USAspending.gov to Increase Transparency through Subrecipient Reporting

Since it was unveiled in 2007, USAspending.gov has been a crucial portal through which the federal government makes spending data available to the public. With new guidance on subaward reporting released in August, the Office of Management and Budget (OMB) has taken additional steps to ensure USAspending.gov will comply with the law that created the site and will make it possible to track more of the federal spending chain.

Many of the requirements in the guidance are mandated by a landmark transparency law from 2006, the Federal Funding Accountability and Transparency Act (FFATA). FFATA created USAspending.gov and called for federal award and subaward reporting, which would be reported to USAspending.gov. While the Bush administration launched USAspending.gov ahead of the required Jan. 1, 2008, deadline, it did not put in place the required subaward reporting by the law’s deadline, Jan. 1, 2009. The executive branch has thus not been in compliance with federal law for almost two years.

At present, USAspending.gov only includes information on so-called "prime recipients," those entities which directly receive federal funds. Since many federal projects involve myriad subawards, a complete picture of where federal funds flow remains incomplete. However, according to the new guidance, all prime recipients must begin collecting and reporting information on the next link in the federal spending chain to a central website, FSRS.gov (short for FFATA Subaward Reporting System), which will then send the information to USAspending.gov. By Oct. 1, prime recipients will begin reporting information on their subrecipients, including:

  • Subawardee DUNS (a unique code identifying each recipient; the DUNS numbering system is a proprietary system run by Dun & Bradstreet)
  • Subaward amount
  • Subaward date
  • Subawardee principal place of performance
  • Subaward number
  • Subaward Project Description

If the subawardee is registered with the Central Contractor Registry (CCR), the following fields will be prepopulated on the prime recipient’s report. If the subawardee is not registered in CCR, the prime recipient is required to fill in these fields:

  • Subawardee name
  • Subawardee address
  • Subawardee parent DUNS (if applicable)
  • Catalog of Federal Domestic Assistance (CFDA) number
  • Federal agency name
  • Subawardee executive compensation (if applicable)

With this data, USAspending.gov will contain another layer of spending information. However, the new guidance only pertains to "first tier-subrecipients," or the first level of entities which receive subgrants or subcontracts from prime recipients. Subsequent recipients are not required to report under this guidance. This means that if a federal agency makes an award to a state, and the state makes a subaward to a city, all of that information will be recorded and made public. However, if the city makes subawards to various entities to implement the work, that information will not be disclosed. Thus, the OMB guidance does not trace federal funding to the ultimate recipient(s).

Additionally, all prime and first-tier recipients must report on the compensation of their five highest-paid executives, so long as the entity brings in at least $25 million a year, at least 80 percent of which is from federal sources.

While the new guidance focuses on federal grants, the Federal Acquisition Regulation (FAR) Council released companion guidance for federal contractors a few weeks earlier in the form of an interim final rule. That rule should be made final in the coming weeks and is similar to the OMB guidance. (OMB Watch submitted comments on the proposed rule Sept. 7.)

The Obama administration has made compliance with FFATA, authored by then-Sen. Barack Obama (D-IL) and Sen. Tom Coburn (R-OK), a priority. The Bush administration had licensed software from FedSpending.org, a website developed in 2006 by OMB Watch to approximate requirements in FFATA, as its vehicle for implementing the law. The Bush administration put an emphasis on improving the speed of reporting data from federal agencies, and USAspending.gov did not change much until the Obama administration. Toward the end of May, OMB launched a redesign of the website, adding many new features and breaking from the look and feel of FedSpending.org.

Obama also placed early attention on spending disclosure under the American Recovery and Reinvestment Act (Recovery Act). As Obama said in his first primetime news conference on Feb. 9, 2009, "…every American will be able to go online and see where and how we're spending every dime."

In many ways, Recovery Act reporting has become a trial run for the new subaward reporting guidance. OMB worked with the Recovery Accountability and Transparency Board to develop guidance during 2009 on recipient and subrecipient reporting for the Recovery Act. The model was nearly identical to OMB’s current guidance: OMB required reporting by the prime recipient and one tier below the prime, and the Recovery Board created a centralized website called FedReporting.gov, where the entities could report online.

In some ways, however, the reporting requirements for the Recovery Act are more detailed than the current OMB guidance. For instance, prime recipients of Recovery Act funding must report how many jobs were created by their projects, a data point not required under FFATA. One big difference from Recovery Act reporting is that the current OMB guidance applies to nearly all federal spending, not just Recovery Act funds, so the scope is much larger and potentially more complex.

With this new guidance, OMB is moving federal spending transparency to a central, recipient reporting-based model, but it has made only preliminary steps toward an ideal reporting system. For a truly transparent system, OMB will still need to capture reports from the ultimate recipient of federal funds. Additionally, OMB will need to pay even more attention to data quality issues, as more entities will now be reporting. Finally, OMB has yet to announce how the new data will be presented on USAspending.gov.

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