Justice Dept. has blown $100M on faulty grants: IG

The Department of Justice has squandered as much as $100 million in taxpayer dollars over the past five years by issuing grants to duplicative organizations or to programs that don’t follow through on the promises, programs, and compliance requirements tied to their receiving the funds.

“There is virtually no visibility on how grant funds are actually used by the recipients,” said Michael Horowitz, the inspector general at the U.S. Department of Justice, in testimony before the House Judiciary Committee Tuesday. “Unless there is an OIG audit or investigation, or the granting agency dedicates resources to collect and analyze accounting information from a recipient, the government and taxpayers are virtually in the dark regarding how grant funds were actually used.”

Last year, Big Brothers and Big Sisters of America was questioned on their use of more than $19 million of the $23 million they received in grant money. An inspector general report at the time recommended the $4 million in unused funds be put to better use and froze funds to the organization. Big Brothers and Big Sisters is working on better compliance with the agency and is undergoing a second review, Mr. Horowitz said.

Weeks after the Big Brothers and Big Sisters discovery, the inspector general issued a second report questioning another grantee’s use of almost $1 million in youth mentoring grant money.

“The continued listing of grant management as a top management challenge reflects the size, scope, complexity, and associated risks of mismanagement of the numerous grant programs administered by the department,” said Bob Goodlatte, Virginia Republican, who chairs the Judiciary Committee. “As with many other aspects of government, these grant programs are not always designed or administered as efficiently as they should be — which means that less money is actually sent to help with boots on the ground.”

There needs to be better communication among the inspectors generals’ offices across the federal government so that each department is aware of which organization has abused grant money so that additional government funds aren’t paid to them, Mr. Horowitz said. The Justice Department has been identifying high-risk grantees, placing restrictions on their funds and suspending them from further awards where appropriate, he said.

Better coordination among department agencies and a more streamlined grant awarding and reporting process will help improve the department’s catching and suspension of potential fraudsters so that fewer of them fall through the cracks, he said.

Over the past five years, the Justice department has awarded about $17 billion in grants to thousands of governmental and nongovernmental recipients. From fiscal 2009 to 2013 the OIG opened 109 grant-related investigations that resulted in 12 convictions and $1.6 million in recoveries.