Senator Chuck Grassley (R-IA) has offered an amendment designed to prevent fraud, waste and abuse of federal grant programs. The proposal would amend a bill pending in the Senate which would increase the number of federal grants available for government infrastructure projects administered by state and local governments.
The amendment would:
- Ban government agencies from providing grants to any person or entity that is seriously delinquent with tax debt, including anyone with a lien from the federal government.
- Require that at least 10 percent of federal grants be audited annually for compliance with program requirements.
- Ban for two years any grantee with an unresolved problem based on an audit.
“Federal officials need to make certain due diligence is done on the front end to safeguard tax dollars from grant recipients who are delinquent in paying their taxes. It’s wrong that someone with big unpaid tax bills would be given a federal grant,” Grassley said. “After grants are awarded, federal agencies also need to follow up and make sure recipients of taxpayer dollars meet reporting requirements for how the money is spent.”
Grassley was one of four senators who requested a government report that was released in May. It found that 3,700 contractors and grantees owed $757 million in back taxes, but also received $24 billion in stimulus awards. The study identified 15 cases of individual contractors or grantees involving “abusive or potentially criminal activity.” One construction firm owed nearly $400,000 in back taxes but received a contract worth more than $1 million. One non-profit organization owed more than $2 million from years of unpaid payroll taxes, but received more than $1 million in stimulus funds.
Separately, since last fall, Grassley has worked to get the U.S. Department of Housing and Urban Development (HUD) to pay attention to the waste and abuse of tens of millions of tax dollars by the Philadelphia Housing Authority. The Philadelphia Housing Authority received nearly $370 million in HUD money this year plus an additional $127 million in stimulus funds. “The mess in Philadelphia shows the worst that can happen when the federal government doles out money, but then doesn’t check to make sure that money is used for its intended purpose,” Grassley said.
S.Amdt. 462 was filed to the Public Works and Economic Development Reauthorization bill and would apply to federal grant programs authorized by the Public Works and Economic Development Act of 1965.
