Government spending almost $900k a year for empty bank accounts

Sarah Hofmann Contributor

The federal government is currently paying nearly $900,000 annually in maintenance fees for bank accounts that are sitting empty. The 13,712 accounts are opened to provide grant money, but often, when the grants are used up the accounts don’t always get closed, The Washington Post reports.

The grant accounts aren’t closed out immediately because most require an extensive audit before shutting them down. In the case of security and complex construction projects, it could be years before an empty account is closed.

Republican Sen. Tom Coburn and Democratic Sen. Tom Carper have been pushing the Obama administration to stay on top of the issue. The Government Accountability Office is also urging quicker processing of the accounts, which cost $5.25 a month to stay open. “Agencies paying fees for expired accounts with zero dollar balance are paying for services that are not needed,” the group said in a statement.

“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 Citizens Against Government Waste President Thomas A. Schatz. “It’s just lack of attention to detail. And poor management. And, clearly, the fact that no one gets penalized for paying money to keep the accounts open.”

Government officials, however, are not optimistic that the process will ever be fool proof. Nancy Gunderson, who oversees grants in the Department of Health and Human Services says, “These accounts are a normal part of the grants business cycle and will never be totally eliminated.”

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