You need to spend your budget or you get less money. And frankly, some departments should recieve less if they come in under.
The problem is that the people who do an incompetent job and/or give out grants via patronage. They never really operating a competive service The over head is just disgusting.
You cannot fire the incompetent or the amoral. There is lots of fat to cut in these organizations. I know people that start out working hard on cases but then are nerfed to keep others from looking bad.
Hell I even offered to teach a google alert class for job seekers and the department free of charge. Did they do it... nah duplication of effort keeps their budget high and their employment stable.