Treasury says TARP costs $26.55 million through January

WASHINGTON (Reuters) - How much does it cost to spend $350 billion?

The U.S. Treasury said on Tuesday its administrative bill for the Troubled Asset Relief Program is expected to total $26.55 million through the end of January, mostly to pay for services such as accounting and custodial contracts.

In a report to Congress, the Treasury said it incurred $5.58 million in expense obligations through December 31.

Congress has released only the first half of the $700 billion bailout fund, which was approved in October 2008. The Treasury has allocated about $354 billion from the fund, but has released only about $257 billion for disbursement.

Of the January 31 administrative bill, $1.19 million was projected for direct personnel costs and $24.42 million for contracted services.

The Bank of New York Mellon Corp, the world's largest custodian of assets, was awarded a contract in October to provide custodial, accounting, auction management and "other infrastructure services" to the program, which was originally envisioned as an auction system to buy bad assets from banks.

It has since shifted to making direct capital investments in financial institutions and providing loans to aid the struggling U.S. auto industry.

(Reporting by David Lawder; Editing by Dan Grebler)