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Looking to highlight government waste, Sen. Tom Coburn (R-Okla.) today released a report that identified more than $70 billion in unspent funds that have languished in federal accounts years after being provided.
The funds remain unspent “as a result of poorly drafted laws, bureaucratic obstacles and mismanagement, and a lack of interest or demand from the community,” Coburn said in the report.
Coburn argued that responsible stewardship of taxpayer dollars is the primary responsibility of government and funds that are not needed, or spent, should be returned.
“The exception to the proverb ‘a penny saved is a penny earned’ is the government, where an unspent dollar represents lost opportunities to reduce the debt or to assist an individual, a family, or a community,” the report said. “Whether fixing crumbling roads and bridges, assisting homeowners with mortgages, providing health care to patients in need, or protecting the security of our nation, this report demonstrates the real challenge is not finding more resources but better managing the available resources.
“A dollar taken from taxpayers left unspent is a dollar not needed by the government or a dollar that did not go to someone in need. It represents a failure to budget wisely, to set priorities responsibly, and to be a good steward of taxpayer dollars.”
The report said that many federal grant programs fail to “close out.”
“Grant closeout is an important final point of accountability for grantees that helps to ensure they have met all the financial requirements and have provided final reports, as required,” the report said, citing the Government Accountability Office. “Closing out grants also allows agencies to identify and redirect unused funds to other projects and priorities as authorized or to return unspent balances to the Treasury.”
The GAO identified nearly $1 billion of undisbursed funds in two different government accounts at the end of last year. This includes $802 million in expired grant accounts in the Payment Management System plus $126 million for which there has been no activity in years in the Automated Standard Application for Payments. ASAP “allows grantee organizations receiving federal funds to draw from accounts pre-authorized by federal agencies,” its website says.
Poorly drafted legislation has also led to unspent funding. The report cites the Emergency Homeowners Loan Program as an example.
“As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act passed by Congress in 2010, $1 billion was set aside to help unemployed homeowners avoid foreclosure through EHLP,” the report said “The program was expected to help as many as 30,000 households. Even though 100,000 applied for the assistance — only 11,832 were conditionally approved before the program ended. Yet, EHLP disbursed just $432 million of the $1 billion approved by Congress.”
“Now, lawmakers and federal housing officials are pointing fingers at each other for the program’s failure to spend more than half-a-billion dollars to assist thousands of struggling homeowners,” the report continued.
The report also said that there are currently $13 billion in federal funds earmarked for highway projects that are unspent, often because of mistakes in the legislation.
One example cited by the report is a $45 million earmark won in 2005 by Senate Majority Leader Harry Reid (D-Nev.) for a magnetic levitation train project between Las Vegas and Primm, Nev. But the project was never built and the funds remain unspent.
“Today, the money still remains unspent and there is a growing likelihood a passenger train between Las Vegas and southern California will not be built,” the report said.
Reid managed to include language in a Senate-passed transportation bill that would allow the Nevada Department of Transportation to use the funds for an airport highway. Republicans unsuccessfully sought to strike the provision, which they labeled an earmark.
The report also noted that nearly $100 million made available to local law enforcement agencies for body armor by the Department of Justice’s Bulletproof Vest Partnership program has not been spent.
Another lauded program that has trouble spending its funding is the Department of Energy’s Initiatives for Proliferation Prevention program, which was created following the collapse of the Soviet Union to ensure out-of-work weapons scientists and engineers were placed in private-sector nonmilitary employment and not hired by terrorist groups or rogue nations to assist in the development of weapons of mass destruction.
According to the GAO, the program “has annually carried over large balances of unspent program funds. Specifically, in every fiscal year from 1998 through 2007, DOE carried over unspent funds in excess of the amount that the Congress provided for the program in those fiscal years,” the report said.
The report also found problems in spending funding to respond to Hurricane Katrina
“I learned more than one-fourth of the $19.7 billion of federal community development disaster recovery funds provided remained unspent five years after the storms,” Coburn said in the report.
The report also said that more than $8 billion of the $35 billion awarded by the Homeland Security Grant Program remained unspent as of January 2012.