The Four Key Priorities of the Data Act that You Need to Know

The US Federal Government is the largest and most complex entity in human history. It has hundreds of different agencies with countless subdivisions and bureaus, making it impossible for anyone to have a consistent picture of its entirety. With such complexity, how can citizens begin to understand federal budgets and where their tax dollars go?

Back in May of 2014, the Data Act was passed with the goals to improve financial transparency for citizens and reduce budget waste. The act has two main focus areas: 1) Standardize data fields and formats around spending reports; and 2) Publish information in a machine-readable format. It may sound simple but it is far from.

So how exactly does the act work and why does it affect you?

In GovLoop’s recent online training, What the Data Act Means for the Future of Open Data, Hudson Hollister, Executive Director of the Data Transparency Coalition, discussed what the Data Act does and why it’s important.

Here are four key priorities of the Data Act:

• Establish standards. The Data Act requires the US Treasury Department and the White House Office of Management and Budget (OMB) to establish government-wide data standards for all federal spending reports. This means each agency or department will have its own electronic identification code for spending reports. This will allow anyone to search a particular program or agency’s spending report using its specific identification code.

• Universalize fields and formats. New data standards under the Data Act include: (1) consistent data fields (including agency identification codes), recipient identification codes, and program identification codes; and (2) an electronic structure that connects all the data fields.The goal of these formats is to allow one electronic structure to keep track of how different fields relate to each other so data reporting is accurate. The electronic structure would be able to detect the difference between an agency and a bureau. For example, the structure could calculate total revenue based on other revenue fields from different bureaus and agencies.

• Mandate data standards. The US Treasury Department and the White House are in charge of determining what each data standard is for all federal agencies. Once they finalize the standards US federal agencies must report their spending information using those data standards by May 2017.

• Create pilot program. So what do grantees and contractors do? There is no mandate for recipients of grants or recipients of contracts to use the data standards for their reporting requirements. Instead, the Data Act requires OBM to establish a pilot program to determine whether standards work properly. This means that OBM is running tests to see if it is possible to automate these standards for grantees and contractors. Depending on the results of the tests, OMB will decide whether or not to include grantees and contractors in the data standards reporting requirements for 2017.

The DATA Act is far from completion and May 2017 is rapidly approaching. To learn more about what the Act can do for you agency, view the training on-demand here.