Feds Use-It-Or-Lose-It Spending Spree

  • A new report from OpenTheBooks found that federal agencies spent almost $100 billion at the end of FY 2018 as they attempted to exhaust their budgets.
  • Headline-grabbing expenditures included lobster and crab, guns and ammunition, and new furniture.
  • Some members of Congress have proposed legislation to curb such year-end spending in the future.

For many federal agencies, September must be the best month of the year. This is when the fiscal year ends and these agencies are free to drain their annual budgets.

The result, according to a report last month from OpenTheBooks.com, one of the largest private databases of government spending in the world, is a government-wide “use-it-or-lose-it” spending spree in which a single week can see larger expenditures than an agency’s typical monthly spending.

In the report, OpenTheBooks analyzed the amount spent on contracts by federal agencies during the last month of FY 2018. This totaled $97 billion, a 16 percent increase from FY 2017 and a 39 percent increase from FY 2015.

The biggest spender was the Department of Defense (DOD) at $61.2 billion, followed by the Department of Health and Human Services at $5.6 billion and the Department of Veterans Affairs at $5.2 billion. In total, 66 agencies got in on the year-end spending action.

In an op-ed for Forbes, OpenTheBooks President Adam Andrzejewski highlighted some of the most egregious examples of this use-it-or-lose-it spending, such as $28.6 million by the Executive Office of the President for things such as office furniture, passenger vehicles, cameras, newspaper subscriptions, and more.

Also concerning was the more than $800 million spent across 15 different agencies for last-minute purchases of guns, ammunition, and other weaponry. Even non-military agencies like the Department of Veterans Affairs, the Office of Personnel Management, the Small Business Administration, and the Environmental Protection Agency still spent more than $100,000 on guns and ammunition.

Perhaps the most headline-grabbing finding was that the DOD originally reported spending $2.3 million on snow crab, Alaskan king crab, and crab legs and claws, as well as another $2.3 million on lobster tail. Agencies also spent almost $300,000 on various cuts of steak.

The prologue of the report raises three notable questions about this pattern of federal spending:

  • Should there be a cap for how much the federal agencies can spend in one month?
  • Should Congress reward agencies that cut their budgets and leave excess funds unspent at the end of the fiscal year?
  • What happens to excess funds that are not spent?

In response, Andrzejewski told Grassroots Pulse in an email that some members of Congress have already proposed several pieces of legislation to curb year-end spending. Senator Rand Paul (R-KY), for instance, has offered legislation that would give bonuses to bureaucrats who cut their budgets.

Andrzejewski said it’s also worth exploring policies that would limit the amount of money agencies can spend in the last two months of the fiscal year to their monthly average over the prior 10 months.

Until such reforms are enacted, where does that currently leave federal agencies’ unspent funds?

“The short answer is that it seems to vary by agency and appropriation,” Andrzejewski said. “Sometimes the left-over money reverts to the general fund at year-end; sometimes the appropriation carries over for a few weeks as long as it is obligated on the fiscal year; sometimes unspent fund balances accrue. It’s complicated and legislative offices and agencies struggle to offer a straight answer. Congress needs to act to create consistency and clarity.”

Read the full report from OpenTheBooks here.

Image Credit: Photo by Daniel Norris on Unsplash

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