U.S. government wasting $890,000 this year on empty bank accounts

This week, a budget watchdog group discovered that the federal government is spending $890,000 on nothing. In a report published Wednesday, Citizens Against Government Waste (CAGW) found that the government is wasting the large sum of money on bank accounts that have zero dollars in them.

According to the organization, there are 13,712 such accounts. Bureaucrats were supposed to shut them down but the paperwork has not been filed as of yet. Despite the government complaining about the reduction in the rate of increased spending (sequester), taxpayers will be on the hook for $65 per year for each account on these empty accounts.

Over the years, the U.S. has spent both large and small funds on highly questionable items, but this may be one of the latest boondoggles by Washington. Thomas A. Schatz of the watchdog group told the Washington Post that if anyone had an empty bank account and paying a monthly fee they would quickly close it.

“It’s just lack of attention to detail. And poor management,” Schatz said. “And, clearly, the fact that no one gets penalized for paying money to keep the accounts open.”

Essentially, these bank accounts were designed for grants given to individuals or entities by federal agencies. The government establishes the account so the guarantee can withdraw money at anytime. The agency is charged with the monthly fee and the government depository pays the costs. Once the money is gone the agency is then given notice that the account is at a zero balance.

It was reported last year that officials in the President Obama administration urged federal agencies to immediately end this practice. Earlier this year, the administration proposed measures to enhance oversight and management of bank accounts.

“We have worked with agencies to improve the timely closeout of grants,” said Danny Werfel, the Office of Management and Budget controller, said in an email to the news organization. “Agencies have made noteworthy progress so far, with the number of zero balance accounts falling by more than 50 percent since the end of fiscal year 2011.”

In 2011, the total number was approximately 28,000.

These are not new problems in Washington. Government waste is as old as sliced bread and past examples prove this. Economic Collapse News reported last year of how nine agencies wasted more than $1.1 million on Apple iPods, plaques, souvenirs, lapel pins and other frivolous items.

Spending on nothing is quite costly to the taxpayers. The CAGW cited a report from the Government Accountability Office (GAO) that found there are seven percent of 202,000 government grant accounts with zero balances. The service fees end up costing $2.1 million each year.

Although many might consider these figures pittance to the overall multi-trillion-dollar federal budget, it’s an example of how bureaucrats have to get their spending under control. Furthermore, it’s another instance of how if the government is given even more revenue from the taxpayers then it could just very well go to wasteful endeavors like today’s report.

Be sure to check out ECN’s list of examples of how governments across the U.S. have already wasted your money in the first quarter of the year.

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