Opening Up the Fiscal Blinds – Data Act Mandates Transparency

Do you know where your money is being spent in the government? Now you will. Legislation mandating detailed reporting on federal spending passed the House Monday and is heading for President Obama’s signature.

The Digital Accountability and Transparency Act —also called the DATA Act —would expand agency transparency requirements to include spending data for all federal funds spent or granted by any federal agency. The data would continue through contractors and subcontractors or grantees in as much detail as possible, and would then be reported publicly on the spending website USAspending.gov.

Hudson Hollister, executive director of the Data Transparency Coalition, told Chris Dorobek on the DorobekINSIDER program that the Data Act is a good first step to making the government more open.

“The very first part of the mandate calls for the Treasury Department, the Office of Management and Budget and the White House to come up with the government-wide data standards that will cover all federal spending,” Hollister explained.

The legislation will also:

• Set government-wide financial data standards to make all spending data adhere to a uniform set of guidelines.
• Require Inspectors General at each agency to provide reports on the quality and accuracy of the financial data.
• Establish a cutting-edge data analytics center modeled after the Recovery Act that would help identify and prevent improper payments and expand analytic efforts across the government by serving agency leaders, inspectors general and watchdog groups.
• Mandate that after the two years the director of the Office of Management and Budget will issue guidance to agencies on how to streamline recipient reporting requirements and integrate that data into their own reporting.

“The Data Act is a strong mandate for robust government-wide data standards, including consistent government-wide identifiers for grantees and contractors, for grant and contracts, including also consistent formats for the reporting that must flow upward from agencies to the government-wide databases, and from grantees and contractors to agencies,” said Hollister.

The Data Act is not the first attempt at fiscal transparency – the government created spending.gov in 2006. “The Federal Funding Accountability and Transparency Act of ’06 which set up spending.gov was a good start,” said Hollister. “That was the first time we had any spending of any kind online, but spending.gov is only a summary of each grant and each contract, and because we don’t have consistent government-wide data standards, there’s no way to check it for quality,.The only way to be transformative is for the creation of government-wide data standards that are mandated in the Data Act.”

And fiscal transparency isn’t just helpful for the public – it’s also a tool that government can use internally to help save money and be more efficient. “Data transparency standards were deployed under the federal stimulus law, where grantees and contractors were required to submit reports on how they spent stimulus funds,” said Hollister. “That’s where we saw the first example of information being used internally by the government to do its own job better. The Inspectors General were able to use the data that stimulus grantees and contractors submitted to save over $100 million because of that accuracy.”

But it’s not all-smooth sailing; the administration had some fairly significant reservations about the Data Act. “We’ve seen concerns raised by the Office of Federal Financial Management with OMB. Commissioner Lebryk at the Fiscal Service in Treasury has put forth a vision of standardizing and publishing the whole lifecycle of federal spending,” said Hollister. “That means data standards for appropriations bills, for treasury allocations, for agency obligations, for the final expenditure, for awards, for sub awards. That vision that has come out of Treasury. If it’s fully implemented we’ll be able to track a dollar through each stage in its lifecycle.”

Hollister said the passage of the Data Act is only the first step. “I think it’s very important to note that even as we work on the implementation of the Data Act to transform federal spending from documents into open data that it is just one piece of the puzzle. We need to pass similar mandates in other areas of the government’s information. Next up for us will be financial regulation. We think that there is a crying need for financial regulators to adopt consistent data standards across different agencies for the miasma of reporting that happens under the securities laws, the banking acts and the commodities laws. So we can see the data act in context as a transformation for federal spending information, and we need to see that same transformation for other types of information as well.”

>>> Also check out, “DATA Act is a Big Win For Data Transparency.”