Watchdog says as much as 74% of federal grant spending in 2024 was untraceable to local levels

Agovernment watchdog group’s new report on federal spending found that it's unclear where hundreds of billions of grant dollars go once they reach states.

The Project On Government Oversight downloaded and analyzed data from USAspending.gov that the nonprofit group says in a report released on Tuesday shows over 74% – $712.6 billion – of $958.6 billion in domestic grant spending from fiscal 2024 couldn’t be tracked to the local level.

The Trump administration confirmed with Just the News that the lack of accountability shown in the report's findings is why new rules have been proposed for federal grantmaking, and they comport with those at the Office of Management and Budget.

Officials at the U.S. Department of Treasury said that while they couldn't confirm the report's specific statistics, Secretary Scott Bessent continues making efforts to crack down on similar fraud. They pointed to Tuesday’s safeguard implementation to stop payments to deceased individuals and the January initiatives to combat Somali fraud in Minneapolis, Minnesota.

POGO senior policy analyst Sean Moulton, who authored the report, said analysis like his group did is key to government accountability and that the capacity to track such funds into their final mile is essential in making sure those who need the most help are served.

"If we can follow the money down to the local level, we get a better chance of making sure it's going to the communities that need it," he told Just the News. "The reality is, if you just know how much money’s going to your state capital or something like that, you don’t know where it’s going,” Moulton said. “That’s what [USAspending.gov] is supposed to be about: giving people a window into this federal spending.”

Go to USAspending.gov to track the data yourself.

The review covers reported award data for the 60 largest domestic-focused federal assistance programs, which account for 92.3% of total federal assistance spending for fiscal 2024.

It also evaluates the detail to which program coordinators report on sub-awards and the physical or geographic location where the work or services are carried out – key data compliance reporting and public transparency.

The report found that just 0.2% of Medicaid’s $614 billion distributed federal funds could be tracked to the local level, as well as 0.1% of the $19.4 billion spent through the Children’s Health Insurance Program, 1.8% of Federal Transit Formula Grants’ $8.2 billion, and 0.5% of the State of Good Repair Grants Program’s $4.6 billion.

Prime awards had local-level data for only $198.3 billion – 20.7 percent – of awarded federal grant funds, and sub-award data accounted for an additional 5% – $47.6 billion – of federal grant dollars that could be tracked locally, according to the report.

While most direct payments (96.1%) were trackable, less than 3% of the prime direct payments were trackable to either a city or zip code level, and just $198.3 billion of the $958.6 billion in federal grants expended during fiscal 2024 included local place of performance data.

Most transaction descriptions were vague, duplicative and uninformative, adding to the spending's intractability, according to the report, which also found roughly 97% of the 2.4 million reviewed transactions used duplicate descriptions and that direct payment and loan programs reported unique descriptions for 0.15% and 0.01% of transactions, respectively.

Moulton said the fiscal 2024 data is the most accurate available because 2025's is finalized and with newer data there's “always this chance that you know some significant portions might come in later.”

He also argued that following the money to where it’s used allows an improved evaluation of these programs’ performances and may reveal spending patterns where some communities are getting more than they need.

“We need to squeeze every bit of use out of federal dollars that we're sending to communities," Moulton said.

He thinks the mismanagement over a longer period could contribute to the US's nearly $40 trillion national debt “because we wind up spending more money over multiple years than we really should be.”

While the report focused on the federal government, there’s a “finger to be pointed” at state governments and agencies since they’re receiving the money and have a responsibility to accurately track sub-awards, Moulton also argued, adding that the Trump administration, particularly OMB and the Treasury Department, should call out these programs for a lack of transparency.

“The last thing we need to do is get the spending wrong, send it to the wrong communities or send it to someone who's defrauding the government and just putting the money in their pocket and running,” he said.

© Just The News.