Money for nothing

The U.S. government has13,712 bank accounts spread out over the country with nothing in them.

Like many of us with bank accounts with nothing — or nearly nothing — in them, the government is being bled by bank service fees, the Washington Post reports today.


Here is how the government winds up spending money on nothing:

First, a federal agency gives out a grant. It doesn’t just write a check; it creates an account within a large, government-run depository. The grantee can draw money out from there.

Then, at some point, it’s over. The money runs out. Or the grant’s time limit expires. The agency is given notice: It’s time to close the account down.

But that takes work. An agency is first required to audit the account, to make sure the money was spent properly. (In rare cases, some money is returned to the grantee, and the dead account comes alive again.) That’s generally supposed to happen within 180 days.

If it doesn’t happen, however, there is no formal consequence. And so, sometimes, it doesn’t happen.

The government spends almost $900,000 a year on bank fees for accounts that are empty.

  • BJ

    13712 accounts at just 1 hour to close them would take about 342 weeks of work. Or about 8 people a year. “Average” federal salary is about $78,500 – about $628,000 if it only takes one hour to close an account.

    Banks like paperwork almost as much as Government so I’m guessing 1 hour to close an account is actually a reasonable amount of time.

    My biggest question is why can’t the account be closed, then do the audit? I don’t know why an open account would need to exist for an audit to take place.

    The fees average around $5.47 per month per account.