A stunning new audit of Austin’s Matched Savings Account (MSA) program reveals the city irresponsibly managed hundreds of thousands of dollars to the point of “basically giv[ing] away free money.”
MSA’s stated purpose is to financially empower low-income citizens by amplifying their savings accounts, specifically to buy a house, start or grow a small business, or continue their education. But program’s actual effects are less than edifying.
To begin, the program is gratuitously wasteful. According to the audit: “…under the current 8:1 match rate, a participant who saved $500 towards tuition could expect to receive $4,000 in matching funds.” [emphasis mine] That level of generosity with the public purse is entirely unreasonable.
Worse still, the city’s audit proves there was little, or even complete lack of, oversight to verify if applicants were eligible for grants or what they did with the money they were granted. In cases where there was record of how the money was spent there were often times missing paperwork giving vague or nonexistent reasons for why taxpayer money was spent on certain items. In all, 72% of all grants had issues with their verification packets, ranging from missing information to evidence that the recipient was in some way not eligible, but was granted funds anyway.
This program is another reminder that Austin city government taxes too much and spends too extravagantly. For those footing the bill, it means not only higher taxes, but also having to watch again (and again and again and again) as the city recklessly throws money away. In order to stop this kind of egregious government spending, the city needs to be forced to prioritize and do a better job of living within its means.