Tags: obama | empty | bank | accounts

Empty Bank Accounts Costing Government $890,000 a Year

Thursday, 25 Apr 2013 01:15 PM

By Sandy Fitzgerald

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The government is spending at least $890,000 a year in service fees on empty bank accounts because the Obama administration has had limited success in closing them.

The government's 13,712 empty accounts, which were set up to handle everything from temporary grant projects to emergency programs, are left over from years past, reports The Washington Post. Apparently, the paperwork and audits required to close them just hasn't been done.

As a result, the government pays $65 per year, per account, to keep all of them active.
“It’s just lack of attention to detail. And poor management,” said Thomas A. Schatz, with the watchdog group Citizens Against Government Waste. “And, clearly, the fact that no one gets penalized for paying money to keep the accounts open.”

Oklahoma GOP Sen. Tom Coburn and Delaware Democratic Sen. Thomas A. Carper have been pushing the administration to close out the empty accounts faster. In addition, the Office of Management and Budget last year urged agencies to close out empty accounts, and this year, sought a wider-scale push to solve the problem.

At one point, there were more than 28,000 empty accounts, racking up a total of $2.1 million in fees every year, according to the Government Accountability Office.

The accounts are opened whenever a federal agency or department issues a grant or sets up a temporary program that has to be monitored and audited. Instead of just writing a check, the agency creates an account in a government-run depository, from which the grant recipient withdraws the money. The agency is then charged a monthly fee to cover the costs of operating the account.

When the grant's time limit expires or the money runs out, the agency is supposed to close the account, But that requires a lot of effort, usually involving a long audit process.


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