Table of Contents
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul, chairman of the Federal Spending Oversight Subcommittee, released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
How often have you wondered how taking a “selfie” and other pictures impacts your happiness? Thanks to a $500,000 National Science Foundation grant, taxpayers helped researchers at the University of California, Irvine find out.
Today’s “Waste Report” details the results. You can find it HERE or below.
***
Selfies, pictures of food, a beautiful sunset … we see them all over social media. While these pictures might make us smile, does taking them actually make us happier? That is a question you paid a group of researchers at the University of California, Irvine to answer.
The study, released earlier this year, found that taking pictures with your smartphone can actually make you happier and, in some instances, more calm.[1] What probably will make you less happy and calm is that this study was partially funded by a $500k National Science Foundation grant - your tax dollars.[2]
Instead of using existing technology, the researchers developed two smartphone apps (one overlaid the other) for participants to take photos and record their moods. This resulted in 17.5 percent of participants dropping out of the study in the first week due to “system incompatibility issues.”[3] That probably made no one happy.
Nonetheless, could it be that pulling out your phone and snapping pictures is the secret to happiness? Well, not so fast. You cannot just take any picture - it seems the key to happy snapping (at least based on this study) is taking pictures of happy things. Who knew?
The study broke participants up into three groups who, for three weeks, took pictures of themselves smiling, things that made them happy, or, for the third group, things they thought would make someone else happy (which they then sent to that person). Not surprisingly, taking happiness-focused pictures showed a positive effect on all three groups’ moods.[4]
One might not expect that if you told someone to drive to a place that makes them happy every day for three weeks, and that person showed an improvement in their mood, you could conclude driving makes people happy. So, what happens when happiness is not in the frame (pun intended)? We do not know. In fact, the study did not include a control group of participants taking random pictures or even selfies where they did not intentionally smile.
Regardless of this flaw in the research, one has to wonder if selfie studies are really the kind of research your tax dollars should be spent on.
So, if this has made you less happy, sit back, smile, and take a selfie…it might help…but probably not.
###
[1] https://psywb.springeropen.com/articles/10.1186/s13612-016-0044-4
[2] NSF grant number 1218705 https://federalreporter.nih.gov/Projects/Details/?projectId=70709&itemNu...
[3] https://psywb.springeropen.com/articles/10.1186/s13612-016-0044-4
[4] Ibid
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul, chairman of the Federal Spending Oversight Subcommittee, released the latest edition of “The Waste Report,” an ongoing project cataloguing egregious examples of waste within the U.S. government.
This week’s special, two-page Report features a $2.9 million hit to the taxpayers, a land deal where one person became “the seller, buyer, financer, and payer,” and a series of events that a fiction publisher might even reject for being too ridiculous.
You can read the entire, shocking story in this week’s “Waste Report” HERE or below.
***
In 2005, the private, non-profit Hope Academy (Hope) in coastal Mississippi suffered flooding caused by Hurricane Katrina’s storm surge. Hope was eligible for federal Public Assistance grants to rebuild. However, as the Inspector General for the Department of Homeland Security details in a recent report, with the federal taxpayers footing the bill, Hope wanted more.[1] Through unsupported claims, unethical deals, and multiple appeals, almost 10 years after Katrina, the taxpayer is currently out $2.9 million.
The Federal Emergency Management Agency (FEMA) would have paid to mitigate the damages to the Hope Academy and elevate their building. However, Hope claimed rebuilding its original facility would be inadequate for it to service 90 students, its K-12 enrollment prior to the storm. Instead of rebuilding its 5,770 sq. ft. building, Hope claimed it now needed a new 13,319 sq. ft. (about 2.3 times larger) facility.[2] Of course, had the storm not hit, they presumably would have served those students in the old building. Nonetheless, after some back and forth, including appeals to the regional FEMA office, FEMA eventually agreed in 2010 to pay for the larger school.
Upon gaining approval for a larger school building, Hope then claimed its 2/3rds of an acre lot was just too small and asked the taxpayers to pay an additional $1.4 million for a new 16-acre property (we will come back to this).[3]
Were there 90 students?
The larger facility and the new property were all predicated on an enrollment of 90 students at the time Katrina hit, a claim the IG questioned and asserted Hope never sufficiently demonstrated. The IG reviewed the physical profile of the old school building and found it wasn’t “credible that these five separate rooms would be adequate to educate 90 students in 13 different grade levels.”[4] Throughout the process, FEMA had apparently taken Hope’s word on its enrollment.
As part of their investigation, the IG asked Hope to provide some additional proof of its 2005 student population, including student names, tuition receipts, tax filings, payroll checks, etc. Hope claimed all their records were destroyed in the storm, and that the bank no longer kept records from 2005. Hope also said it was not required to file state or federal income tax returns, and that it paid its staff as contractors, so it did not withhold payroll taxes. What is all the more odd is that one document Hope did provide was a canceled check for tax services, which would seem unnecessary for an entity not filing taxes.[5]
As to the student names, Hope could only recall 13 names of its supposed 90 students. Further, one former student from 2005 told the IG they only recalled there being about 40 students at the school.[6]
A Shady Land Deal
We said we’d come back to the land. It turns out the 16 acres Hope needed (for its new building) were about 40 percent wetlands and were owned by the president of Hope’s Board of Directors. In fact, the Board President did not recuse himself from the transaction, and, as the IG reports, “signed as purchaser and seller on the closing documents for the land purchase, as well as the authorized signer on the check used to pay the seller [himself].”[7]
Acting as seller of the land, the Board President hired (although Hope reimbursed the cost) three separate appraisers. The IG questioned the appraisals, noting that “[a]ll three appraisal amounts were very close, with two presenting the exact same value of $1,600,000 [despite using different site descriptions].”[8] Hope itself had no appraisal done and settled (with its own Board President) on a $1.4 million price - or $92k an acre (including for wetland acres).
FEMA disagreed with the $92k-an-acre price (thinking it should be more like $45k) and did not want to pay for unusable wetlands. Hope turned to the Arbitrations Board, which landed between the two prices, awarding $40k an acre for the usable land but also awarding $19k an acre for the wetlands, putting taxpayers on the hook for about $500k. In their review, the IG valued the land at about $26k an acre for the usable portion and $5k an acre for the wetlands - a total of $276k.[9]
Further, in anticipation of being reimbursed by the federal taxpayer for the land purchase, “the seller (i.e., the Board President) financed the loan .… This would make Hope’s Board President the seller, buyer, financer, and payer in this land transaction.”[10] However, the ultimate payers were really FEMA and the federal taxpayer. The IG labeled the whole land transaction as unethical.[11]
A New School, a New Community
The FSO Subcommittee was interested in Hope’s current status, and what we found was pretty amazing.
Those 16 acres Hope bought were nowhere near the original school site in D’Iberville, MS, nor were they just some vacant property. Instead, the new location was about 15 miles away in Gulfport, MS, in a brand-new housing development called Florence Gardens (FG) – “a pristine master-planned community.”[12]
FG is still selling lots, and its website includes a banner link to “Our School,”[13] which is clearly meant to be a selling point for a community branded as family oriented. On the “Our School” page, FG boasts of its new 13,000 sq. ft. building with space to grow, “state-of-the-art technology,” and furniture made of antimicrobial materials.[14] FG’s “Amenities” page also references Hope.
The federal taxpayer probably paid for some of that technology and furniture. Even though Hope officials could only recall 13 students, they were able to produce a 15-page list (from memory) of items destroyed in the storm and asked FEMA for nearly $800k. FEMA lowered the amount to just shy of $500k, but the IG thinks even that number is exaggerated; Hope had an insurance policy for the school’s contents with a maximum payout of just $17,200.[15]
Nonetheless, Hope got a bigger building, more land, and new equipment. The Board President sold some land, and Florence Gardens got a school to support its family friendly, neighborly model. It all only cost taxpayers $2.9 million.
Oh, and one more thing. Care to guess the identity of the CEO of Florence Gardens? Yep, it’s the same Board President who acted as both buyer and seller of the 16-acre property.[16]
###
[1] https://www.oig.dhs.gov/assets/GrantReports/2016/OIG-16-135-D-Sep16.pdf
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] Ibid. Clarification ours.
[8] Ibid. Clarification ours.
[9] Ibid.
[10] Ibid. Clarification ours.
[11] Ibid.
[12] http://www.hopeacademyfg.org/about-hope-academy/
[13] http://www.florencegardens.com/our-school/
[14] http://www.hopeacademyfg.org/about-hope-academy/
[15] https://www.oig.dhs.gov/assets/GrantReports/2016/OIG-16-135-D-Sep16.pdf
[16] http://www.wlox.com/story/28062331/groundbreaking-offers-hope-for-hope-a...
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul, chairman of the Federal Spending Oversight Subcommittee, released the latest edition of "The Waste Report," an ongoing project cataloguing egregious examples of waste within the U.S. government.
Is a bulk discount always the best deal? The Environmental Protection Agency (EPA) answered that question the hard way when it recently overspent taxpayer funds by more than $135,000 to buy mass transit passes in bulk.
This waste happened despite the King County Transit Authority issuing a clear caution and even providing a worksheet to check the math. You can get the full story in today’s "Waste Report" HERE or below.
***
Call it the Costco dilemma: you have to buy 36 eggs at once, but the price per egg is less than at the grocery store. Will you eat that many eggs (about 2 a day) before they go bad? If the answer is “NO,” you may actually lose money on the “deal.” In economics, it is called the law of diminishing marginal utility,[1] and, unfortunately, the Environmental Protection Agency (EPA) got a lesson in economics when it lost over $135K of taxpayers’ money buying mass transit passes in bulk.[2]
Since 1993, federal agencies have had the ability to provide a mass transit subsidy to employees as a fringe benefit, which is also aimed at reducing pollution and traffic congestion.[3] So it is no surprise that the EPA office in Seattle (a city known for environmental awareness and traffic congestion) would choose to offer this subsidy to its employees.
Unfortunately, according to the Inspector General (IG) for the EPA, in 2014 and 2015, the EPA missed the forest for the trees on bulk purchases of mass transit passes. In an effort to get a bulk-buy discount, the EPA-Seattle bought annual mass transit passes for ALL of its employees, not just the ones signed up for the transit subsidy, resulting in the EPA, even with the discount, paying over $135k more than it would have otherwise.[4]
The King County Transit Authority (from whom the passes were purchased) makes no secret that an employer must buy a “Business Passport” for “every benefits-eligible employee” in order to get the discount.[5] They also include the following caution on their website: “If you already subsidize transportation for some employees, we recommend that you compare your current transportation expenditure to the cost of Passport for all your employees.”[6] King County even provides prospective Passport clients with a worksheet to compare the cost of subsidizing just transit users with purchasing passes for all employees.
So, did someone at the EPA just fill the worksheet out wrong? Forget to carry the one? Not at all, according to the IG. Their report states that the “transit subsidy team did not believe cost calculations were applicable because discounted annual transit passes were only available if passes were purchased for all employees.”[7]
Sure, it cost more in the end, but we got the discount!!!
###
[1] http://www.investopedia.com/terms/l/lawofdiminishingutility.asp
[2] https://www.epa.gov/sites/production/files/2016-08/documents/_epaoig_201...
[3] Ibid.
[4] Ibid.
[5] http://www.kingcounty.gov/transportation/kcdot/MetroTransit/ORCABusiness...
[6] Ibid.
[7] https://www.epa.gov/sites/production/files/2016-08/documents/_epaoig_201...
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul, chairman of the Federal Spending Oversight Subcommittee, released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
We all learned, “That’s one small step for man, one giant leap for mankind” in school, but is that what Neil Armstrong really said during his 1969 moon landing? A recent study drew on two National Science Foundation grants, totaling more than $700,000 of taxpayer money, to find out why we may have heard something different than what Armstrong claimed he actually said.
Today’s Report details if they succeeded and reveals the intended purpose of the grants, which did not even mention Armstrong. You can find ‘The Waste Report’ HERE or below.
***
When Neil Armstrong set foot on the moon in 1969, he uttered certainly some of the most famous words in human history: “That’s one small step for man, one giant leap for mankind.” Or did he? Armstrong said that he was misquoted by having an “a” omitted from his statement, claiming it should have been “step for [a] man.”[1]
Quite the earth-shattering controversy we have on our hands here. Nope? Not interested? Don’t care? Well, maybe you will care about this: the National Science Foundation helped fund a study which brought together researchers from four major universities[2] to find the missing “a.” To explain the mystery, researchers even sought out subjects with dialectal familiarity to Armstrong – people from Ohio.[3]
The study drew on two NSF grants totaling more than $700k.[4] Though the research was just published this month, one of the grants came from the 2009 American Recovery and Reinvestment Act.[5] “Shovel ready” indeed.
So, did they solve the mystery? Well, no. In the end, researchers believe that the speed at which one part of a sentence is said, relative to the rest of the sentence, affects identification of words like “a.”[6] Listeners in experiments did not universally miss the “a” and certainly not to the extent it was apparently missed by listeners of Armstrong’s statement on the moon and in recordings. Thus, “[t]hese results demonstrate that substantial ambiguity exists in the original quote from Armstrong.”[7] Truly groundbreaking.
So, why did NSF think this study deserved your tax dollars? Well, they might not have. As The Waste Report has noted in the past, once a grant goes out the door, there is no further accounting of where that money winds up and how much goes to a given project.
In this case, the intended purpose of these grants was to help improve and understand communications for persons with conditions that may affect speech, such as autism, stuttering, and Parkinson’s disease[8] - not what Neil Armstrong said on the moon. The grant synopses makes no mention of Armstrong, nor does the paper assert that he suffered from a condition that would affect his speech.
Sounds like NSF funds might be getting lost in transmission
###
[1] http://journals.plos.org/plosone/article/asset?id=10.1371/journal.pone.0...
[2] University of Oregon, Ohio State, Michigan State, and George Mason University.
[3] http://journals.plos.org/plosone/article/asset?id=10.1371/journal.pone.0...
[4] NSF award numbers: 0847653 and 1431063
[5] NSF award numbers: 0847653
[6] http://journals.plos.org/plosone/article/asset?id=10.1371/journal.pone.0...
[7] Ibid.
[8] NSF award numbers: 0847653 and 1431063
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul, chairman of the Federal Spending Oversight Subcommittee, released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
In today’s Report, Dr. Paul highlights nearly $10 million in taxpayer funds that the City of Honolulu wasted to beat a “timeliness” deadline and stay eligible for more Community Development Block Grant (CDBG) funds. After searching for a project, the City settled on a grant proposal to purchase the Hibiscus Hill Apartments property, which wasn’t up for sale at the time and eventually cost taxpayers about $1.9 million above the appraised value.
The Federal Spending Oversight Subcommittee has established an email address, Report_Waste@HAGAC.Senate.gov, where federal employees can report wasteful end-of-year spending. More information can be found HERE.
You can find ‘The Waste Report’ HERE or below.
***
According to the Inspector General (IG) for the Department of Housing and Urban Development, the City and County of Honolulu (City) wasted nearly $10 million of Community Development Block Grant (CDBG) money for no other reason than to just spend federal money fast… so they could remain eligible to receive more federal funds.[1]
The CDBG program is a grant for local governments to help develop affordable housing and economic opportunities primarily for low- and middle-income persons. While grant money can be rolled into the next fiscal year, local governments are not allowed to just sit on this money. By the end of a grant year, available funds cannot exceed 150% of the current year grant award – the timeliness test. If a community breaks this timeliness test two years in a row, they may lose CDBG funding for the next year.[2]
According to the IG, Honolulu’s bureaucratic structure led it to perennially fail the timeliness test every other year. However, in 2013, the City was in risk of breaching the two-year rule and possibly losing CDBG money - until it cooked up a plan to fast track some big spending.
First, the City came up with an alternate process for approving CDBG projects, which, according to the IG, “had few requirements and was subjective.”[3] Then, the City put out a “brief” request for proposals for an acquisition project: high cost in one transaction. They further required the project to move fast – fast enough to prevent the two-year rule from being violated. Ultimately, the City approved a proposal to purchase the Hibiscus Hill Apartments in Waipahu.[4]
Hibiscus Hill was not even up for sale, which of course put the owner in a “name your price” kind of situation. The property ended up selling for about 25% above the appraised value – meaning taxpayers overpaid by about $1.9 million.[5]
Why Hibiscus Hill? Good question. The original proposal stated that rent at Hibiscus Hill had increased 40% over the preceding 3 years, but that claim was not substantiated. However, the appraiser found rents at the apartment complex were at the lower end of the local rental market. Further, since the property acquisition, rents have increased, in some cases “significantly.”[6] This led the IG to conclude, “Therefore, the acquisition apparently did not serve a meaningful purpose and the City did not support that it was necessary.”[7] True, unless the City’s real purpose was just to spend money quickly to preserve their access to CDBG grant dollars.
The grant recipients’ proposal included a promise to spend $1 million (of their money) renovating all 80 units in the complex. Yet, two years later, only eight units were renovated at a cost of just over $146k. Further, 50 units were to be deemed “affordable,” a promise which the City itself decided in 2015 was unmet.[8]
Nonetheless, Honolulu did not breach the timeliness test two years running and is still eligible to receive CDBG money…
And the taxpayer is only out $10 million.
###
[1] https://www.hudoig.gov/sites/default/files/documents/2016-LA-1009.pdf
[2] Ibid.
[3] Ibid.
[4] http://www.eahhousing.org/pages/apartmentdetail/117
[5] https://www.hudoig.gov/sites/default/files/documents/2016-LA-1009.pdf
[6] Ibid.
[7] Ibid.
[8] Ibid.
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul, chairman of the Federal Spending Oversight Subcommittee, released the latest edition of "The Waste Report," an ongoing project cataloguing egregious examples of waste within the U.S. government.
In September 2013, as part of a "use it or lose it" spending rush, the Detroit VA Medical Center spent over $300,000 on televisions and accessories for upgrades to patient rooms. Three years later, the vast majority of the televisions, which turned out to be the wrong model, sit in storage with expired warranties, still waiting for the project to begin construction. Dr. Paul’s Report reveals the full story.
The Federal Spending Oversight Subcommittee has established an email address, Report_Waste@HAGAC.Senate.gov, where federal employees can report wasteful end-of-year spending. More information can be found HERE.
You can find "The Waste Report" HERE or below.
***
Waste Report readers will remember an edition from earlier this year, “Veterans Health Administration: It’s Not About Logistics,” where we reported on the VA leaving urology equipment unused for months. Because the equipment was leased, the VA made over $200k in payments for the equipment while it sat in storage. Unfortunately, it seems the VA has outdone that waste - this time spending over $300k on TVs that have been sitting in storage for nearly three years.[1]
The VA Inspector General reports that, in 2013, the Detroit VA Medical Center wanted to upgrade TVs in patient rooms. Probably not a bad idea and certainly a benefit to our veterans in a difficult time. Unfortunately, the project included upgrading the whole TV system, which required some amount of construction. Rather than waiting for construction to begin (or even be scheduled), the VA saw fit in September 2013 to purchase 300 TVs and accessories immediately at a cost of $311k.[2]
Since the facility was not ready for the TVs, they went to storage,[3] where they have sat for nearly three years. The IG’s report even states that “as of June 21, 2016, the facility had not yet awarded the contract to begin construction.”[4] So these TVs will continue to sit for some time. By the way, the warranties expired in January 2015.[5]
What is worse, these dormant TVs are not even the right ones for the planned upgrade. According to the IG, the project plan calls for TVs that use an Ethernet feed, but the ones the VA purchased use an increasingly outdated coaxial feed. So the VA modified the project at an additional cost of $19k - to accommodate the TVs still in storage.[6]
You might ask, how did something like this happen? Well, the culprit seems to be the “Use it or Lose it” paradigm of government spending: spend money before it expires at the end of the fiscal year. Remember, the TVs were purchased in September 2013, just before the end of the federal government’s fiscal year. As the IG reports, “Despite not needing the TVs … the Chief of Volunteer and Community Relations reported the facility purchased them because they had funds available.”[7]
“Use it or lose it” is a big problem. Research indicates that “spending in the last week of the year is 4.9 times higher than the rest-of-the-year weekly average,” while “quality scores for year-end projects are 2.2 to 5.6 times more likely to be below the central value [lower quality].”[8] As in this case, you might end up buying TVs you do not need and which are the wrong model.
Chairman Paul and the FSO subcommittee have worked to bring the perils of “use it or lose it” spending to public attention, both with a hearing on the subject last September and legislation (S.1378)[9] that incentivizes federal employees against end-of-year-spending binges while helping to reduce the deficit.
The IG’s report put it best when it said the unneeded TV purchases “prevented the use of about $292,500 that could have been better spent on other facility priorities.”[10] Of course, the top priority of the VA should be veterans.
###
[1] http://www.va.gov/oig/pubs/
[2] Ibid
[3] Eighteen of the TVs were actually used in the VA’s hemodialysis clinic.
[4] http://www.va.gov/oig/pubs/
[5] Ibid
[6] Ibid
[7] Ibid
[8] Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidence from Federal Procurement; Liebman, Jeffrey, & Mahoney, Neale; National Bureau of Economic Research; September 2013. Emphasis added.
[9] S. 1378 passed out of committee on May 25, 2016.
[10] http://www.va.gov/oig/pubs/
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
This week’s Report resembles one you could have seen during the 2007 mortgage crisis, as Dr. Paul highlights millions in lost taxpayer funds in the Small Business Administration’s (SBA) disaster assistance loan program. According to the SBA’s own Inspector General, SBA provided loans to applicants lacking satisfactory credit, or, in some cases, even a proven ability to repay the money. Often, workers ignored SBA’s own guidelines, or exploited loopholes, to issue these loans.
‘The Waste Report’ can be found HERE or below.
***
Subprime, liar loans, no-doc, income unverified… these sound like terms used to describe the 2007 mortgage crisis. Unfortunately, they can also be used to describe the Small Business Administration’s disaster assistance loans following Hurricane Sandy, which resulted in as much as $4.3 million of lost taxpayer money.[1] In most instances, these loans were made either because SBA guidelines were ignored, or loopholes were exploited.[2]
Part of federal disaster relief includes the availability of low-interest loans to persons in the affected area via the Small Business Administration (SBA), even though these loans are not necessarily for business purposes.[3] According to the SBA’s Inspector General, approximately 500 of SBA’s Sandy loans went into default within 18 months of issuance, though even that number is misleading, as two thirds of these loan recipients made fewer than three payments, and more than half of those made no payment at all.[4]
While these defaults represent just 2.6 percent of all SBA Sandy loans, they tell a troubling story of lax lending practices eerily similar to the 2007 subprime crisis, where persons that never should have gotten loans did. However, unlike with private lenders, in this case loans were made using taxpayer dollars.
The IG estimates that loan approvals totaled nearly $3 million for persons with unsatisfactory credit.[5] Like all lenders, SBA has a minimum creditworthiness standard for a loan approval. However, loans can be approved if a borrower can explain minor or isolated credit blemishes,[6] a loophole you could drive a Mack truck through.
In one instance, SBA approved an over $200k loan, despite the borrower having multiple past-due and charge-off accounts. The explanation that satisfied SBA? The borrower was unaware of one, yes one, of their many delinquent debts. After receiving an initial $14k disbursement, the borrower failed to make even their first payment, and, thankfully, the remainder of the loan was canceled.[7]
More troubling, the IG estimates that $1.46 million in loans went to persons who could not demonstrate an ability to repay.[8] Sound familiar? One borrower never made a payment on their $12k loan. This is probably because, when taking into account their existing obligations, “the borrower’s cash available [to pay the loan] was negative.”[9] Another borrower claimed nearly 30 percent of their income came from rental properties they could not document and did not report on their tax returns. In other words, they either were dodging taxes or lying to SBA. Nonetheless, they received more than $8k on a loan they defaulted on after only four payments.[10]
In another case, one loan was approved for a person who was not a U.S. citizen, which is permissible for some legal residents who provide additional documentation demonstrating their eligibility. Unfortunately, in this case, such documentation was not obtained or even requested, and the borrower defaulted.[11]
Of course, disaster lending might call for some more flexibility than traditional loan making, but such flexibility must be limited, standards (even looser ones) need to be adhered to, and taxpayers’ interests cannot be ignored.
###
[1] https://www.sba.gov/sites/default/files/oig/16-18_-_Sandy_Early_Default_...
[2] Ibid., page 1
[3] Ibid.
[4] Ibid., pp. 1-2
[5] Ibid., page 4
[6] Ibid., page 5
[7] Ibid.
[8] Ibid., page 9
[9] Ibid.
[10] Ibid.
[11] Ibid., page 11
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
In this special, two-page edition, Dr. Paul examines federal employees doing union work on taxpayers’ dime, costing Americans hundreds of millions of dollars when member dues should be more than enough to cover representation costs. Many of these employees receive full salary and benefits despite not performing a government function. Though some argue such work is for the “public good,” often the final result runs contrary to taxpayers’ best interests and further enlarges an already bloated government.
‘The Waste Report’ can be found HERE or below.
***
Are you a federal employee and in a union? Well, if you answered “NO,” you might be surprised to find out you are paying for union representation for federal employees.
According to the Office of Personnel Management (OPM), “Official time, broadly defined, is paid time off from assigned Government duties to represent a union or its bargaining unit employees.”[1] That is right. Federal employees get paid by the taxpayers to do union work, and, according to OPM, Official Time (OT) cost taxpayers $157.2 million in salary and 3.4 million hours not performing governmental duties in 2012.[2]
However, a 2014 report by the Government Accountability Office (GAO) questioned OPM’s methodology in calculating OT costs. GAO indicated that, based on a sample of 10 agencies, OPM had under calculated the cost by 9 percent on average,[3] which, if true across the board, would put the total figure closer to $171.3 million. Even worse, the GAO stated, “OPM said reporting on official time is not a priority at this time…”[4] Maybe that’s why OPM’s FY 2012 report on OT is the most recent available.
GAO’s 2014 report notes that 386 employees were on OT full-time (2/3rds were attached to the VA).[5] Americans for Limited Government used FOIA requests to estimate that number at 490 employees this year.[6] In other words, these are federal employees that perform no government function yet receive full compensation, including federal benefits like health care and retirement.
“Time off,” as OPM says, implies time away. Maybe they’re down at the union hall, using union equipment? Nope. Union contracts (negotiated by taxpayer-funded union reps) often include non-payroll OT expenses such as travel, office space, equipment, etc. Most agencies and OPM do not generally report these costs. The Social Security Administration (SSA), however, does. In FY 2013, non-salary OT cost taxpayers an additional $1.8 million at SSA.[7] That is just one agency.
How did this all come to be? Well, OPM reports that “voluntary membership in Federal sector unions results in considerable reliance by unions on the volunteer work of bargaining unit employees, rather than paid union business agents…”[8] Of course, that is not quite true. These are paid union agents (almost 500 work full-time for the union), only they are paid by the taxpayers they are negotiating against rather than with the dues from the members they are representing.
Why are taxpayers paying union reps when union members pay dues?
Does this voluntary membership system really leave federal employee unions (FEUs) unable to collect enough dues to, you know, represent their members? Well, the FSO subcommittee dug into Department of Labor financial filings of the four largest FEUs, representing about 88 percent of all federal unionized workers. We found that, for just FY 2015, they collectively reported $205 million in receipts for their headquarters operations and over $100 million for the locals. They also reported $117.8 million in net assets.[9] In all, dues should be more than enough to fund union representatives.
With dues money not going to negotiating contracts and addressing grievances, FEUs can put it to work against the taxpayer. In one example, FEUs are currently advocating for a 5.3 percent pay increase for federal employees instead of the 1.6 percent increase President Obama has proposed.[10] Keep in mind that, over the last 12 months, inflation has been just 1 percent,[11] and the non-partisan Congressional Budget Office found in 2012 that federal employees made on average 2 percent in wages and 48 percent in benefits more than their private sector counterparts.[12] By the way, this pay increase would be in addition to the automatic pay hikes, known as “step increases,” that federal employees also receive.
That example is pretty direct. FEUs, however, are generally less direct, arguing their main focus is the overall public good. As Milton Freidman famously summarized Adam Smith, it is much easier to get a special advantage by framing it as a public good (even when it is not) than to simply ask for special treatment.[13]
Take, for example, the bipartisan effort to reform the Department of Veterans Affairs (VA) after the recent waiting list scandal, where veterans actually died. The FEU representing VA employees is opposing such reforms, but not because they may adversely affect union members. Instead, the president of the union argued in an op-ed that the VA is working well, and that it would actually hurt veterans to seek reform because of “minor” problems.[14] Minor? PEOPLE DIED. Of course, the op-ed made mention of the VA being understaffed, but it somehow omitted the $31 million and 1.07 million hours the VA spends on OT.[15]
In another example, the FEU representing SSA employees lambasted the House Appropriations Committee for holding operation spending constant.[16][17] In Washington logic, no increase is actually a cut. This FEU warns that this policy will cause almost two lost weeks of work, which will adversely affect benefits (even though the legislation had nothing to do with benefits).[18] But it forgot to acknowledge the $7 million and almost 250,000 hours of OT done on its behalf at SSA. That comes out to about two workweeks for over 3,050 employees.
Corporate Welfare: Now for Fed. Employee Unions, Too!!!
###
[1] https://www.opm.gov/policy-data-oversight/labor-management-relations/rep...
[2] https://www.opm.gov/policy-data-oversight/labor-management-relations/rep...
[3] http://www.gao.gov/assets/670/666619.pdf
[4] Ibid
[5] Ibid
[6] https://getliberty.org/wp-content/uploads/2016/06/ALGF-Full-Time-Officia...
[7] http://www.gao.gov/assets/670/666619.pdf
[8] https://www.opm.gov/policy-data-oversight/labor-management-relations/rep...
[9] FSO Calculation using DOL data
[10] http://www.nffe.org/ht/display/ArticleDetails/i/109026 & https://www.n...
[11] http://www.bls.gov/news.release/cpi.nr0.htm
[12] http://www.cbo.gov/sites/default/files/cbofiles/attachments/01-30-FedPay...
[13] Friedman, Milton & Rose. Free to Choose: A Personal Statement. Retrieved from http://bit.ly/2bjIFxI
[14] http://thehill.com/blogs/congress-blog/healthcare/279529-no-the-va-is-no...
[15] http://www.gao.gov/assets/670/666619.pdf
[16] https://www.afge.org/article/social-security-is-under-siege-and-no-one-i...
[17] According to the House Appropriations Committee, relative to FY 2016, spending was reduced due to a one-year building renovation.
[18] https://www.afge.org/article/social-security-is-under-siege-and-no-one-i...
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
In today’s report, Dr. Paul takes a look at taxpayers funding a documentary on the International Prototype Kilogram. This $500,000 grant opportunity from the Department of Commerce will focus on efforts to replace “Big K” with a natural constant.
‘The Waste Report’ can be found HERE or below.
***
You may recall a Waste Report from last year called “Measuring Waste”, highlighting a $188,000 NSF grant to produce a book on the history of measurement and finally answering the age-old question of why Americans do not like the metric system.
If you have not made the trip to Barnes and Noble to pick up a copy, do not worry. Netflix will soon be able to satisfy your metric system cravings, thanks to the Department of Commerce spending $500,000 to make a documentary on the Kilogram.[1] This is not just any kilogram, but THE granddaddy of all kilos: Big K, the International Prototype Kilogram.
You know, Big K, the metal cylinder stored in a vault in Paris that serves as “the standard for measuring mass in almost every country on Earth.”[2] That is right!! Taxpayers are funding a movie about a metal cylinder. Well, sort of. The movie is actually about the quest to replace Big K with a natural constant.
What is a natural constant? Well, take a meter, for example, which used to be defined by the distance between two marks on an iron bar kept with Big K in Paris. In 1984, a meter was redefined “as the distance light travels, in a vacuum,” in 1/299,792,458 of a second, a natural constant.[3] Certainly, Waste Report readers remember when that change happened, right?
Turns out Big K is the last standard of measurement in the vault. Cracking the nut of how to redefine mass by a standard constant has proven challenging for the international community of measurement scientists, which is why the movie will be titled The Last Artifact. However, after decades of research and debate, it appears an international committee will likely reveal a measure of mass based on something called the “watt balance” in late 2018.[4]
If this Waste Report seems to be getting heavy (pun intended), not to worry. We are sure replacing Big K is of great value to science, but is a documentary about it of great value to taxpayers? Probably not. According to the grant opportunity, “The overriding objective of the documentary is to convey the subject in a compelling and original way to an audience of science-interested viewers.”[5]
But if viewers interested in this kind of science are a broad audience, ticket sales or sponsors should cover the cost of production, making government aid unneeded. If they are a narrow market, then 69 average Americans worked all year to pay for a film about a metal cylinder that only a few people will even care to watch.
How about a Government Waste Documentary?
###
[1]http://www.nist.gov/public_
[2] Ibid
[3] http://www.surveyhistory.org/
[4] http://www.nist.gov/public_
[5] Ibid
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
In today’s report, Dr. Paul turns the spotlight on nearly $600,000 of taxpayer money going to offset some of the Wolf Trap Foundation’s operation and production costs. While Wolf Trap is supposed to be structured to protect taxpayers, the funds are flowing from an earmark many members of Congress may not realize exists - an earmark even the National Park Service has tried to eliminate.
‘The Waste Report’ can be found HERE or below.
***
Outside the DC area, few people have probably even heard of Wolf Trap National Park for the Performing Arts, let alone taken in a concert there. However, for those inside the Beltway (metaphorically speaking[1]), Wolf Trap is a well-known venue for a variety of summer concerts. Unfortunately, whether you have heard of it or not, Wolf Trap is trapping nearly $600,000 of taxpayer money for wasteful, DC-insider hypocrisy.
On its surface, Wolf Trap is structured to protect taxpayers. As a kind of public-private partnership, the National Park Service maintains the park (which includes hiking trails and the like), while the non-profit Wolf Trap Foundation is “responsible for artistic programming, public relations, marketing, box office functions, and providing stagehands and certain other employees who are directly related to the presentation of performing arts.”[2]
It seems like a reasonable and clear division between the national park and its use as a venue for stage entertainment. However, the line seems to have recently been blurred, as the Park Service is handing over $594,000 to the Foundation to offset some of the cost of operations and production.[3]
Do not blame the Park Service! Their hands are tied. This money comes from a $2.2 million earmark for the National Capital Area Performing Arts program, which funds (or subsidizes) a variety of concerts and entertainment around Washington. In fact, the National Park Service has unsuccessfully asked Congress to eliminate this earmark.[4] While Congress ignored those requests, many members may have just not known the earmark was there. You see, the earmark is not in the nearly 900-page text of the Consolidated Appropriations Act, 2016 (H.R. 2029) or the more than 200 pages of committee reports accompanying the bill. The earmark is on page 16 of the 109-page explanatory statement for division G of the Appropriations Act. Vague and hard to find - almost the definition of “snuck in.”
In the case of Wolf Trap, it even gets worse. The purpose of the funds is to “pay a portion of the costs of the union stagehands that work backstage….”[5] So, DC’s most-connected people, many of whom are strong union supporters, are using taxpayer money to alleviate themselves and fellow Washingtonians of paying union prices.
The FSO subcommittee calculates that if concertgoers had to pay the full cost of Wolf Trap concerts with unionized stage hands, ticket prices would increase by only about 4 percent.[6] That comes out to roughly $5 a ticket for the most expensive seats.[7] But even if the increase were 40 percent or 400 percent, that cost should be paid by the patron who chooses to take in a show, not the taxpayer who has no choice whatsoever.
In case you are wondering, about 84 average Americans a year have to turn over their hard-earned money in taxes so Washingtonians can save $5 on concert tickets. By the way, Fairfax County, VA, where Wolf Trap is located, is the second wealthiest county in America, with a median income over $110,000. Bordering Fairfax are the #1 (Loudoun - $117k), #6 (Arlington - $101k), and #8 (Montgomery, MD - $97k) wealthiest counties in America.[8]
WASHINGTON, D.C. – Today, U.S. Senator Rand Paul released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
In today’s report, Dr. Paul highlights $6 million in taxpayer funds used to renovate Fort Belvoir’s “Eagle’s Nest” Dining Facility. The project was completed in November 2015, only for the facility to be permanently closed by July 1, 2016. In addition to facing stiff competition from other local dining choices, it became clear during the renovation that the Army would likely close the Eagle’s Nest.
‘The Waste Report’ can be found HERE or below.
***
Last November, Fort Belvoir’s “Eagle’s Nest” Dining Facility completed a $6 million renovation, and last month (less than a year later), the facility closed its doors permanently.[1]
According to the base newspaper, Belvoir Eagle, the project “included installing new flooring; ceilings; lights; bathrooms and serving lines; and replacing all of the furniture,” with a representative of the facility even quoted as saying, “[w]e really are a premier dining facility, now.”[2] Seven months later, Fort Belvoir’s website read, “[e]ffective July 1, 2016 the Fort Belvoir Dining Facility will be officially, permanently closed.”[3]
The shocking part is not that the Army is closing the facility after the renovation, but that the renovation was done in the first place. According to the Army, the facility only had less than a 5 percent utilization rate.[4] Of course, Fort Belvoir is just south of Alexandria, VA, next to George Washington’s home at Mt. Vernon. With Starbucks, Subway, and Burger King on base, and numerous restaurants and grocery stores just a short drive in either direction on Route 1 (which bisects the base), it is not surprising that even a remodeled base dining facility would have trouble competing.
To understand why the Eagle’s Nest renovation was such a boondoggle, you first need to understand how the Army feeds personnel on the home front. In addition to their regular pay, military personnel receive one of two types of food assistance: Subsistence-In-Kind (SIK), where a solder walks into an Army cafeteria and receives a meal, and Basic Allowance for Subsistence (BAS), a tax-free, additional benefit added to a soldier’s pay for them to purchase food wherever they see fit.
Base dining facilities’ (like the Eagle’s Nest) primary purpose is to serve personnel on SIK plans, although they do take cash customers at reduced rates. But with more and more private food options on base, or in local communities, fewer personnel are taking SIK plans. This is why, last August, the Army decided to explore closing mess halls operating at less than 65 percent of capacity based on SIK users. [5]
This meant certain closure at Fort Belvoir, where not one person is on the SIK plan.[6] That’s $6 million of taxpayer money down the garbage disposal. Imagine the cost if the second phase, a kitchen remodel, had taken place!
Today’s Menu: Waste with a side of poor planning
###
[1] http://www.govexec.com/defense/2016/06/army-spent-millions-renovate-doom...
[2] http://www.belvoireagleonline.com/news/top_stories/newly-renovated-dinin...
[3] http://www.belvoir.army.mil/eateries/DiningFacility.asp
[4] http://www.govexec.com/defense/2016/06/army-spent-millions-renovate-doom...
[5] http://www.armytimes.com/story/military/2016/02/08/army-1-3-dining-facil...
[6] http://www.govexec.com/defense/2016/06/army-spent-millions-renovate-doom...
WASHINGTON, D.C. – Today,U.S. Senator Rand Paul released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
In today’s report, Dr. Paul uncovers the Department of State offering a grant of $60,000 in taxpayer funds to train television camera operators for Estonia’s ETV+ channel. Since ETV+ is Estonian Public Broadcasting’s third television channel, the American people would be right to ask how all the existing television camera expertise disappeared - and why they have to pay to replace it.
‘The Waste Report’ can be found HERE or below.
***
From slowly panning in when things get serious, to the fast-paced pursuit of a running back breaking away, television cameras and their operators play an integral and often unsung role in our TV viewing experience. But operating a TV camera is not easy; it is a technical job that requires advanced training. Thanks to the U.S. Department of State (State), you are paying for some of that special training… in Estonia.
State is currently advertising a $60,000 grant opportunity to train camera operators for ETV+, Estonian Public Broadcasting’s (ERR) Russian-speaking channel. Interested parties are invited to submit proposals, which should include sending an American team of trainers, including a Russian-English translator, to Estonia to conduct training there. Separately, in July or August, “when [the] ETV+ production team is on leave,” the grant recipient is expected to bring five camera operators to the U.S. for a 10-day training session in a “learning-studio.”[1]
Since it is a public broadcasting channel, ETV+ is primarily funded through Estonia’s Ministry of Culture, receiving about €1.8 million in startup c
WASHINGTON, D.C. – Today,U.S. Senator Rand Paul released the latest edition of ‘The Waste Report,’ an ongoing project cataloguing egregious examples of waste within the U.S. government.
In today’s report, Dr. Paul uncovers the Department of State offering a grant of $60,000 in taxpayer funds to train television camera operators for Estonia’s ETV+ channel. Since ETV+ is Estonian Public Broadcasting’s third television channel, the American people would be right to ask how all the existing television camera expertise disappeared - and why they have to pay to replace it.
‘The Waste Report’ can be found HERE or below.
***
From slowly panning in when things get serious, to the fast-paced pursuit of a running back breaking away, television cameras and their operators play an integral and often unsung role in our TV viewing experience. But operating a TV camera is not easy; it is a technical job that requires advanced training. Thanks to the U.S. Department of State (State), you are paying for some of that special training… in Estonia.
State is currently advertising a $60,000 grant opportunity to train camera operators for ETV+, Estonian Public Broadcasting’s (ERR) Russian-speaking channel. Interested parties are invited to submit proposals, which should include sending an American team of trainers, including a Russian-English translator, to Estonia to conduct training there. Separately, in July or August, “when [the] ETV+ production team is on leave,” the grant recipient is expected to bring five camera operators to the U.S. for a 10-day training session in a “learning-studio.”[1]
Since it is a public broadcasting channel, ETV+ is primarily funded through Estonia’s Ministry of Culture, receiving about €1.8 million in startup c
