Reducing Undisbursed Balances in Expired Grant Accounts

During calendar year 2006, about $1 billion in undisbursed funding remained in expired grant accounts in the largest federal civilian payment system—the Payment Management System, administered by the Department of Health and Human Services, which accounts for about 70 percent of all federal grant disbursements. In addition, many past audits of federal agencies by GAO and inspectors general have suggested that undisbursed balances in expired grant accounts were a long-standing challenge. Given the federal governments' constrained fiscal position, it seems appropriate to minimize these amounts. In 2008, GAO recommended that the Director of the Office of Management and Budget instruct executive departments and agencies to annually track the amount of undisbursed grant funding remaining in expired grant accounts and report on the status and resolution of such funding in their annual performance plan and Performance and Accountability Reports. In commenting on GAO's report, the Office of Management and Budget said it supported the intent of the recommendations but did not commit to implementing them through its grants management guidance.

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Grants Management: Attention Needed to Address Undisbursed Balances in Expired Grant Accounts

GAO-08-432, August 29, 2008

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