Uncle Sam spending $890,000 on ... nothing

The feds have about 13,700 empty bank accounts thatstill charge service fees.

THE WASHINGTON POSTApril 25, 2013 

WASHINGTON - If you are a federal worker on furlough this week - or an airline passenger delayed by federal furloughs - you might save your blood pressure and go read another story.

It is one of the oddest spending habits in Washington: This year, the government will waste at least $890,000 on service fees for bank accounts that have nothing in them. At last count, Uncle Sam has 13,712 such accounts, each containing zero dollars and zero cents.

These are supposed to be closed. But nobody has done the paperwork.

So even now - as the sequester budget cuts have begun idling workers and frustrating lawmakers and travelers - the government is still required to pay $65 per year, per account, to keep these empty accounts on the books.

In this time of austerity, these accounts are a reminder of something that makes austerity hard: expensive habits, built into the bureaucracy in times of plenty. The Obama administration has spent the last year trying to close these accounts, with some success.

But only some.

"If anyone had kept open a bank account with no money, and was getting a charge every month, they would do everything they could to close it," said Thomas A. Schatz, of the watchdog group Citizens Against Government Waste.

But the government hasn't shown the same kind of urgency with taxpayers' money. "It's just lack of attention to detail. And poor management," Schatz said.

The money spent on these empty accounts is - of course - a tiny fraction of the federal budget. But in its own way, it is something special: Washington's perfect waste, a rare specimen of cost untainted by any reward.

The Pentagon once paid $435 for a hammer, after all. But at least it got a hammer.

Here, when the money is spent, "there's no benefit whatsoever," said Sen. Tom Coburn, R-Okla., who has joined Sen. Thomas Carper, D-Del., in pushing the Obama administration to close these accounts faster.

Obama administration officials say they're trying. Last year, the Office of Management and Budget urged agencies to crack down on these "zero balance" accounts. And this year, it proposed a wide-scale effort to improve the oversight of such accounts.

Here is how it happens:

A federal agency gives out a grant. It doesn't just write a check; it creates an account. The grantee can draw money out.

The money runs out or the grant's time limit expires. But closing the account takes work. An agency must audit the account to make sure the money was spent properly. In rare cases, money is returned and the dead account comes alive again. If that doesn't happen, there isn't any formal consequence on what to do with the empty account.

And so nothing gets done.

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