Nelson has been investigating the practice for two years, and says he has found earmarked funding approved by Congress may have been reduced by as much as 19.5 percent in some cases without statutory authority, The Lincoln (Neb.) Journal Star reported Sunday.
"If unaccountable federal bureaucrats are diverting funds and skimming millions of dollars for undisclosed purposes, the taxpayers deserve to know," said Nelson, a member of the Senate Appropriations Committee.
He cited as an example the new agricultural research center at the University of Nebraska-Lincoln, saying it would lose $5 million -- 10 percent of its funding -- "without any authority from Congress."
The U.S. Department of Agriculture's Agricultural Research Service has said it assesses a 10 percent fee on earmarked funds to pay for "management costs," the newspaper said.
Congress has directed the Office of Management and Budget to disclose any diversion of earmarked funds by March 2009.
Nelson said he wants to determine the extent of the practice.