Data Transparency: Oversight Needed to Address Underreporting and Inconsistencies on Federal Award Website
Published: 2014-06-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Federal Funding Accountability and Transparency Act was enacted in 2006 to increase the transparency over the more than $1 trillion spent by the federal government on awards annually. Among other things, the act requires OMB to establish a website that contains data on federal awards (e.g., contracts and grants) and guidance on agency reporting requirements for the website, USASpending.gov.
GAO's objectives were to determine the extent to which (1) agencies report required award data and (2) the data on the website are consistent with agency records. To assess reporting, GAO reviewed laws and guidance, analyzed reported award data, and interviewed agency officials. To assess inconsistency, GAO selected a representative sample of 385 fiscal year 2012 awards and traced them back to agency source records.
section_title: What GAO Found
paragraphs: Although agencies generally reported required contract information, they did not properly report information on assistance awards (e.g., grants or loans), totaling approximately $619 billion in fiscal year 2012. Specifically, 33 of 37 agencies with a budget authority of at least $400 million reported at least one contract. The other four claimed exemptions from reporting, such as the use of non-appropriated funds, but gaps in Office of Management and Budget (OMB) guidance make it unclear whether such exemptions are appropriate. Also, agencies reported required information for at least one assistance award for 1,390 of 2,183 programs listed in a federal catalog. Another 451 programs did not make an award subject to USASpending.gov reporting. However, agencies did not appropriately submit the required information for the remaining 342 programs, although many reported the information after GAO informed them of the omission. Officials with the Millennium Challenge Corporation said that they could not report because its recipients are foreign. However, OMB's guidance describes how to report foreign assistance and other agencies report such awards. OMB has taken steps to improve the completeness of assistance awards on the website, including issuing a memorandum in June 2013 directing agencies to ensure that data on USASpending.gov are consistent with agency financial records. If properly implemented, these procedures could better ensure that agencies report future assistance awards.
Few awards on the website contained information that was fully consistent with agency records. GAO estimates with 95 percent confidence that between 2 percent and 7 percent of the awards contained information that was fully consistent with agencies' records for all 21 data elements examined. The element that identifies the name of the award recipient was the most consistent, while the elements that describe the award's place of performance were generally the most inconsistent. GAO could not determine whether the remaining data elements were significantly consistent or inconsistent, in large part because of incomplete or inadequate agency records. Four data elements in particular (e.g., program source information and the state of performance) had inadequacies that were significant. This means that for each of the four data elements, at least 10 percent of awards contained unverifiable information. While OMB placed responsibilities on agencies to ensure their reported information is accurate and substantiated by supporting documentation, this approach has had limited effect on the overall quality of the data on the website, reinforcing the need for a more comprehensive oversight process by OMB and more specific guidance from OMB on how agencies are to validate information reported to USASpending.gov. Until these weaknesses are addressed, any effort to use the data will be hampered by uncertainties about accuracy.
section_title: What GAO Recommends
paragraphs: To improve reliability of information on the USASpending.gov website, GAO is making recommendations to the Director of OMB to (1) clarify guidance on reporting award information and maintaining supporting records, and (2) develop and implement oversight processes to ensure that award data are consistent with agency records. GAO also recommends that the Chief Executive Officer of the Millennium Challenge Corporation report its award information, as required. OMB generally agreed with GAO's recommendations. While the Millennium Challenge Corporation neither agreed nor disagreed with the recommendation, GAO believes it is needed, as discussed in this report.

section_title: Letter
paragraphs: The federal government spends more than $1 trillion awarded in the form  of contracts, grants, loans, and other awards. To increase the  transparency of and accountability for that spending, Congress passed  the Federal Funding Accountability and Transparency Act (FFATA) in  2006. Among other things, the act requires the Office of Management  and Budget (OMB) to ensure the existence and operation of a free,  publicly accessible website containing data on federal awards and  subawards. In addition, FFATA requires agencies to comply with OMB  instructions and guidance for reporting award information. OMB launched  the website—www.USASpending.gov—in December 2007.
Our objectives were to determine the extent to which (1) federal agencies  report required award data and (2) inconsistencies exist between the data  on USASpending.gov and records at federal agencies.
To address these objectives, we examined data collection and reporting  requirements under FFATA; relevant OMB guidance, other relevant  requirements variously published in the Federal Acquisition Regulation,  Code of Federal Regulations, and the Federal Register, and agency  systems documentation. To determine the extent to which federal  agencies are reporting required award data, we searched  USASpending.gov to determine which selected agencies reported  contractual information for fiscal year 2012. We also compared programs  listed in the Catalog of Federal Domestic Assistance (CFDA) against  assistance programs reported on USASpending.gov in fiscal year 2012.  To determine the extent to which inconsistencies existed between the  data on USASpending.gov and records at federal agencies, we selected  a simple random sample of 385 records and traced them back to agency  source data for required data elements. The probability sample was  designed to estimate a rate of reporting errors for all fiscal year 2012  awards reported on USASpending.gov with a sampling error of no greater  than plus or minus 5 percentage points at the 95 percent level of  confidence. We interviewed officials responsible for maintenance and  oversight of the website from OMB, the General Services Administration  (GSA), and the Department of the Treasury (Treasury). We also  interviewed officials at each of the executive branch agencies within the  scope of our audit (identified in appendix II). Finally, we reviewed our  previous work on the quality of data reported to the Federal Procurement  Data System-Next Generation (FPDS-NG) and the website and actions  OMB took to address our recommendations. For a full description of our  objectives, scope, and methodology, see appendix I.
We conducted this performance audit from December 2012 to June 2014,  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: FFATA as amended by the Government Funding Transparency Act of  2008, gave OMB responsibility for ensuring the existence and operation  of a website that captures specific information on federal awards (e.g.  contracts, loans and grants). The website is to promote transparency in  government spending by providing the public with the ability to track  where and how federal funds are spent. Agenciesspecific information on awards made in fiscal year 2007 and later along  with other relevant information specified by OMB, and awards were to be  added to the site within 30 days after the award was made. Further,  agency financial award reporting is limited by several exemptions  provided by FFATA and OMB guidance, including exemptions for  reporting of transactions made to individuals, those under $25,000, and  any containing classified information. Table 1 lists and describes the  required data elements.
subsections: section_title: Sources of Data on USASpending.gov
paragraphs: The information displayed on USASpending.gov is derived from several  sources:
Contract data are imported from the Federal Procurement Data  System-Next Generation (FPDS-NG), which collects information on  contract actions. GSA, with guidance from OMB’s Office of Federal  Procurement Policy, established and administers this system. Since  1980, FPDS-NG and its predecessor have been the primary  contracting databases used government-wide. Federal agencies are  responsible for ensuring that the information reported in this database  is complete and accurate. Additionally, FPDS-NG pre-populates core  vendor data using the System for Award Management (SAM). SAM  is the primary database for information on potential government  business partners in which those wishing to do business with the  federal government must register.
Data on financial assistance awards (e.g., grants) are received from  reports submitted by agencies in a file format called Federal  Assistance Award Data System PLUS (FAADS+). To report  information on financial assistance awards to USASpending.gov,  OMB guidance requires agencies to submit FAADS+ files directly  through the USASpending.gov web submission tool, the Data  Submission and Validation Tool, maintained and operated by GSA.  The Data Submission and Validation Tool applies data validation  checks to 32 data fields. For example, the recipient name must be  non-blank and must contain the value “MULTIPLE RECIPIENTS” for  awards aggregated at the county level. The tool will reject individual  records that contain an error or entire submissions if more than 10  percent of the records in the submission contain errors.
The FFATA Subaward Reporting System (FSRS) provides data on  first-tier subawards. and/or subawardee executive compensation information through  FSRS. The subawardee provides to the prime awardee all information  required for such reporting. This includes subawardee entity  information, subawardee unique identifier and relevant executive  compensation data, if applicable. Additionally, FSRS pre-populates  data using FPDS-NG, SAM, and USASpending.gov, where  applicable.
OMB, Memorandum for Senior Accountable Officials: Open Government Directive –  Federal Spending Transparency and Subaward and Compensation Data Reporting  (Washington, D.C.: Aug. 27, 2010).
In addition, USASpending.gov uses other data sources to supplement  and validate agency-supplied data. These sources include:
CFDA—CFDA is a government-wide compendium of federal  programs, projects, services, and activities that provide assistance or  benefits to the American public, and is the authoritative source for  CFDA program numbers. This database is used to validate CFDA  numbers provided by agencies.
Dun and Bradstreet—This commercial entity maintains a repository of  unique identifiers and is used to validate unique identifiers provided by  agencies and to acquire the parent entity unique identifier based on  linkage information at the time of the award.
SAM—Information in SAM is used to pre-populate specific contractual  information contained in FPDS-NG based on the unique identifier  submitted by an agency. Among other things, SAM populates the  entity name and address (street, city, state, congressional district, zip  code, and country). If a subawardee is registered in SAM, executive  compensation and other subawardee information is pre-populated in  FSRS prior to the prime awardee’s reporting.
section_title: OMB Has Issued Guidance for Reporting Award Information
paragraphs: OMB issued a series of guidance documents to facilitate accurate  reporting of information to the website. For example, OMB guidance  requires agencies to increase efforts to improve data quality by outlining  high-level reporting requirements, focusing primarily on validation of  unique identifiers for recipients, collection of program source data, and  formatting of assistance data prior to submission.
OMB guidance further requires agencies to designate a high-level senior  official to be accountable for information on USASpending.gov and  requires agencies to submit a quarterly report on their progress toward  improving data quality. In June 2013, OMB issued a memorandum  requiring each federal agency to assign financial assistance award  identification numbers unique within the federal agency and to identify  and implement a process to compare and validate website funding  information with data in the agency’s financial system. Based on this  validation process, each agency is to report to OMB the accuracy rate of  its website data on a quarterly basis.
OMB guidance also outlines the reporting requirements on first-tier  subawards and executive compensation of awardees, focusing on  reporting requirements related to federal grants and cooperative  agreements. Detailed reporting requirements related to federal contracts  are located in the Federal Acquisition Regulation. Among the specific  requirements described in OMB’s guidance, prime awardees are to report  first-tier subawards and executive compensation associated with new  federal contracts and grants as of October 1, 2010, and register in SAM.  For contracts, agencies shall include these requirements in all new  contracts. For assistance awards, agencies shall include these  requirements in each program announcement, regulation, or other  issuance containing instructions for the applicant. The agency is not  required to review data for which it would not normally have supporting  information, such as the executive compensation information.
To provide maximum transparency to the public in the use of all federal  funds, OMB directs agencies to report awards that would otherwise be  exempt from reporting–specifically, those under $25,000 and awards to  individuals—as an aggregated amount, where possible. An aggregated record is created by taking a group of similar records and tallying the  dollars based on a specific set of data fields in order to create one  summary, or aggregated, record. Aggregated records are to be reported  as follows:
Transactions under $25,000—Agencies should submit information  under $25,000 at a transaction level. If necessary, agencies may  report these as county-level aggregate amounts.
Payments to individuals—Agencies should not report payments to  individuals at a transaction level, to protect their privacy. All payments  to individuals should be reported as an aggregated amount.
The transaction information submitted in FAADS+ files usually contains  data in each field, except where the submitting agency is unable to  provide those data. As a general principle, OMB guidance calls for  agencies to provide as much information as possible on their aggregate  records. However, OMB guidance allows the exclusion of certain data  elements, since data for numerous transactions are summarized into one  record.
section_title: Responsibility for USASpending.gov Operations Will Be Transferring to Treasury
paragraphs: Prior to 2014, GSA was responsible for operating and maintaining the  USASpending.gov website in accordance with OMB guidance. In  February 2014 OMB announced the transfer of those responsibilities to  Treasury’s Fiscal Service. Treasury also received funding in the  Consolidated Appropriations Act 2014, for website maintenance,  improvements to the site’s functionality and usability, and data  standardization efforts.
As of May 2014, Treasury had not yet taken on operational responsibility  of the website. According to the Assistant Commissioner for Government- wide Accounting at the Fiscal Service, Treasury has begun developing a  plan for transferring operational responsibility from GSA to Treasury.
section_title: Prior GAO Reports Recommended Improvements to Federal Award Data
paragraphs: In prior audits, we have looked at several areas which impact the  reliability of USASpending.gov data. Since 2003, we have issued several  reports and offered testimony on data reliability issues associated with  FPDS-NG and its predecessor, FPDS. Our reviews of contract award  data in these systems have revealed inaccurate and incomplete  reporting. To help improve data reliability in FPDS-NG, we  recommended that OMB work with agencies to implement systems for  contract writing that connect directly to FPDS-NG and provide  confirmation of agencies’ review and verification of the accuracy and  completeness of their data in FPDS-NG. We also recommended that  OMB develop a plan to improve the system’s ease of use and access to  data for government-wide reporting needs. In response to our  recommendations for improving the accuracy and timeliness of contract  award data, OMB issued a memorandum in August 2004 directing  agencies to ensure that their contract writing systems could electronically  transfer information directly to FPDS-NG. In March 2007, OMB issued a  memorandum requiring agencies to regularly certify the accuracy and  completeness of its information to GSA. In November 2007, May 2008,  and June 2009, OMB issued additional guidance to agencies that  addressed improvements in data quality.
GAO, Electronic Government: Implementation of the Federal Funding Accountability and  Transparency Act of 2006, GAO-10-365 (Washington, D.C.; Mar. 12, 2010).
USASpending.gov website, we recommended, among other things, that  the Director of OMB revise guidance to federal agencies on reporting  federal awards to clarify the requirement that award titles describe the  award’s purpose and requirements for validating and documenting  agency award data submitted by federal agencies; and include  information on the city where work is performed in OMB’s public reporting  of the completeness of agency data submissions. Although OMB  generally agreed with our findings and recommendations, it has not yet  implemented our recommendations to clarify guidance or include  performance information.
GAO, Federal Data Transparency: Opportunities Remain to Incorporate Lessons  Learned as Availability of Spending Data Increases, GAO-13-758 (Washington, D.C.;  Sept. 12, 2013). with the Government Accountability and Transparency Board, has begun  taking steps to obtain stakeholder input as improvements to collecting  spending data are developed.
section_title: Agencies Generally Reported Contracts, but Many Assistance Programs Were Not Reported
paragraphs: Although agencies generally reported information for contracts to  USASpending.gov, they did not properly report information on assistance  awards, totaling nearly $619 billion. With few exceptions, FFATA and  supplemental OMB guidance require agencies to report spending  information on federal awards to USASpending.gov. We found that  agencies generally reported information on contracts but did not report  timely assistance information, leading to underreporting of nearly $619  billion for awards made in fiscal year 2012. Many of those awards were  subsequently reported by agencies. One agency, the Millennium  Challenge Corporation, reported an ongoing inability to report its awards  because its recipients are foreign governments or non-governmental  organizations. However, OMB’s guidance describes how to report foreign   In June 2013, OMB  assistance and other agencies report such awards.issued a memorandum directing agencies to establish procedures to  ensure that financial data reported on USASpending.gov is consistent  with agency financial records. If properly implemented, these procedures  could better ensure that agencies fully report future assistance awards.
subsections: section_title: Most Agencies Reported Spending Data on Contracts
paragraphs: According to FFATA and OMB guidance, information on contracts made  with funds appropriated in fiscal year 2007 and later is to be reported by  agencies and made available on USASpending.gov. Of the 37 agencies  with budget authority of at least $400 million each in fiscal year 2012, the  website includes information on at least one contract awarded by 33 of  the agencies.
The USASpending.gov website states that expenditures made with non- appropriated funds are not to be reported. Of the four agencies that did  not report contractual information, officials from three  stated that their contracts are awarded using funds that are available outside of annual  appropriations and therefore considered to be non-appropriated and  exempt from reporting. However, agency funding can be appropriated by  means other than through an annual appropriations act. For example, a  permanent appropriation makes funds available on the basis of previously  enacted legislation, such as statutory authorization for self-financing  through offsetting collections. Each of these three agencies receives a  form of appropriation other than through an annual appropriations act,  and this is used to fund their contract awards. Because the  USASpending.gov website does not define what constitutes non- appropriated funds, it is unclear whether agencies making awards using  funds received on the basis of an appropriation other than an annual  appropriation are required to report.
The fourth agency—the Central Intelligence Agency—stated that it did not  report contracts due to concerns about the ability of someone to use them  to infer agency requirements. Specifically, a liaison official from the  Central Intelligence Agency stated that it does not report information on  classified contracts to USASpending.gov. This practice is consistent with  FFATA, which does not require the disclosure of classified information.  The official added that the agency also does not report unclassified  contract information because of the risk that an individual could use it,  along with other publicly available information to develop a picture of  Central Intelligence Agency requirements (e.g., key information about the  agency). Therefore, the Central Intelligence Agency restricts the release  of both classified and unclassified information, including information on  contracts, in order to protect intelligence sources and methods. However,  OMB’s guidance does not clearly exempt agencies from reporting  unclassified contract information that they believe must not be disclosed.
Without clear OMB guidance to define the type of appropriated funds  exempt from reporting or how to report information on unclassified awards  that raise concerns related to intelligence operations, it is unclear whether  justifications from each of the four agencies for not reporting its contracts  are appropriate.
section_title: Hundreds of Billions of Dollars in 2012 Awards Were Not Properly Reported
paragraphs: As with contracts, information on assistance awards made using funds  appropriated in fiscal year 2007 and later is to be reported by agencies  and made available on USASpending.gov. While agencies are to report  the amount of federal funding awarded for most types of assistance  programs, OMB guidance requires that agencies report a face value and  long-term subsidy costs for loan programs. OMB also calls for agencies to  report awards under $25,000 and awards to individuals as an aggregated  amount, where possible.
section_title: Information on USASpending.gov Was Largely Inconsistent with Agency Records or Unverifiable
paragraphs: Among fiscal year 2012 awards reported on USASpending.gov, most  contained information that was not fully consistent with agency records or  was unverifiable due to gaps in agency records. Award data displayed on  the website consists, in part, of 21 data elements required by FFATA.  According to OMB guidance, the goal of the website was to have 100  percent of award data be accurate by the end of fourth quarter for fiscal  year 2011, meaning the information is the same as (consistent with) the  information contained in agency records or other authoritative sources.
However, the USASpending.gov data for fiscal year 2012 infrequently  approached OMB’s goals for data quality. Specifically, of our sample of  385 awards, 4 percent contained information that was fully consistent with  agency records for all 21 data elements. Projecting to the entire set of  fiscal year 2012 awards, we estimate that only 2 percent to 7 percent of  awards contain information that is fully consistent with agency records for  all 21 data elements, and thus is also consistent with OMB’s goal.
Further, across all awards, only one of the data elements we tested met  our criterion for significant consistency with agency records, while eight  did not. We considered a data element to be significantly consistent if we  estimated that for at least 90% of fiscal year 2012 awards, the information  displayed on USASpending.gov were consistent with the information in  the awarding agency’s records. Conversely, we considered an element  significantly inconsistent if we estimated that in more than 10 percent of  awards, the USASpending.gov information for that element and the   We could not  underlying agency records were not in agreement. determine whether the remaining data elements were significantly  consistent or inconsistent, in large part because of incomplete or  inadequate agency records.
subsections: section_title: One Data Element Had Information that Was Significantly Consistent with Information in Agency Records
paragraphs: We define a variable as “significantly” inconsistent for USASpending.gov if the lower  bound of the 95 percent confidence interval for the estimated percent of records with  inconsistent data is greater than 10 percent. We define a variable as “significantly”  consistent for USASpending.gov if the lower bound of the 95 percent confidence interval  for the estimated percent of records with consistent data is greater than 90 percent. was almost always consistent with the underlying information in  agency records.
section_title: Eight Data Elements Had Information That Was Significantly Inconsistent with Information in Agency Records
paragraphs: While only one data element contained information that was significantly  consistent with agency records, eight were significantly inconsistent for  fiscal year 2012 awards, with estimated rates on inconsistency of at least  10 percent (see table 4).
Award title descriptive of the purpose of each funding action:  The title contained inconsistent information for 24 percent through 33  percent of awards. Of these, most were inconsistent with FFATA’s  requirement that an award title be descriptive of the purpose of the  award. Instead, many titles consisted of shorthand descriptions,  acronyms, or other language that did not convey intent for the funding.  For example, according to an official in the Defense Procurement and  Acquisition Policy group, personnel often use terminology that is only  understood by other agency officials, without considering whether it  can be understood by the general public. For example, the award title  for one award at the Department of Defense was reported as “Cca.”  The associated delivery order indicated that the purpose of the award  was to analyze the repair cost of several items including “Cca,” which  refers to a “circuit card assembly,” and comprises less than a quarter  of the total cost of the award.
Recipient street and zip code: The recipient street element  contained inconsistent information for 13 percent through 21 percent  of awards; and the recipient zip code was inconsistent for 10 percent  through 18 percent. For example, for an Air Force award to BAE  Systems Technology Solutions & Services Inc., the vendor’s address  was reported on USASpending.gov as 1601 Research Blvd in zip  code 20850-3173, while the contract documentation showed the  vendor to be located at 520 Gaither Road in zip code 20850-6198. In  another example, a Department of Education award issued to one  component of the SLM Corporation was reported on  USASpending.gov with an address for a different component of the  corporation.
Recipient congressional district: The recipient congressional  district contained inconsistent information for 12 percent through 19  percent of awards. This included cases in which the website displayed  an incorrect congressional district, omitted the district, or erroneously  displayed a district for a foreign awardee.
Principal place of performance city: The city of performance  contained inconsistent information for 22 percent through 31 percent  of awards. This included cases in which agencies reported the  recipient’s business address as the place of performance, even when  the work funded by an award was performed in another location. In  other cases, agencies reported a county instead of the specific city for  some awards. For example, several awards from the Federal Highway  Administration reported the county name on USASpending.gov  instead of the city as the primary locator.
Principal place of performance congressional district: The  congressional district of performance contained inconsistent  information for 20 percent through 28 percent of awards. Many of  these inconsistencies were because the website displayed “zz” for this  element.
Principal place of performance country: The information on the  country of performance contained inconsistent information for
29 percent through 38 percent of awards. Nearly all of these cases  were assistance awards aggregated at the county level, for which the  field was reported by the awarding agency but not displayed on the  website.
Unique identifier for the parent entity: The Parent DUNS number,  used to uniquely identify parent entities (if applicable) doing business  with the government, contained inconsistent information for 26  percent through 35 percent of awards. DUNS numbers are provided  to the government through a contract with Dun and Bradstreet, a  commercial entity. Nearly all of these cases were assistance awards,  for which the field is not displayed on the website.
Report formatting for the website and the existing contract with Dun and  Bradstreet along with an unclear reporting requirement and incomplete  oversight of agency reporting processes contributed to many of the  inconsistencies. Specifically:
Display format on USASpending.gov: Inconsistencies in the  recipient congressional district and place of performance  congressional district and country fields are partly attributable to the  website either not displaying the information or improperly displaying  it. Officials from the Integrated Award Environment program  management office at GSA stated that the principal place of  performance country was not displayed on the website because the  report format was missing that field. Further, officials stated that the  recipient congressional district displayed incorrect information in some  cases due to a logic error on the website. As of April 2014, GSA made  technical changes to the website which addressed these issues.
Access to vendor-provided data: GSA officials stated that the  parent unique identifier was not displayed on the website for  assistance awards because its contract with the provider of that  information, Dun and Bradstreet, only covers publishing the data for  contract awards. According to these officials, GSA plans to add this  data in an upcoming service pack in 2014.
Lack of clear guidance: Multiple agency officials attributed  nondescriptive award titles to a lack of guidance to define what  constitutes a fully descriptive award title. We identified this as an issue  in our March 2010 report, in which we recommended that OMB  provide clarifying guidance on this reporting requirement. As of April  2014, OMB officials stated that the office still concurs with this  recommendation. However, OMB has not yet provided clarifying  guidance. Unless each award has a descriptive title clearly identifying  the purpose of the award, the public may not be able to determine  why the award was made and taxpayer dollars spent.  Incomplete oversight of agency reporting processes: Agency  reporting processes for which there is incomplete oversight to identify  and correct mistakes contributed to several of the significantly  inconsistent data elements. For example, multiple agency officials  attributed inconsistent recipient congressional district information to a  system lookup that automatically generates this information based on  a zip code. They stated that inconsistencies were caused when the  zip code was incomplete or incorrect, or when the lookup table was  out-of-date.
Further, for the recipient street address and zip code, inconsistencies  occurred, in part, because agencies did not update FPDS-NG with the  correct information. For a new contract, FPDS-NG relies on the  recipient’s unique identifier to automatically populate the recipient’s  address from SAM, but for a modification to an existing contract, the  system uses the address from the base award unless the agency  submits an updated address. Meanwhile, the system for entering  information on assistance awards does not have the capability to  automatically generate address information, so OMB directed  agencies to verify recipients’ addresses against Dun and Bradstreet’s  information, and enter a confidence code, provided by Dun and  Bradstreet, to confirm the information had been verified. However, we  estimate that agencies submitted a confidence code that meets  OMB’s threshold for only about a thirdtransactional assistance awards, and the validation rules applied by  the website do not validate these elements except to ensure that they  are non-blank and, in the case of the zip code, contain five digits.
Lastly, inconsistencies in the principal place of performance  information were caused, in part, by agency processes that resulted in  the wrong data being reported. For example, officials from the Federal  Highway Administration stated that the agency reported the county  instead of the city because the Federal Aid Highway Program  mandates the use of county names. In another example, the Chief of  the Payment Management Office at the Department of Agriculture  stated that its award tracking system is programmed to use the  business address if a specific principal place of performance address  is not provided. However, these practices are inconsistent with  FFATA’s requirement that agencies report the city, state,  congressional district, and country of performance for each award.  Based on relevant guidance, if work occurs across multiple cities, the  agency should report the city in which the majority of the work took  place. Because there was no oversight to verify that the agencies  were following this guidance, each continued to report information that  was inconsistent with the guidance.
Weaknesses in OMB’s guidance on data validation likely contributed  to these problems remaining unaddressed. We identified this as an  issue in our March 2010 report, in which we stated that OMB’s  guidance specified that agency data submissions are to be validated  by an appropriate official but did not identify how or by whom. In that  report, we recommended that OMB provide guidance to agencies to  clarify the requirement for validating agency award data. As of April  2014, OMB officials stated that the office still concurs with the  recommendation, and stated that it had initiated a validation process  in its June 2013 memorandum that directed agencies to use data from  their financial systems or other authoritative sources to validate  financial data reported on USASpending.gov.
However, this validation process only focuses on the award amount  but does not address the remaining 20 data elements. Further, OMB  decided not to implement one oversight mechanism it had previously  considered using—a dashboard displaying the quality of agency data  submissions on the website. In addition, the recently enacted Digital  Accountability and Transparency Act of 2014 established  requirements for agency inspectors general and GAO to periodically  review agency spending data. However, because these requirements  do not come into effect until November 2016, it will be some time  before they affect the quality of agency spending data. Thus, until  OMB implements a process to ensure that agencies report consistent  information for each required data element, it risks continued  inconsistencies that significantly limit the accuracy of data displayed  on USASpending.gov.
section_title: Twelve Data Elements Could Not Be Determined to Be Significantly Consistent or Inconsistent Due to a Lack of Supporting Documentation
paragraphs: For the 12 remaining data elements, incomplete or inadequate agency  records prevented us from determining whether they were significantly  consistent or inconsistent. OMB directed agencies to ensure that  USASpending.gov reporting contains information that is consistent with  agency records or other authoritative sources. OMB did this twice. Most  directly, in its April 6, 2010, memorandum that requires agencies to  ensure reporting is accurate, and defines this as “the percentage of  transactions that are complete and do not have inconsistencies with  systems of record or other authoritative sources.” Earlier, OMB issued  more general guidance directing agencies to have a process that enables  the agency to substantiate (by documentation or other means) the quality  of information it disseminates.
However, for 12 of the data elements, we could not determine the extent  of consistency or inconsistency because agency records provided to us  did not always include definitive information adequate to verify the  information reported on USASpending.gov (see table 5).
Four data elements in particular exhibited a significant amount of  unverifiable information, meaning that at least 10 percent of awards  contained unverifiable information for these data elements. Specifically,  we found that:
CFDA number: FFATA requires agencies to identify and display on  USASpending.gov the assistance funding agency and CFDA program  number. However, records provided to us did not include definitive  information adequate to verify the information reported on  USASpending.gov for the CFDA program number for 12 percent  through 22 percent of assistance awards. For example, our  representative sample contained four assistance awards identified in  USASpending.gov under CFDA program 64.012, Veterans  Prescription Service. However, records provided by the agency did  not identify the CFDA program number nor distinguish funding from a  number of other medical benefits programs.
Program source agency and account codes: Treasury’s Account  Symbol was selected to be used as the official program source for use  on the website and is made up of two related codes: agency code and  account code. OMB guidance requires agencies to ensure that award  documents contain the predominant Treasury Account Symbol.  However, records provided to us did not include definitive information  adequate to verify the information reported on USASpending.gov for  the data element agency code for 14 percent through 21 percent of  awards and 19 percent through 27 percent for the account code. For  example, officials from Department of Veterans Affairs Data Quality  Services stated that program source information could not be  provided because there was no documented link between the award  and the program source information stored in the financial system. For  another award, the Office of Personnel Management provided a  system screenshot that documented charge account information.  However, the office did not provide supporting documentation to show  how the charge account information tracked to the program source  reported on USASpending.gov.
Principal place of performance state: Guidance on  USASpending.gov states that the place of performance should be  reported as the place where the majority of work takes place, while   reporting. However,  other specific guidance is available for contractrecords provided to us did not include definitive information adequate  to verify the information reported on USASpending.gov for the place  of performance state for 23 percent through 31 percent of awards. For  example, five contractual transactions for pharmaceuticals, conducted  by the Defense Logistics Agency, were with the same entity but  agency records did not specify the vendor location responsible for  distribution of these pharmaceuticals. In another example, the source  system for an award at the Farm Service Agency did not contain place  of performance information and therefore provided empty spaces to  the system which generates reports to USASpending.gov.
Several factors contributed to agencies’ lack of records to verify award  information:
Lack of clear guidance: No guidance on how to substantiate  information reported to USASpending.gov contributed to a lack of  records to verify several data elements. In particular, agencies  generally use electronic systems to manage awards, but the CFDA  program number is not routinely included in the electronic records.  Instead, according to officials at several agencies, the CFDA program  number is reported at the time information is reported to the website  and officials do not document this decision in the system.
Moreover, in one case, officials stated that the agency relies on an  automated process whereby the address of the recipient of a contract  is reported to USASpending.gov as the place of performance, which  may or may not be correct. As this is an automated process, the  agency does not document place of performance information in the  contract file. By not capturing this information in some authoritative  source, the information displayed on the website is not verifiable.
Agency compliance with existing guidance: Multiple agency  officials attributed a lack of program source documentation to this  information being stored in a financial system and therefore not  always accessible. However, OMB guidance requires agencies to  ensure that award documents, and not the financial system, contain  this information.
Without more specific guidance on how agencies are to substantiate the  information required to be reported to USASpending.gov and a process to  ensure adherence to that and existing guidance, agencies will be  constrained in their ability to comply with OMB guidance requiring agency  validation of award information.
section_title: Two Additional Data Elements Could Not Be Tested
paragraphs: In addition to the required data elements we tested, there are two  additional types of data that should be displayed on USASpending.gov,  executive compensation and subaward information. As discussed earlier,  it is the responsibility of a prime awardee to report subaward and  executive compensation information.
We were unable to test the consistency of these data elements because  agencies frequently do not maintain records to verify the information  reported by the awardees. For example, the Federal Highway  Administration issued 12 awards included in our sample, 3 of which  displayed subaward information on the website. A senior financial policy  analyst for the Office of Financial and Management Programs at the  Federal Highway Administration stated that the entering of subaward  information is the responsibility of a state’s Department of Transportation  and not a part of the federal Department of Transportation process. She  added that there is not a process whereby the Department of  Transportation confirms the validity of subaward information entered in  FSRS. As such, officials could not provide agency records with subaward  information for any of the 12 awards included in our sample. Officials with  the Federal Highway Administration added that the same issue pertained  to the verification of executive compensation information displayed on  USASpending.gov. Without agency records on subawards and executive  compensation, we could not test whether the information reported by  prime awardees is accurate.
section_title: Conclusions
paragraphs: Fulfilling FFATA’s purpose of increasing transparency and accountability  of federal expenditures requires that USASpending.gov contain complete  and accurate information on applicable federal awards. However, our  examination of awards identified significant underreporting of awards and  few that contained information that was fully consistent with the  information in agency records. While OMB placed additional  responsibilities on agencies to ensure their reported information was  accurate, our testing of the 2012 awards shows that this approach has  had limited effect on the overall quality of the data. In addition, many of  the specific issues we first identified in 2010, such as unclear award titles  and inaccurate information on place of performance, continue to limit the  reliability of USASpending.gov data. If properly implemented, OMB’s  2013 guidance on linking award financial information to information from  agency financial systems and reporting the results on a quarterly basis  could help address underreporting of awards. However, the ongoing  inaccuracies in reported non-financial award information reinforce the  need for a more comprehensive oversight process. Finally, gaps in  records used to validate the data on the website continue to exist.
Until these issues are addressed, any effort to validate USASpending.gov  data will be hampered by uncertainties about the accuracy of the data.  The transition of operational responsibility for the USASpending.gov  website to Treasury presents an opportunity to reexamine the appropriate  level and methods of oversight and to develop and implement procedures  that more effectively ensure that data reported to USASpending.gov are  complete and accurate enough to fulfill the purpose of FFATA.
section_title: Recommendations for Executive Action
paragraphs: To improve the completeness and accuracy of data submissions to the  USASpending.gov website, we recommend that the Director of the Office  of Management and Budget, in collaboration with Treasury’s Fiscal  Service, take the following two actions:  clarify guidance on: agency responsibilities for reporting awards funded by non-annual  appropriations;  the applicability of USASpending.gov reporting requirements to  non-classified awards associated with intelligence operations;  the requirement that award titles describe the award’s purpose  (consistent with our prior recommendation); agency maintenance of authoritative records adequate to verify  the accuracy of required data reported for use by  USASpending.gov; and develop and implement a government-wide oversight process to  regularly assess the consistency of information reported by federal  agencies to the website other than the award amount.
To improve the completeness of foreign recipient data on the  USASpending.gov website, we recommend that the Chief Executive  Officer of the Millennium Challenge Corporation direct responsible  officials within the Corporation’s Department of Administration and  Finance to report spending information on all assistance award programs  to USASpending.gov for prior and future fiscal years in accordance with  statutory requirements and OMB guidance.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to GSA, OMB, the Millennium Challenge  Corporation, and Treasury for review and comment. GSA provided  technical comments only, which we have incorporated as appropriate.  OMB generally agreed with our recommendations. The Millennium  Challenge Corporation and Treasury neither agreed nor disagreed with  our recommendations. Each agency’s comments that we received are  discussed in more detail below.
In oral comments, staff from OMB’s Office of Federal Financial  Management stated that the agency generally agreed with our  recommendations for OMB to clarify guidance and develop and  implement a government-wide oversight process to improve  completeness and accuracy of data submissions to the  USASpending.gov website. OMB staff stated that these  recommendations are consistent with future actions required by the  Digital Accountability and Transparency Act of 2014, including  establishment of a government-wide financial data standard and  periodic review of agency spending data by inspectors general. Staff  stated that OMB in conjunction with Treasury will consider interim  steps to improve data quality but added they do not want to inhibit  agency efforts to work toward implementation of the act.
We agree that the newly enacted provisions of the act could  eventually help improve the quality of federal spending data. We  believe that our recommendations are not in conflict with adherence to  the act but rather will help agencies to take steps towards achieving  the core tenets of data transparency reflected in the act. Accordingly,  it will be important for OMB to fully address our recommendations.
In e-mail comments, staff from the Millennium Challenge  Corporation’s Financial Management Division neither agreed nor  disagreed with our recommendation that the corporation should report  spending information on all assistance award programs to  USASpending.gov for prior and future fiscal years in accordance with  statutory requirements and OMB guidance. However, agency  comments reflect general disagreement. Specifically, staff stated that  the Millennium Challenge Corporation has made significant attempts  to load foreign assistance data on USASpending.gov but has been  unable to do so due to technical limitations of the website. However,  we found that the attempted transmittal submitted by the Millennium  Challenge Corporation for our review was rejected because the  corporation omitted most of the data fields required by FFATA and  guidance for the website, including several for which the required  information should be readily available regardless of the recipient,  including the transaction type, funding amount, and project  description. Moreover, other agencies have successfully submitted  data on assistance awards to foreign governments such as the  Departments of Defense, Health and Human Services, and State.
Agency staff also noted that the Millennium Challenge Corporation  continues to work with GSA and OMB to resolve the technical issues  preventing transmittal of the data in order to reach full compliance in  the future. Specifically, the Millennium Challenge Corporation staff  indicated that the corporation had asked OMB for an alternate  reporting mechanism. However, until OMB agrees to an alternate  approach, the Millennium Challenge Corporation is required by OMB  guidance to use the existing mechanism to report its awards in the  same manner as other agencies that make awards to foreign  governments. Accordingly, we maintain our recommendation.
Treasury stated in its comments that the bureau will consider the  recommendations as it assumes responsibility for USASpending.gov.  Treasury’s comments are reprinted in appendix V.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time we will send copies to the appropriate  congressional committees; the Director of the Office of Management and  Budget; the Secretary of the Department of the Treasury; the  Administrator of General Services; and the Chief Executive Officer of the  Millennium Challenge Corporation. In addition, the report will be available  at no charge on the GAO website at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-4456 or chac@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made contributions to this  report are listed in appendix VI.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to determine the extent to which (1) federal agencies  report required award data and (2) inconsistencies exist between the data  on USASpending.gov and records at federal agencies. To address these  objectives, we examined data collection and reporting requirements under  FFATA; relevant OMB guidance, other relevant requirements variously  published in the Federal Acquisition Regulation, Code of Federal  Regulations, and the Federal Register, and agency systems  documentation.
To determine the extent to which federal agencies are reporting required  award data, we reviewed contract and assistance award reporting  requirements as defined in FFATA, OMB guidance, and other federal  guidance. We compiled a list of potential award-making  agencies/programs using the Public Budget Database for contracts and   We  the Catalog of Federal Domestic Assistance for assistance awards.then assessed the list of agencies against reporting requirements under  FFATA and relevant guidance to determine which agencies are exempt  from reporting to USASpending.gov.
To determine the extent to which agencies reported contractual  information to USASpending.gov, we selected the agencies listed in  the Public Budget Database with budget authorities greater than $400  million for fiscal year 2012. We selected these agencies to ensure the  inclusion of large agencies likely to have awarded a significant  number of contracts. We searched USASpending.gov to determine  which of these agencies reported contractual information for fiscal  year 2012. For any selected agency reporting no contractual  information for fiscal year 2012, we reviewed documentation and  interviewed agency officials to determine why contracts were not  reported.
To determine the extent to which agencies reported assistance award  information to USASpending.gov, we identified all programs listed in  the Catalog of Federal Domestic Assistance as of February 2013. We  searched USASpending.gov to determine which programs reported  information on at least one assistance award for fiscal year 2012. In  addition, we selected all loan programs reporting transactions to  USASpending.gov for fiscal year 2012 but reporting $0 in subsidy  costs. For any program reporting no assistance award information for  fiscal year 2012 or reporting a subsidy cost of $0, we interviewed  agency officials and reviewed documentation to determine why  information was not reported. For programs that claimed they do not  make financial assistance awards and are therefore exempt from  reporting to USASpending.gov, we assessed the purpose of each  program against the definition for federal financial assistance for  validity. For all programs categorized as either making an award and  not reporting, or reporting awards late to USASpending.gov, we  requested that the agency provide an estimate for obligations made  under this program for fiscal year 2012.
To determine the extent to which inconsistencies existed between the  data on USASpending.gov and records at federal agencies, we selected  a simple representative random sample of 385 fiscal year 2012 records.  The probability sample was designed to estimate a rate of reporting errors  with a sampling error of no greater than plus or minus 5 percentage  points at the 95 percent level of confidence. Because we followed a  probability procedure based on random selections, our sample is only one  of a large number of samples that we might have drawn. Since each  sample could have provided different estimates, we express our  confidence in the precision of our particular sample’s results as a 95  percent confidence interval (e.g., plus or minus 5 percentage points). This  is the interval that would contain the actual population value for 95  percent of the samples we could have drawn. For 21 data elements  required by FFATA or OMB guidance, we compared the information  reported on USASpending.gov to information contained in the originating  agency’s underlying records, where available, to evaluate to what extent  the data was consistent.
To test the controls over the reliability of agency data, we obtained  supporting documentation to confirm that the agency provided only official  agency records, such as a system of records notice. When such a  supporting document was unavailable, we reviewed agency transparency  policy documentation, data verification and validation plans or  procedures, or system source code information to ensure the reliability of  the data. We did not assess the accuracy of the data contained in records  provided by agencies. To the extent that we had previously assessed the  reliability of a system, we worked within GAO to obtain the necessary  supporting documentation.
We conducted this performance audit from December 2012 to June 2014  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: List of Agencies Reviewed, Based on the Catalog of Federal Domestic Assistance
paragraphs: Table 7 shows the agencies included in our review of assistance  programs listed in the Catalog of Federal Domestic Assistance, broken  out by the number of programs.
section_title: Appendix III: List of Agencies Included in Our Sample
paragraphs: Table 8 shows the agencies included in our representative sample,  broken out by the number of contracts and assistance awards. The table  further breaks down assistance awards to show the total number of  awards aggregated at the county level.
section_title: Appendix IV: GAO Estimates of Consistency Rates
paragraphs: Table 9 lists the estimates for each of the required data elements we  tested for fiscal year 2012.
section_title: Appendix V: Comments from the Department of the Treasury
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, James R. Sweetman Jr.,  (assistant director), Mathew Bader, Carl Barden, Colleen Candrl, Nancy  Glover, Wilfred Holloway, James Houtz, Ruben Montes de Oca, Kate  Nielsen, David Plocher, Matthew Snyder, and Umesh Thakkar made key  contributions to this report.