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Taxpayer Money Wasted During Year-End Spending Sprees

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WASHINGTON--(BUSINESS WIRE)--

Today, Citizens Against Government Waste (CAGW) is drawing attention to a hearing today at 2:30 p.m. EDT by the House Oversight and Governmental Affairs Subcommittee on Federal Spending Oversight and Emergency Management regarding federal agencies burning through their unused annual funding in the final month of the fiscal year (FY) to avoid budget cuts.

"Spend it or lose it" is a common practice in numerous federal agencies. Bureaucrats tend to spike their rate of spending in the month of September in a given year to avoid the perception that they can function with less taxpayer money and ensure a higher funding level in the upcoming fiscal year.

The hearing will feature testimony from former State Department employee Dean Sinclair, who, like CAGW, has crusaded against these wasteful binges for years. Sinclair defined the problem in CAGW's August 2015 Wastewatcher: "When there is money left in a budget at the end of the year, all federal government managers actively seek ways to spend it. They would prefer to spend it on things they need, but they will spend it on anything." Taxpayers can watch the hearing live or replayed here.

In October 2013, CAGW released a report on the "spend it or lose it" phenomenon that found that key departments "drastically increased spending and the amount of contracts purchased during the final quarter of the year."

For example, from FY 2003-2013, the State Department spent 37.8 percent of its entire annual budget in the month of September. On average, the Department of Health and Human Services burned through more than a quarter of its budget in the final month. This trend is flipped at the beginning of a given fiscal year; the State Department spent, on average, just 1.8 percent of its budget in the month of October.

Even more troubling than the binges themselves are the frivolous purchases made during this time. A few days before the government shutdown in 2013, the State Department spent $5 million for an elaborate Vermont glassblower "to provide 20 different styles of custom handcrafted stem and barware to the State Department for use in American embassies around the world."

"Realizing your department can function in a cost effective manor should not be viewed as cause for a wasteful spending spree," CAGW President Tom Schatz said. "Rather, using less taxpayer money should be incentivized and rewarded," he said.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

Citizens Against Government Waste
Curtis Kalin, 202-467-5318

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