Empty bank accounts: A prime example of government waste

Today the news comes to us from the Washington Post that this year, the federal government will spend
$890,000 on fees for 13,712 empty bank accounts.

I’ll let that sink in. You probably have to read it a couple more times, as it makes no sense the first time. Ok, done? No? Still don’t understand? Yeah, me neither. So let’s review.

The federal government, not including state and local governments, just the federal government, has 13,712 bank accounts. No, I’m sorry, not even that. It has way more accounts than that. Those are just the ones that are…yes…empty. There are actually 202,000 of these accounts that pay out federal grants, and 7% of them are empty, but still open and costing $65 per year to remain so.

Now…I realize your head has either already exploded or at least begun leaking fluid from any of several orifices by now, but stay with me. This is important.

Every time the federal government awards a grant, it opens a bank account. Given the obscene number of grants awarded, one would think that a new bank account for each one would be absurd. And one would of course be correct. But the federal government operates on the premise of absurdity, not in spite of it. Instead of just writing a check for the grant amount, issuing a prepaid debit card, or using one massive account for all of them, someone decided it would be a better idea to open a new account for each one. And not just any old account you can throw some money in and ignore. An account that costs $65 a year. And 202,000 of them.

To his credit, President Obama issued an order last year that agencies should start closing these accounts. The problem is, there was no followup. Some did, others didn’t. And that’s even more insane. That there are still 13,712 empty accounts after many agencies and departments looked into it and closed some.

So we know this problem will cost taxpayers $890,000 this year ($2.1 million the year before!), but how much is that really? In 2010, the average federal income tax paid was $6,660. If roughly equivalent to this year, that means that the tax returns of more than 133 people were completely wasted on this ridiculous accounting blunder (over 315 the year before). Yes, it’s a small number, but it’s symbolic of the waste, fraud, abuse, and gross mismanagement of the unwieldy federal government.

Adding more painfully ironic salt to the wound is that the Government Accountability Office, the agency that monitors waste and fraud, actually took the time to issue a 55-page report on this problem last year (which prompted Obama’s order). A simple five-word tweet would have sufficed:

“This is insane. Fix it.”
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s