WASHINGTON, D.C. – President Obama signed into law Senator Joe Manchin’s (D-WV) bipartisan bill to save taxpayer dollars by providing additional oversight over federal grant programs on Thursday, January 28. The Grants Oversight and New Efficiency (GONE) Act, which was reintroduced by Senator Manchin and Senator Deb Fischer (R-NE) last April, will require agencies to close out expired grant accounts with zero dollar balances and undisbursed funds remaining. These expired accounts cost taxpayers millions of dollars each year. Senator Ron Johnson (R-WI), chairman of the Senate Homeland Security and Governmental Affairs Committee, also cosponsored the bill.
“Signing this bill into law is a significant step toward getting our financial house in order, which continues to be a top priority of mine,” Senator Manchin said. “Our taxpayer dollars should be spent on programs and grant opportunities that actually support the American people, not on administering empty grant accounts that help nobody. I am proud to have worked with Senator Fischer and Senator Johnson on getting this commonsense, bipartisan legislation that addresses our government’s wasteful spending signed into law.”
With more than $500 billion spent annually on federal grants, the GONE Act would provide greater enforcement of existing grant closeout guidance (2 CFR Chapter 2 §200.454). This guidance reminds agencies to close out grants within 90 calendar days after the end date of the period of performance. Tardy grant closeouts delay the determination of proper taxpayer dollars expenditure.
In 2012, a Government Accountability Office (GAO) report evaluated grant closeout delays for two major grant management systems. For example, GAO found that users of the Payment Management System “were charged a total of roughly $173,000 per month to maintain the more than 28,000 expired grant accounts with zero dollar balances listed on the yearend closeout report.”
The GONE Act will require the Office of Management and Budget to direct federal agencies to coordinate with the Department of Health and Human Services (HHS) to submit a report to Congress that identifies remaining expired grants. HHS was charged with leading a previous effort that closed out thousands of expired grants. Following the submission of this report to Congress, agencies will then have one year to confirm that they closed out all expired grants. Additionally, the inspector general of any agency receiving over $500 million in annual grant funding will be required to conduct a risk assessment to determine if an audit or review of the agency’s grant closeout process is necessary.