Federal Spending Needs More Transparency: The DATA Act and Reform

by Nick Schwellenbach, 5/21/2013

The House Oversight and Government Reform Committee unveiled its discussion draft of the Digital Accountability and Transparency Act of 2013 on May 10. This legislation, more commonly known as the DATA Act, is intended to bring unprecedented public transparency to federal spending by requiring more spending data to be published online, in a standardized format, and in a searchable, downloadable database.

In April 2012, the House unanimously passed the DATA Act, but it stalled in the Senate, even though it was introduced with bipartisan support in that chamber. Rep. Darrell Issa (R-CA), chairman of the House Oversight and Government Reform Committee, wrote in January that in "this Congress I believe we will make the DATA Act law."

Why We Need Reform

A number of laws and policies over the last several decades have sought to help the public gain a better sense of where their taxpayer dollars are going. Some of the most important data sources were created in the 1970s and early 1980s, notably the Federal Procurement Data System (FPDS), the Federal Assistance Awards Data System (FAADS), the Catalog of Federal Domestic Assistance (CFDA), and the Consolidated Federal Funds Report (CFFR).

FPDS tracks government contract actions. FAADS follows grants and other types of non-contract government spending assistance to outside entities. The CFDA aggregates federal spending and non-spending assistance. The Consolidated Federal Funds Report combined what's in the other two datasets with spending information on salaries, retirement, disabilities, and more, so it was the most complete.

In 2006, the Federal Funding Accountability and Transparency Act (FFATA) became law. It required that the information in FPDS and FAADS be searchable on one website by 2008. The Center for Effective Government (then known as OMB Watch) – working with a contractor – had earlier released an online database that did this called FedSpending.org. As the 2008 deadline loomed for the Office of Management of Budget (OMB) to produce its own website, OMB turned to the Center for Effective Government and licensed our website and software.

Thus, USAspending.gov was born.

But all was not well and still is not.

Unfortunately, the Consolidated Federal Funds Report was discontinued in 2012 (the 2010 report, released in 2011, is the final one available), and USAspending.gov does not include many of the types of spending information the report contained. And where there was overlap, the spending data in CFFR was shown to be far more accurate than the data currently included on USAspending.gov. Thus, the accuracy of publicly available, searchable budget information may have actually been reduced in recent years.

By way of example, the National Priorities Project blogged that USAspending.gov claims that zero dollars were spent on Medicare in 2007, 2011, and 2012 despite representing some 14 percent of the federal budget. A more comprehensive assessment by the Sunlight Foundation found that there is substantial misreporting of obligations on the site.

In 2010, Congress' investigative arm, the Government Accountability Office (GAO), stated, "In a random sample of 100 awards, GAO identified numerous inconsistencies between USAspending.gov data and records provided by awarding agencies," among other issues. Sub-recipient reporting falls far short of what FFATA requires, and there are many other problems, as well, as the Project On Government Oversight recently pointed out.

What the DATA Act Would Do

These issues have not gone unnoticed by Congress. Enter the DATA Act.

The version of the DATA Act that will be reintroduced in this Congress is similar to the Senate version from last fall, which is unfortunately less ambitious than last year's House-passed bill. The Data Transparency Coalition compared the two versions in a blog post; the House Oversight and Government Reform Committee has a one-page summary of the differences, as well.

The current version of the DATA Act would:

  • Include information about budget authority, obligations, and outlays on the agency, agency component, appropriations account, program, and object class levels (e.g. the nature of the obligation, such as personnel compensation, contracts, acquisition of capital assets, or grants), as well as any transferring of funds and unobligated funding;

  • Combine transaction-level obligation information (e.g. contracts signed, grants awarded, loans made) with outlays (the checks that are actually cut);

  • Assign universal unique identifiers to contract and grant awards;

  • Establish government-wide data standards;

  • Work to reduce improper payments;

  • Extend the Recovery Accountability and Transparency Board's life and have it review a data stream from USAspending.gov for completeness, timeliness, quality, and accuracy and submit a report every two years, as well examine data for indicators of fraud;

  • Create a pilot program with select major contractors and grant recipients to examine the feasibility of widespread recipient reporting of federal funds received, similar to what occurred under the Recovery Act; and

  • Transfer responsibility for running USAspending.gov from OMB to the Treasury Department.

What the DATA Act Wouldn't Do

While the DATA Act would create sweeping changes to the current system of federal spending reporting, it still won't fix some problems we feel are important.

  • Transaction-level information for certain types of spending would still not be available for things like Medicare. For instance, individual Medicare payments to doctors would not be included.

  • Even though they represent roughly $1 trillion in impacts to the government's bottom line each year, tax expenditures (i.e., exemptions and subsidies) are another area of "spending" that wouldn't be part of USAspending.gov.

  • As we wrote last year:

      Currently, there is no easily accessible, public linkage between an appropriation and a federal program because there is no set definition of what a "program" is. Instead, one must laboriously comb through appropriations bills, legislative report language, the president's budget, agency reports, and USAspending.gov and manually piece the chain together, making it almost impossible to see how and why any given dollar of federal funds was spent. To fix this problem, Congress must change the way it writes appropriations bills and create a more robust way to identify programs across the federal government. Unfortunately, the DATA Act does nothing to change how appropriations bills are written.

  • Contractor and grantee performance information would not be included in USAspending.gov.

  • The actual contracts and supporting documents, such as statements of work, will also not be available.

Challenges

Even within the scope of what the current DATA Act discussion draft intends to do, there will be great challenges. The different types of information – description, obligations, outlays, etc. – on federal spending in various forms are stored and collected in various places, even for the same transaction. Agencies – and offices and subdivisions within agencies – collect and format information in widely different formats. Many still use paper-based records to track spending and also utilize archaic computing technologies, making it difficult to link them up.

The problem is more than an information technology challenge; what is required is a different way of conceptualizing data. This will require some degree of subject-matter expertise to make sense of the data coming from the various parts of the federal government, which have wildly different missions.

While no means a final solution to the lack of transparency surrounding federal spending, the DATA Act will advance the ball significantly.