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Over $9 billion was spent last week by federal agencies to close out the fiscal year

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Over $9 billion was spent last week by federal agencies to close out the fiscal year

The start of the fall season marks the beginning of a spending spree in Washington, as the federal government races to use up the rest of its budget for the year. 

Use it or lose it

September 30 is the last day of the fiscal calendar and in the weeks leading up to it, federal agencies scramble to spend what's left in their annual budgets. 

Why  Because federal agencies don't want Congress to see if they haven't spent all the money that was appropriated to them. The concern is if Congress sees a pattern of non-spending by agencies their annual budgets could be slashed.

It's a phenomenon that has been dubbed "use it or lose it," and it's costing billions of tax dollars every year. 

August and September spending

The government tends to spend a significantly larger portion of their budget in the last two months of the financial calendar. Between fiscal years 2003 and 2015, federal agencies spent almost a quarter of their annual obligated contract funds in August and September, according to a report from George Mason University's Mercatus Center. 

September 2016

In the last week of September this year, the government spent over $9 billion, $2 billion of that on Sep. 30 alone. 

Some of the purchases included $400,000 worth of toilet paper, over $65,000 on booze, nearly $40 million on furniture and over $45 million on cars; according to USASpending.gov. 

"The fiscal year-end at the federal government doesn't just have the appearance of being a big party. It, in fact, is a big party," said Adam Andrzejewski, founder of OpenTheBooks.com. 

Gold rush for contractors

The last-minute spending is a boon for contracting companies. Some procurement firms even hold seminars to advise contractors on how to seal the deal quickly, and make the most of the government's September spending.


Robert Hale, a former comptroller at the Department of Defense, and a fellow with contracting firm Booz Allen Hamilton,  said the end of the fiscal year can also be a stressful time for contractors who often have to hustle to keep up with the influx of contracts. 

You get all these requests or proposals at the end of the year and it is stressful to try to respond to them in a quality manner...
Robert Hale

To be fair, government agencies will often wait until the end of the fiscal year to spend money on low-priority projects like building maintenance and staff training programs, just like anyone managing a normal household budget would do. 

How should Congress deal with September spending?

How do we fix it?

Some experts, including Hale, say that allowing agencies to roll over even a small percentage of their budget into the next fiscal year would help curb wasteful spending. 

"The hope would be that would allow the manager to say 'now, I have a choice, do I buy that new office furniture or save [money] it for a higher priority need that might come up later?'" Hale said. 

Bonuses for cost-cutters

In the meantime, the House Committee on Oversight and Government Reform recently passed the "Bonuses for Cost-Cutters Act." If the bill becomes law, it would reward federal workers that report wasteful year-end spending by offering bonuses of up to $10,000. 

The law would also direct 95 percent of the savings reported to go toward reducing the federal deficit, which is currently an estimated $544 billion. 

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