The Money Pits


As the recent scandals at the Department of Housing and Urban Development show, the amount of waste, fraud, and abuse in the federal government remains constant from administration to administration. But far more common than theft or bribery are the billions of tax dollars that disappear simply because government accountants have no idea how the money is spent.

Recently the Office of Management and Budget compiled a list of 76 "high-risk areas" in the federal government which they believe might be sources for future scandals. The list, released by Sen. John Glenn (D–Ohio), reveals that:

• The Department of Agriculture has no idea where $609 million worth of food stamps are or who is using them.

• "Inadequate controls" on contractors in the Department of Defense mean that these contractors may easily be able to steal $56.5 billion worth of government property in their possession.

• The Environmental Protection Agency's accounts don't balance 40 percent of the time, and other financial controls (particularly in the Superfund cleanup program) are "often inaccurate and unreliable."

• HUD doesn't know who gets federal housing subsidies or whether all recipients qualify to receive these benefits. In addition, many of the people getting mortgages from HUD to purchase single-family homes are "actively trying to defraud the government." OMB believes that most of the $2 billion lost by this loan program in fiscal year 1988 "was attributable to program fraud and abuse."

• The Department of Education doesn't know whether the billions it spends on aid to disadvantaged students in fact goes to poor people.

The General Accounting Office has also prepared a list of government waste. According to the GAO, "inadequate financial controls" assured losses (most of which were pure waste) of $10 billion to $20 billion in foreign military sales; $12 billion from the Commodity Credit Corp.; $6 billion at the Export-Import Bank; and $4 billion in the Department of Veterans Affairs.