From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Fees, Fines, and Penalties

Description: We discuss how the government tracks the hundreds of
billions of dollars it collects each year in fees, fines, and penalties.

Related GAO Work: GAO-19-221: Fees, Fines, and Penalties: Better
Reporting of Government-wide Data Would Increase Transparency and
Facilitate Oversight

Released: March 2019


[ Background Music ]

[ Kris Nguyen: ] It is important to provide the public with greater
transparency of federal resources.

[ Matt Oldham: ] Welcome to GAO's Watchdog Report, your source for news
and information from the U.S. Government Accountability Office. I'm Matt
Oldham. Congress has authorized federal agencies to collect hundreds of
billions of dollars each year in fees, fines, and penalties. And this
money goes to a variety of areas, like national security programs or
natural resources protection. I'm with Kris Nguyen, a Strategic Issues
director at GAO, and she led a report on how the federal government
keeps tabs on this large amount of money. Thank you for joining me,
Kris.

[ Kris Nguyen: ] Thank you for having me.

[ Matt Oldham: ] So how did we get to $335 billion from fees in 2017?
And just to be clear, we're not talking about taxes, right?

[ Kris Nguyen: ] That's right. The federal government receives funds
from a number of sources in addition to tax revenues, and other sources
can include collections from fees, fines, and penalties. Fees are
charges that the federal government makes for goods and services that it
provides to users. So in addition to the fees that you mentioned
earlier, other types of fees can include the Postal Service charging for
stamps and other services. Another example is premiums for Medicare. In
addition to fees, we also looked at fines and penalties, and these are
collections that result from the enforcement of laws and regulations. An
example of this is penalties that are assessed for violations of federal
telemarketing laws.

[ Matt Oldham: ] So how is this money tracked and distributed?

[ Kris Nguyen: ] The Office of Management and Budget and the Department
of Treasury both collect and report data on these types of collections.
And the number that you cited, the $335 billion, is OMB's reported total
for fees for fiscal year 2017. However, we found that there are a number
of limitations associated with this reporting of data. Specifically,
OMB's reported total for fees can include collections that are not fees,
or it can also exclude some fees. As a result, users may not be aware
that these figures can be an over or an underestimate. Regarding how
these funds are spent -- in some instances, agencies are permitted to
retain these collections and use it for their operations without further
congressional action or going through the annual appropriations process.
And in other instances, agencies must obtain further congressional
approval.

[ Background Music ]

[ Matt Oldham: ] So it sounds like OMB and Treasury do collect and
report on the money they get from fees, fines, and penalties, but
limitations on information about these collections could result in
incomplete data. So why is it important to know more about this money
that the federal government collects?

[ Kris Nguyen: ] Given the nation's fiscal conditions, it is critical
for Congress to have full visibility of federal resources to aid in its
oversight of federal programs and agencies. It is also important to
provide the public with greater transparency of federal resources.

[ Matt Oldham: ] Did your team have recommendations on how federal
agencies could clear up some of these unknowns?

[ Kris Nguyen: ] One recommendation is to address the limitation that I
discussed earlier, which is for OMB to disclose the limitation on how
the totals are being reported, that it includes both collections that
are not fees as well as excluding some fees. Another recommendation is
for OMB to provide more disaggregated information, such as providing
information by agency to help facilitate congressional oversight.

[ Matt Oldham: ] Final question. What do you believe is the bottom line
of this report?

[ Kris Nguyen: ] The bottom line is that better reporting of
government-wide data on fees, fines, and penalties would increase
transparency and facilitate congressional oversight to federal
resources.

[ Matt Oldham: ] Kris Nguyen is a Strategic Issues director at GAO, and
she was talking about her report looking into how the federal government
reports on the money it collects from fees, fines, and penalties. Thank
you for your time, Kris.

[ Kris Nguyen: ] Thank you.

[ Background Music ]

[ Matt Oldham: ] And thank you for listening to the Watchdog Report. To
hear more podcasts, subscribe to us on Apple Podcasts.

[ Background Music ]

[ Matt Oldham: ] For more from the congressional watchdog, the U.S.
Government Accountability Office, visit us at gao.gov.