAO) report -- Grants Management: Action Needed to Improve the Timeliness of Grant Closeouts by Federal Agencies (GAO-12-360). The GAO found over $794 million in federal grant money that had been authorized and appropriated by federal agencies yet remained unspent for years.

"Every Member of Congress should be embarrassed after reading this report," said Senator Coburn. "At a time when our national debt has exceeded the size of our economy, there is no excuse for Congress to stand by and watch while agencies fail to recover millions of dollars through expired grants. Earlier this year, GAO gave us another reality check by exposing 253 duplicative and overlapping grants administered by the Department of Justice. My hope is this report will reinforce how crucial it is to audit existing grants, close expired accounts, and end the reckless habits that are robbing taxpayers and hurting our economy."

In its report, GAO identified more than 10,000 federal grants that remain open even though the spending deadline for the grant had expired. The GAO valued these unspent federal grant monies at $794 million. Examples from the study include nearly $100,000 set aside for the Department of Interior's Fish and Wildlife agency for programs authorized under the Sportfishing and Boating Safety Act. The authority for the federal grant expired on June 30th, 2005, yet according to GAO's finding $99,843 from the initial grant remains unspent. Another example found by GAO was $159,534 set aside for the Department of Homeland Security's Emergency Preparedness and Response agency for Map Modernization Management Support. The GAO found that these funds remained unspent despite the authority for the grant expiring on September 30, 2005.

According to the GAO, failure to close a grant account could "allow grantees to continue to draw down federal funds in the payments system even after the grant's period of availability to the grantee has ended." The GAO also said that agency failure to properly close and audit leaves the expired grants "more susceptible to waste, fraud or abuse."

The report found that a large number of these expired grants are years past expiration, even though federal agencies should have closed out the accounts within three to six months after the end of the grant period. For example, the GAO found $204.6 million remained in a number of grants, three to five years past expiration, and some grant accounts were still open 10 years past expiration. Further, unexpended grants funds should be returned either to the agency or the Treasury after the grant period has ended.