Data Act: Progress Made but Significant Challenges Must Be Addressed to Ensure Full and Effective Implementation
Published: 2016-04-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The DATA Act requires OMB and Treasury to establish government-wide data standards and requires federal agencies to begin reporting financial and payment data in accordance with these standards by May 2017. The act also requires OMB to establish a pilot program to develop recommendations for simplifying federal award reporting for grants and contracts. GAO has an ongoing body of work examining implementation of different aspects of the DATA Act.
This statement focuses on the following questions: (1) What efforts have been made to develop government-wide standards and associated technical guidance? (2) What implementation challenges and mitigation strategies have been reported by agencies? (3) How effective is OMB's design of the Section 5 Pilot to reduce recipient reporting burden? The statement also provides an update on OMB's and Treasury's efforts to address GAO's DATA Act recommendations.
This statement is primarily based on two GAO reports issued in 2016, as well as ongoing work examining agency DATA Act implementation plans. For its work examining agency implementation plans, GAO reviewed 42 plans to identify reported challenges and mitigation strategies that could affect agency progress toward meeting requirements under the act. GAO also interviewed OMB and Treasury staff to update the status of prior open recommendations pertaining to the act. Treasury had technical comments, which GAO incorporated as appropriate; OMB had none.
section_title: What GAO Found
paragraphs: The Office of Management and Budget (OMB) and the Department of the Treasury (Treasury) have taken some significant steps toward implementing the key provisions of the Digital Accountability and Transparency Act of 2014 (DATA Act); however, several challenges need to be addressed in order to successfully meet the act's requirements.
Data standards and technical schema. GAO reported in January 2016, that OMB and Treasury had issued standardized data element definitions for reporting federal spending, but the lack of key guidance has slowed the ability of agencies to operationalize the data standards. Specifically, OMB and Treasury had not yet released guidance to agencies regarding how some data elements should be reported in order to produce consistent and comparable data. For example, Award Description, defined as a brief description of the purpose of the award, led to different interpretations by agencies.
GAO also found that Treasury's technical guidance continues to evolve and lacks finality which may impede agency implementation. Treasury has issued several iterative versions of the technical schema that describes the standard format for reporting data elements. Each iteration results in revisions to the technical guidance which may adversely affect the timely implementation of the act. A finalized technical schema would provide agencies with a stable base from which to develop data submission plans and processes. According to Treasury officials, final draft guidance has been provided to agencies for comment.
Agency reported implementation challenges and mitigation strategies. GAO's ongoing review of required implementation plans submitted to OMB indicates that federal agencies have identified significant challenges in implementing the DATA Act including competing priorities, resources, systems integration, and guidance. Some agencies also identified strategies to mitigate identified challenges, including effective communication and information sharing and leveraging of existing resources, and reported that additional support from OMB and Treasury is needed for successful implementation.
Pilot to reduce recipient reporting burden. OMB has designed a pilot that consists of two parts focused on the grants and procurement communities. The Department of Health and Human Services (HHS) has been designated as the executing agency for the grant portion while OMB leads the procurement portion with support by the General Services Administration's 18F and others. If implemented according to HHS's proposed design, the grants portion of the pilot will likely meet requirements established under the act and will partially reflect leading practices for effective pilot design. However, the procurement portion does not clearly document how it will contribute to meeting the act's requirements nor does it reflect leading practices for effective pilot design.
Although progress has been made, GAO has been unable to close any DATA Act recommendations including those calling for establishing a data governance structure, developing a federal program inventory, and expanding two-way dialogue with stakeholders. GAO will continue to monitor OMB's and Treasury's progress to address its recommendations as implementation proceeds.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the implementation status of the  Digital Accountability and Transparency Act of 2014 (DATA Act) and to  update you on our recent work regarding the progress that has been  made to date as well as some key challenges moving forward. This is a  critical period for the implementation of the DATA Act, as its reporting  requirements take effect government-wide in 2017. Congressional  oversight during this time will play a vital role in helping to determine  whether the act will fulfill its promise for shedding light on how federal  funds are spent.
The Office of Management and Budget (OMB) and the Department of the  Treasury (Treasury) have taken some significant steps since the May  2014 passage of the DATA Act. They issued standardized data element  definitions, released an eight-step implementation plan to help agencies  meet their reporting requirements, and designed a pilot for developing  recommendations to reduce recipient reporting burden (Section 5 Pilot).  Despite these accomplishments, continuing challenges will need to be  addressed in order to successfully meet the act’s requirements.
We have completed several reviews of DATA Act implementation. In July  2015, we testified before your subcommittees on the progress made and  challenges that needed to be addressed in the first year following  passage of the act. In September 2015, we issued a report on preserving  the capabilities of the Recovery Operations Center. In January of this  year, we issued a report on the establishment of data standards under the  act. Today, we are releasing a report on the design of the Section 5  Pilot. We also have engagements underway to examine the DATA Act  implementation plans submitted by federal agencies and to explore  possible approaches for developing an inventory of federal programs as  required by the GPRA Modernization Act of 2010 (GPRAMA). This  inventory would assist in the implementation of the DATA Act consistent  with its stated purposes. In addition, we will continue monitoring OMB’s  and Treasury’s development of technical and operational guidance to  agencies on the standardized data element definitions developed last  year as well as the implementation of the Section 5 Pilot design. This  oversight approach will allow us to meet the DATA Act requirements for  us to issue reports in 2017, 2019, and 2021 assessing and comparing the  quality of data submitted under the act as well as agency implementation  and use of data standards.
We have coordinated closely with federal inspectors general to leverage  information and avoid duplication of effort as they conduct reviews and  develop audit guidance and practices. As part of this effort, we will  continue to work with our inspector general colleagues to ensure that  sufficient attention is being devoted to agencies’ capacities to meet their  responsibilities under the act.
My remarks today will address the following topics related to  implementation of the DATA Act. Specifically, I will be discussing (1) what  efforts have been made to date to develop government-wide standards  and associated technical guidance, (2) the challenges and mitigation  strategies associated with implementation reported by agencies, and (3)  the effectiveness of OMB’s design of the Section 5 Pilot to reduce  recipient reporting burden. In addition, I will provide an update on prior  GAO recommendations relating to the DATA Act and their implementation  status (see appendix I).
With the exception of our review of agency implementation plans, my  testimony today is based on work that we have either previously issued or  are issuing today. We used multiple methodologies to develop the  findings, conclusions, and recommendations for those reports. Details on  the objectives, scope, and methodology for each of these issued reports  are available in the reports. For our ongoing review of agency  implementation plans, we requested 51 implementation plans submitted  pursuant to requirements of OMB Memorandum M-15-12, and we  obtained 42 of the 51 implementation plans requested. Most of these  plans were submitted to OMB in September 2015. Some agency  implementation plans were dated as late as January 2016. We analyzed  the 42 federal agency implementation plans to identify any reported  challenges and mitigating strategies in their DATA Act implementation  plans. We did not evaluate the quality of the information provided in the  agencies’ plans. To obtain an update on open recommendations relating  to the DATA Act, we met with OMB and Treasury officials to discuss  progress made on addressing our open recommendations. We provided a  draft of this statement to Treasury and OMB. Treasury officials provided  technical comments on the draft statement, which we incorporated as  appropriate. OMB had no comments on the draft statement.
The work upon which this statement is based was conducted 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: Progress Made In Establishing Data Standards but More Complete and Timely Guidance Is Needed to Ensure Effective Implementation
subsections: section_title: OMB and Treasury Issued Standardized Data Element Definitions for Reporting Federal Spending Data, but More Needs to Be Done to Ensure Consistent and Comparable Reporting
paragraphs: In our January 2016 report on data standards we noted that by the end of  August 2015 OMB and Treasury had issued a list of 57 standardized data  elements. The DATA Act requires that these data standards—to the  extent reasonable and practicable—incorporate widely accepted common  data elements, such as those developed by international standards- setting bodies. Incorporating leading practices from international  standards organizations offers one way to help reduce uncertainty and  confusion when reporting and interpreting data standards. Well-crafted  data element definitions are needed to ensure that a data standard  produces consistent and comparable information. In our January 2016  report, we noted that these standardized data element definitions largely  followed leading practices. We compared the standardized data elements  against leading practices promulgated by the International Organization  for Standardization (ISO) and found that 12 of the 57 DATA Act data  element definitions issued in August 2015 met all of the ISO leading  practices and each of the remaining 45 definitions met no fewer than 9  leading practices, meaning that even the lowest-rated data elements in  our review adhered to almost 70 percent of the ISO leading practices.
While this demonstrates good progress, it will be important to clarify data  elements that did not adhere to leading practices to reduce the risk that  agencies inconsistently apply the definitions. Imprecise or ambiguous  data element definitions may allow for more than one interpretation by  agency staff collecting, compiling, and reporting on these data and thus  could result in inconsistent and potentially misleading reporting when  aggregated across government or compared between agencies.
For example, OMB and Treasury issued four data elements that  collectively represent the concept of Primary Place of Performance. The  location or place of performance of specific grant, contract, or other  federal spending has long been a data element collected by agencies.  However, agencies have taken varied approaches to reporting place of  performance information—sometimes describing where the funded  activity takes place, sometimes the recipient of the product or activity, or  sometimes the location of the administrative headquarters of the provider  or a sub-entity. We reported that although the definitions standardize  some of the mechanics of what Primary Place of Performance covers,  such as city, county, state, and ZIP+4 codes, the definition still leaves  room for differing interpretations that could result in agencies capturing  and reporting this information differently.
In another example highlighted in our January report, we noted that OMB  and Treasury standardized the definition of Program Activity as required  by the DATA Act. This definition adhered to all 13 ISO leading practices,  but we still had concerns regarding the use of this data element.
Specifically, OMB’s and Treasury’s guidance on Program Activity  acknowledged that program activities can change from one year to the  next and that Program Activity does not necessarily match “programs” as  specified in GPRAMA or the Catalog of Federal Domestic Assistance. In  responding to this guidance, officials at the U.S. Department of  Agriculture said that when program activities change it is difficult to  compare spending over time, underscoring the need for more guidance to  ensure that the public can accurately interpret Program Activity compared  to the other common representations of federal programs.
We also raised concerns about OMB’s efforts to merge DATA Act  requirements with certain GPRAMA requirements. GPRAMA requires the  Office of Management and Budget (OMB) to make information available  about each federal program. A stated purpose of the DATA Act is to link  federal contract, loan, and grant spending information to federal programs  to allow taxpayers and policy makers to track federal spending. However,  we have reported that initial efforts to develop the program inventory  resulted in inconsistent definitions and significant information gaps. As a  result, the inventory does not provide useful information for decision  making. As we have previously testified before this committee, OMB  needs to accelerate efforts to determine how best to merge DATA Act  purposes and requirements with the GPRAMA requirement to produce a  federal inventory of programs that meets congressional expectations that  federal agencies provide useful and valid information for decision making  on all federal government programs. To help address this issue, we  have initiated new work to develop a framework that can inform OMB’s  and agencies’ future efforts to develop a viable and useful federal  program inventory.
To help ensure that agencies report consistent and comparable data, we  recommended that OMB and Treasury provide agencies with additional  guidance that addresses potential clarity, consistency, and quality issues  with identified data element definitions. While OMB generally concurred  with our recommendation, it took the position that the requirement to  standardize data elements applied only to the 11 account level data  elements standardized in May 2015, and efforts to standardize the  remaining 46 data elements were conducted pursuant to a larger policy  goal to improve the quality of federal spending data reported on  USAspending.gov. However, for reasons put forth in our January 2016  report, we concluded that both the statutory language and the purposes  of the DATA Act support the interpretation that OMB and Treasury are  required to establish data standards for award and awardee information in  addition to the account level information. Without data standards for  award and awardee information, the inconsistent and incomparable  reporting that Congress sought to remedy through the DATA Act will  continue.
In December 2015, OMB and Treasury posted a data dictionary on the  Federal Spending Transparency website that provides additional  information about how each data element is defined, the type of data to  be reported (i.e., integer, alphanumeric, numeric), and how data elements  relate to each other. This data dictionary also includes new data  elements, which OMB said encompass additional detail required for or  consistent with DATA Act reporting, such as finer breakdowns of reported  values for Obligations and Outlays. Although this new guidance improves  the clarity of the data definitions by providing additional context and detail,  we are still concerned about both the lack of clarity with certain data  definitions and the addition of new data elements that agencies are  required to report.
In addition, OMB and Treasury still have not addressed data quality  issues with some data elements. Our prior work identified data quality  issues with certain data elements, such as Award Description, which  OMB and Treasury defined as “a brief description of the purpose of the  award.” In our previous work on the data quality of USAspending.gov, we  identified challenges with this data element, citing the wide range of  information that agencies report as the description or purpose. Agencies  routinely provided information for this data element using shorthand  descriptions, acronyms, or terminology that could only be understood by  officials at the agency that made the award. As we reported in 2010 and  2014, this lack of clarity can be traced, in part, to guidance which is  unclear or leaves room for multiple interpretations. The lack of basic  clarity for certain data elements could make it difficult for people outside  the agency to understand the data and would limit the ability to  meaningfully aggregate or compare these data across the federal  government. We made recommendations to OMB in 2010 and 2014 and  to Treasury in 2014 to improve the accuracy and completeness of Award  Description, which have yet to be addressed. At that time, Treasury  officials neither agreed nor disagreed with our recommendations, while  OMB staff generally agreed with the recommendations stating that they  were consistent with actions required under the DATA Act.
section_title: Lack of Finalized Technical Guidance Could Impede Agency Implementation of DATA Act Requirements
paragraphs: OMB and Treasury issued initial guidance to federal agencies in May  2015 on meeting the reporting requirements of the Federal Funding  Accountability and Transparency Act of 2006 (FFATA), as amended by  the DATA Act, in accordance with the new data standards. OMB and  Treasury also issued a DATA Act Implementation Playbook and  subsequent guidance which, among other things, specified eight key  steps for agencies to fulfill their DATA Act requirements.
In our January 2016 report we raised concerns about the completeness  and timeliness of the technical guidance OMB and Treasury developed to  facilitate agency data submission. Treasury has issued several iterative  versions of the technical schema that describes the standard format for  reporting data elements including their description, type, and length, but  has not made available a finalized schema that would provide agencies  with a stable base from which to develop data submission plans. OMB’s  and Treasury’s DATA Act Implementation Playbook outlines eight specific  steps and timelines for implementing the DATA Act at the agency level.  However, the finalized guidance that would help agencies carry out these  steps has not been provided in time to coincide with when agencies were  expected to carry out key activities outlined in the DATA Act  Implementation Playbook. Given the importance of having a largely stable  schema to serve as the foundation for developing subsequent technical  processes at the agency level, any significant delay in releasing finalized  guidance will likely delay implementation of the act. Accordingly, we  recommended that OMB and Treasury take steps to align the release of  finalized technical guidance, including the DATA Act schema and broker,  to the implementation time frames specified in the DATA Act  Implementation Playbook. Treasury officials generally concurred with our  recommendation, noting that they recognize the importance of providing  agencies with timely technical guidance and reporting submission  specifications.
Treasury issued its updated schema, now referred to as the DATA Act  Information Model Schema version 0.7 on December 31, 2015, to include  schema diagrams depicting how the data elements fit together in context.  This new version builds upon previous work and incorporates additional  A-11 data elements to the schema. In addition, it increases the level of  detail required that we believe may have consequences for timely  implementation by federal agencies. Finally, while many of these  additional data elements are derivatives of data elements required under  FFATA, A-11 or new data elements required under the DATA Act, it could  substantially increase the amount of data agencies need to submit.
Although schema version 0.7 provides additional context for reporting  using the new data standards, we continue to have concerns about the  evolving nature of the technical specifications provided to agencies. For  example, the previous version of the schema provided information on the  allowed values that could be entered for each data element, such as DC  for the District of Columbia. Version 0.7 of the schema removed  information on allowed values, which could lead to inconsistent and  incomparable reporting. However, Treasury officials told us that they have  developed other methods to enforce these values. In responding to a  draft of this statement, Treasury officials told us they provided final draft  technical guidance to agencies for comment. In addition, they provided a  copy of this guidance to us which we will review in future work.
section_title: Agencies Reported Significant Challenges and Identified Mitigating Strategies for Implementing the DATA Act; Addressing Them Will be Key to Successful Implementation
paragraphs: OMB and Treasury have issued data standards and provided guidance  and feedback to federal agencies on their DATA Act implementation  plans. However, our ongoing work in this area indicates that challenges  remain and will need to be addressed to successfully implement the  DATA Act government-wide. In May 2015, OMB issued Memorandum M- 15-12, which among other things, directed agencies to develop  implementation plans. OMB issued additional guidance to the agencies  detailing what should be included in their implementation plans, and  asking agencies to describe any potential difficulties or foreseeable  challenges, such as competing statutory, regulatory, or policy priorities,  which could hinder their implementation of the DATA Act. This guidance  also encouraged agencies to provide suggestions to mitigate the  challenges they foresee, help to manage costs, and support investment  planning. Our ongoing review of the DATA Act implementation plans from  the 24 Chief Financial Officers Act agencies as well as 18 smaller federal  agencies, dated between August 2015 and January 2016, provides  insight into the challenges agencies face as well as the mitigation  strategies they suggest to address them. Based on our preliminary  results, we believe the challenges and mitigation strategies reported  provide important insight as to the level of effort, communication,  collaboration, and resources needed to successfully implement the DATA  Act government-wide.
subsections: section_title: Challenges Reported by Agencies in their DATA Act Implementation Plans
paragraphs: Based on our preliminary results from our ongoing review of agency  implementation plans, we identified seven overarching categories of  challenges reported by agencies to effectively and efficiently implement  the DATA Act. (See table 1.)
The preliminary results of our review of the 42 agency implementation  plans we received indicate that 31 agencies reported specific challenges  some of which may overlap with multiple categories. Figure 1 shows that  agencies reported challenges, most frequently in the following categories:  competing priorities, resources, and systems integration.
Competing priorities: Of the 31 agencies reporting challenges, 23  reported competing statutory, regulatory, or policy priorities which could  potentially affect DATA Act implementation. One competing priority  certain agencies reported is meeting requirements of OMB Circular No.  A-11, which provides agencies with guidance on the budget process,  including how to prepare and submit required materials for budget  preparation and execution. For example, one agency noted that the  class” and “program activity” reporting create competing priorities both for  the agency’s software vendors and for the agency’s internal resources.  The agency noted that staff with knowledge needed to understand and  comment on new DATA Act data element definitions are the same staff  different timelines for OMB Circular No. A‐11 requirements on “object  required to work on the new Circular No. A‐11 reporting requirements  (e.g., technical revisions and clarifications). The agency added that its  ability to engage effectively on the DATA Act requirements while working  to implement the Circular No. A‐11 changes is severely inhibited.
Another competing priority some agencies reported is the data  requirement set forth in the Federal Acquisition Regulation (FAR).  Specifically, in October 2014 the FAR was amended to standardize the  format of the Procurement Instrument Identifier (PIID) that must be in  effect for new awards issued after October 2017. The PIID must be  used to identify all solicitation and contract actions, and ensure that each  PIID used is unique government-wide for at least 20 years from the date  of the contract award. Some agencies reported they were concerned  about the amount of effort involved in also implementing the PIID for the  DATA Act. For example, one agency noted that it had implemented a  standard PIID and developed processes and systems to handle the new  identifiers to meet the FAR requirements, but the extent of any changes  necessary to implement the PIID for the DATA Act, which also requires a  unique identifier, is unknown. Another agency noted that this initiative and  other agency initiatives will compete for many of the same resources,  including subject matter experts.
Resources: Limited resources are another concern reported by 23  agencies in their implementation plans. Agencies frequently identified  funding and human resources as needs for efficient and effective  implementation. For example, one agency noted that the execution of its  implementation plan is highly dependent on receiving the requisite  funding and human resources as estimated in the plan, and the agency  added that delays in securing additional resources for fiscal years 2016,  2017, and beyond will have a direct effect on its DATA Act  implementation and schedule. Similarly, another agency pointed out that  having insufficient funds for contractor support, managing the overall  implementation, testing interfaces between systems, and addressing data  mapping issues will pose a challenge for its entities and systems.
Some agencies also reported that human resources are key to successful  DATA Act implementation. One agency reported it is concerned about the  adequacy of its human resources, which could impair its ability to go  beyond basic compliance with the DATA Act and added that this may  prevent the agency from being able to address increased public inquiry  and scrutiny of their data and operations. Specifically, the agency  reported that resources are required for project management, data  analysis, analytic expertise, data management, and training for financial  inquiry and analysis. The need for subject matter experts, such as data  architects, was raised as a challenge by another agency. Furthermore,  one agency noted that the need to share limited resources for DATA Act  implementation with other operational activities presents a significant  challenge for their implementation strategy.
Systems integration: Systems integration is another pervasive challenge  reported by 23 agencies in their implementation plans. Some agencies  noted concerns about the ability of their systems to obtain and easily  submit to Treasury all the data elements needed to implement the DATA  Act, including the requirement to establish a unique award ID. For  example, one agency reported that it does not have a systematic link to  pull data from multiple systems by a unique award ID and it does not  have an automated grants management system because the agency  noted that it reports grants data manually using spreadsheets. This  agency noted that it needs to replace its financial system and modify  supporting systems to fully comply with the DATA Act. Another agency  noted that five of the required data elements are not included in its  procurement and financial assistance system. As a result, the agency  noted that it will have to modify its system’s software to include these  elements in order to comply with the DATA Act. These statements from  agency implementation plans indicate that, given the vast number and  complexity of systems government-wide that are potentially involved in  DATA Act implementation efforts, agencies may face a variety of  challenges related to systems integration.
Guidance: In their implementation plans, 19 agencies reported the lack of  adequate guidance as a challenge to implementing the DATA Act.  Several agencies noted that they cannot fully determine how their  policies, business processes, and systems should be modified to support  DATA Act reporting because in their view, OMB and Treasury have not  yet issued complete, detailed, finalized DATA Act implementation  guidance on required data elements, technical schema, and other key  policies. According to these agencies, issuance of such guidance is part  of the critical path to meeting their implementation goals. For example,  one agency noted that its implementation plan is highly dependent upon  Treasury’s development of the technical schema for DATA Act  implementation. The agency also reported that any delays or changes to  Treasury requirements in the technical schema will significantly affect the  agency’s solution design, development and testing schedule, and cost  estimate. Another agency included a list of unanswered questions in its  implementation plan that it wanted OMB to address in guidance related to  time frames, various technical requirements, level of reporting, linking  systems, and tracking and reconciling data.
Dependencies: Eighteen agencies reported in their implementation plans  that the completion of certain implementation activities is subject to  actions or issues that must be addressed by OMB and Treasury in order  for the agencies to effectively implement the DATA Act. Some agencies  also noted that they were relying on their shared service provider’s  implementation of the DATA Act for agency compliance with the act.   For example, one agency noted that it will rely on its shared service  provider to enhance its system, but funding may be restricted to enhance  a system that the agency does not own. Another key dependency noted  in one agency’s implementation plan is the need for Treasury to provide  detailed information or requirements regarding the data formats,  validation module, error correction and resubmission process, and testing  schedule. Without this information, the agency noted that it cannot  provide complete cost estimates, determine changes to system and  business processes, and determine the level of effort and resources  required to develop the data submissions.
Time frames: In their implementation plans, 16 agencies identified time  constraints as a challenge in implementing the DATA Act. For example,  one agency noted that the time frame to get everything done indicated in  the original guidance coupled with the complexity of the known issues  makes it highly unlikely that its DATA Act initiative will stay on target. The  agency also noted that there is no mitigation strategy for meeting the  expected deadline on all aspects of the reporting because even if all tasks  were worked concurrently, the schedule is not attainable for the agency.  Another agency noted that the current reporting of award and awardee  information to USASpending.gov is in accordance with FFATA. This  information is reported within 3 days after the award was made for  contracts and bi-monthly for financial assistance, while the DATA Act  requires reporting of account-level information monthly where practicable  but not less than quarterly. This agency noted that linking financial  information with nonfinancial information that is reported with a different  frequency creates a “moving target” and poses a challenge to linking the  financial and nonfinancial data.
Other challenges: Agencies reported several other challenges in their  implementation plans less frequently than the ones listed above. For  example, a few agencies reported challenges related to the overall  policies, procedures, and processes such as governance, risk  management, and training. Some agencies also noted challenges related  to the level of detail required for information and data required by the  DATA Act that differ from existing financial reporting processes, including  the ability to reconcile information and data to sources and official  records. Finally, agencies reported concern with the quality and integrity  of data in underlying agency systems and its effect on DATA Act  reporting.
section_title: Mitigation Strategies Reported by Agencies in their DATA Act Implementation Plans
paragraphs: Our preliminary results indicate that 26 agencies identified mitigation  strategies to address challenges as suggested by OMB guidance. Some  strategies discussed in the agency implementation plans address multiple  challenges. Below are some of the more frequently cited and cross  cutting mitigation strategies suggested by agencies in their  implementation plans to address specific areas of concern.
Communication and information sharing: In their implementation  plans, some agencies reported the need for frequent communication with  OMB, Treasury, shared service providers, vendors, and other agencies in  order to keep one another updated on their implementation activities, as  well as to share best practices and lessons learned throughout the  process. Agencies also suggested that reviewing other agencies’  implementation plans for best practices, common challenges, and  solutions would facilitate information sharing. For example, one agency  pointed out that, in its view, lines of communication between Treasury  and the agencies must be transparent to help ensure the submission of  financial data is accurate and the process for submitting it runs smoothly.  Another agency noted that it believes collaboration with other agencies to  share common concerns will be beneficial.
Monitoring and development of guidance: In their implementation  plans, agencies also discussed plans to closely monitor DATA Act  implementation guidance in order to adapt agency implementation  strategies as the guidance changes. For example, one agency noted that  it will monitor and evaluate the release of DATA Act guidance as well as  data elements and technical schema in order to identify the effect on the  project. Another agency noted that it plans to use its established  governance structure to immediately facilitate solutions when additional  guidance is provided. Further, some agencies discussed developing  guidance and training materials for internal use. For example, one agency  noted that it plans to create a common set of tools by establishing a  “project management toolkit” for agency leaders to ensure DATA Act  implementation needs are addressed efficiently and effectively.
Leveraging existing resources: To effectively use limited resources,  some agencies noted in their implementation plans the importance of  leveraging available systems and human resources by reassigning staff,  using subject matter experts, and multitasking when possible to maximize  efficiency. For example, one agency reported that it will leverage senior  executive support to make the DATA Act implementation a priority and  see what resources might be available in the “least expected places,” as  well as work on tasks concurrently. In addition, agencies reported the  need to update systems to encompass more data elements and  streamline reporting. For example, one agency reported that it plans to  designate a Chief Data Officer to oversee a multi-tiered review of agency  data and implement solutions for consolidating agency data.
Overall our preliminary work indicates that agency implementation plans  contain valuable information on a variety of challenges in implementing  the DATA Act, including a lack of funding, inadequate guidance, tight time  frames, competing priorities, and system integration issues. Agencies  reported working closely with internal and external stakeholders to  address these challenges as effectively as possible, but also reported that  additional support from OMB and Treasury is needed for successful  implementation of the DATA Act.
section_title: Section 5 Pilot Presents Design Issues that Need to be Addressed to Meet Goal of Reducing Recipient Reporting Burden
paragraphs: In the report that is being issued today, we identified several design  challenges involving the development of the Section 5 Pilot, which the  DATA Act required OMB to establish. OMB created a two-part pilot that  focused on two communities: federal grants and federal contracts  (procurement). For grants, OMB designated the Department of Health  and Human Services (HHS) to serve as its executing agent. On the  contracting side, OMB’s Office of Federal Procurement Policy (OFPP) is  responsible for leading the procurement portion working with the General  Services Administration’s 18F and others. OMB launched a number of  pilot-related initiatives in May 2015 and expects to continue activities until  at least May 2017.
subsections: section_title: Design of Grants Portion of the Section 5 Pilot Is On Track to Meet DATA Act Requirements and Partially Adheres to Leading Pilot Design Practices
paragraphs: As the executing agent for the grants portion of the pilot, HHS has  developed six “test models” that evaluate a variety of approaches to  potentially reduce grantee reporting burden, including the development of  a data repository for identifying common data elements and forms  intended to eliminate duplicative reporting on Consolidated Federal  Financial Reports. Detailed descriptions of the objectives and  methodologies of each of these six test models can be found in our full  report.
The DATA Act identifies three specific requirements related to the Section  5 Pilot’s design. Specifically, the pilot must: (1) include data collected  during a 12-month reporting cycle; (2) include a diverse group of  recipients; and (3) include a combination of federal contracts, grants, and  subawards with an aggregate value between $1 billion and $2 billion.  We found that if HHS effectively implements its stated plans for the grants  portion of the Section 5 Pilot, it is likely that it will address these three  requirements. HHS officials told us that they are still determining how to  meet the requirement for total award value because they want to ensure  the pool of pilot participants is as diverse and large as possible while still  being legally compliant.
In addition, we found that the design of the grants portion of the pilot  partially adhered to leading practices of pilot design. We assessed the  designs of the grants and procurement portions of the pilot against  leading practices that we identified from our prior work and other sources  regarding design of a pilot project (see textbox).
Leading Practices for Effective Pilot Design
Establish well-defined, appropriate, clear, and measurable objectives.
Clearly articulate an assessment methodology and data gathering strategy that  addresses all components of the pilot program and includes key features of a  sound plan.  Identify criteria or standards for identifying lessons about the pilot to inform  decisions about scalability and whether, how, and when to integrate pilot  activities into overall efforts.
Develop a detailed data-analysis plan to track the pilot program’s  implementation and performance and evaluate the final results of the project  and draw conclusions on whether, how, and when to integrate pilot activities into  overall efforts.
Ensure appropriate two-way stakeholder communication and input at all stages  of the pilot project, including design, implementation, data gathering, and  assessment.
Our analysis found that five of the six grants test models had clear and  measurable objectives. In contrast, five of the six test models did not  clearly articulate an assessment methodology. Only one test model had  specific details about how potential findings could be scalable to be  generalized beyond the context of the pilot. Furthermore, five of six grants  test models provided some level of detail on how HHS plans to evaluate  pilot results. Finally, HHS has engaged in two-way stakeholder  communications for all six test models and has taken a number of actions  to obtain input from grant recipients.
We provided our assessment of the design of the grants portion of the  pilot to HHS officials, who told us that they generally concurred with our  analysis and had updated their plan to address many of our concerns.  However, at the time we were conducting our audit work, HHS officials  said they could not provide us with the revised plan because it was under  review by OMB. We have since received an updated version of the HHS  plan for implementing the grants portion of the pilot. We plan to fully  assess its contents and the extent to which it addresses our concerns in a  forthcoming review that will focus on the pilot’s implementation.
section_title: Design of Procurement Portion of the Pilot Needs Attention
paragraphs: The procurement portion of the pilot will focus on examining the feasibility  of centralizing the reporting of certified payroll. OFPP staff responsible  for this portion of the pilot told us they decided to focus on certified payroll  reporting because of feedback they received from the procurement  community. Toward this end, the Chief Acquisitions Officers Council has  entered into an interagency agreement with 18F to design a prototype  system that would centralize certified payroll data, which it expects to test  in summer 2016. This narrow focus on certified payroll stands in contrast  to the grants portion of the pilot, where HHS will explore several areas in  which grantee reporting burden could be reduced.
Based on our review, it is unclear how the design of the procurement  portion will address the requirements set forth by section 5 of the act. As  a result of design and development delays, OFPP does not expect to be  able to collect meaningful and useful data for the procurement portion of  the pilot until summer 2016. This is after May 9, 2016, the date by which  data collection must begin to allow for a 12-month reporting cycle before  the required termination date. Further, we found that OFPP does not  have a detailed plan for selecting participants that will result in a diverse  group of recipients with awards from multiple programs and agencies.  While there is some documentation related to OFPP’s approach for  selecting participants, they do not clearly convey how the procurement  portion of the pilot would specifically contribute to meeting the act’s  requirement regarding diversity of participants. However, there is some  documentation related to OFPP’s approach for selecting participants in  their draft procurement pilot plan and in a Federal Register notice issued  on November 24, 2015. For example, the draft plan identifies the  Federal Procurement Data System-Next Generation as the mechanism  that will be used for identifying which contracts and contractors to include  in the pilot. OFPP staff also told us that they intend to cover both large  and small industries. While valuable information, it does not clearly  convey how the procurement portion of the pilot would specifically  contribute to meeting the act’s requirement regarding diversity of  participants. In our report being issued today, we recommend that OMB  determine and clearly document how the procurement pilot will contribute  to these requirements. OMB did not offer a view on this recommendation.
In addition, we found that the design of the procurement portion of the  pilot did not reflect leading practices for effective pilot design which would  help OMB develop effective recommendations to simplify reporting for  contractors. OFPP staff told us that certified payroll reporting was  selected as the subject of the pilot because they learned that it was a  particular pain point for contractors as a result of various outreach efforts  including a discovery process conducted by 18F to interview contractors,  contracting officers, business owners, government employees, and  subject-matter experts. However, the draft procurement plan does not  provide specifics regarding the particular objectives and hypothesis that  will be tested by the pilot. OFPP staff stated that, consistent with their  view of agile practices, they intend to further refine their approach as 18F  develops its prototype and additional work proceeds with the pilot. In  addition, the draft plan did not address the issue of scalability necessary  to produce recommendations that could be applied government-wide, nor  did it indicate how data will be evaluated to draw conclusions. To enable  the development of effective recommendations for reducing reporting  burden for contractors, our report contains a recommendation that OMB  ensure that the procurement portion of the pilot reflects leading practices  for pilot design. OMB did not did not offer a view on this recommendation.
In conclusion, almost 2 years into the DATA Act’s implementation, we are  faced with a mixed picture. Given its government-wide scope and  complexity, effective implementation of the act requires OMB, Treasury,  and federal agencies to address a range of complex policy and technical  issues. Although progress has been made in several areas, we have  identified challenges related to the standardization of data element  definitions and the development of a technical schema that, if not  addressed, could lead to inconsistent reporting. In their implementation  plans, federal agencies have recognized these and other areas of  concern including a lack of funding, inadequate guidance, tight time  frames, competing priorities, and system integration issues. Finally,  although OMB appears to be on track with the design of the grants  portion of the Section 5 Pilot, we are concerned that the design of the  procurement portion of the pilot could hinder further effective  implementation.
Chairmen Meadows and Hurd, Ranking Members Connolly and Kelly,  and Members of the Subcommittees, this concludes my prepared  statement. I would be pleased to respond to any questions you may have.
section_title: GAO Contacts and Staff Acknowledgments
paragraphs: Questions about this testimony can be directed to Michelle A. Sager,  (202) 512-6806 or sagerm@gao.gov. Questions about agencies’ DATA  Act implementation plans can be directed to Paula Rascona, (202) 512- 9816 or rasconap@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement.
In addition to the contacts named above, Gary Engel (Managing Director);  J. Christopher Mihm (Managing Director); Peter Del Toro (Assistant  Director); Michael LaForge (Assistant Director); Kathleen Drennan;  Shirley Hwang; Carroll Warfield, Jr.; Aaron Colsher; Charles Jones;  Thomas Hackney; and Laura Pacheco made major contributions to this  statement. Other key contributors include Mark Canter; Jenny Chanley;  Robert Gebhart; Donna Miller; Diane Morris; Carl Ramirez; Andrew J.  Stephens; and James Sweetman, Jr. Other members of GAO’s DATA Act  Working Group also contributed to the development of this statement.
section_title: Appendix I: Status of GAO’s Open Recommendations Related to the DATA Act
paragraphs: Recommendations  The Director of OMB, in collaboration with the  members of the Government Accountability  and Transparency Board, should develop a  plan to implement comprehensive  transparency reform, including a long-term  timeline and requirements for data standards,  such as establishing a uniform award  identification system across the federal  government.  1.  To improve the completeness and  accuracy of data submissions to the  USASpending.gov website, the Director  of OMB, in collaboration with Treasury’s  Fiscal Service, should clarify guidance on  (1) agency responsibilities for reporting  awards funded by non-annual  appropriations; (2) the applicability of  USAspending.gov reporting requirements  to non-classified awards associated with  intelligence operations; (3) the  requirement that award titles describe the  award’s purpose (consistent with our prior  recommendation); and (4) agency  maintenance of authoritative records  adequate to verify the accuracy of  required data reported for use by  USAspending.gov.
subsections: section_title: Recommendations
paragraphs: Implementation status   recommendation and expect information on  authoritative data sources to be included in final DATA  Act technical guidance to be made available in late  spring 2016.
2.  To improve the completeness and  accuracy of data submissions to the  USASpending.gov website, the Director  of OMB, in collaboration with Treasury’s  Fiscal Service, should 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.  1.  To ensure that federal program spending  data are provided to the public in a  transparent, useful, and timely manner,  the Director of OMB should accelerate  efforts to determine how best to merge  DATA Act purposes and requirements  with the GPRAMA requirement to  produce a federal program inventory.  2.  To ensure that the integrity of data  standards is maintained over time, the  Director of OMB, in collaboration with the  Secretary of the Treasury, should  establish a set of clear policies and  processes for developing and maintaining  data standards that are consistent with  leading practices for data governance.
Open. As part of their DATA Act implementation  efforts, OMB and Treasury staff told us that they have  identified authoritative sources for data and are  developing validation rules for spending information to  be reported under the DATA Act. In addition, the  inspector general community is working on standard  audit methodologies to verify the accuracy and  completeness of agency reporting. OMB and Treasury  staff reiterated that the ultimate responsibility for the  quality of data lies with the agencies. However,  Treasury’s broker service will provide an additional set  of validation rules to further improve the quality of data  submitted to USAspending.gov.   Open. OMB staff told us that identifying “programs” for  the purposes of DATA Act reporting would not be  completed until after May 2017. However, they said  they have convened a working group to develop and  vet a set of options to establish a government-wide  definition for program that is meaningful across  multiple communities and contexts (such as budget,  contracting, and grants).   Open. A Treasury official told us that they are in the  process of drafting recommendations for a data  governance process that they expect to present to the  DATA Act Executive Steering Committee with the goal  of completing a process in June 2016 or as soon as  practical.
section_title: Report
paragraphs: concerns are addressed as  implementation efforts continue, the  Director of OMB, in collaboration with the  Secretary of the Treasury, should build on  existing efforts and put in place policies  and procedures to foster ongoing and  effective two-way dialogue with  stakeholders including timely and  substantive responses to feedback  received on the Federal Spending  Transparency GitHub website.
Implementation status   continuing engagement with federal and nonfederal  stakeholders through presentations at conferences,  roundtable discussions, monthly stakeholder calls, and  other venues. They also noted that they have updated  the website they use to solicit public comments to  improve user access. We have requested  documentation of the steps OMB and Treasury have  taken to foster ongoing and effective two-way dialogue  with stakeholders including timely and substantive  responses to feedback.
1.  To capitalize on the opportunity created  by the DATA Act, the Secretary of the  Treasury should reconsider whether  certain assets—especially information  and documentation such as memoranda  of understanding (MOUs) that would help  transfer the knowledge gained through  the operation of the Recovery Operations  Center—could be worth transferring to  the Do Not Pay Center Business Center  to assist in its mission to reduce improper  payments. Additionally, the Secretary  should document the decision on whether  Treasury transfers additional information  and documentation and what factors were  considered in this decision.
Open. Treasury officials said that all appropriate  assets, such as information and documentation from  the Recovery Operations Center, have been  transferred to the Do Not Pay Center Business Center.  We requested a list of these assets as well as  information on the process Treasury used to determine  which assets to transfer. In commenting on a draft of  this statement, Treasury provided some  documentation regarding the transfer of assets. We  will review this information.
1.  To help ensure that agencies report  consistent and comparable data on  federal spending, we recommend that the  Director of OMB, in collaboration with the  Secretary of the Treasury, provide  agencies with additional guidance to  address potential clarity, consistency, or  quality issues with the definitions for  specific data elements including Award  Description and Primary Place of  Performance and that they clearly  document and communicate these  actions to agencies providing this data as  well as to end-users.
Open. OMB staff told us that they have a draft version  of the clarifying guidance out for agency comment and  plan to issue this policy guidance in spring 2016. In  addition, OMB is planning to provide additional clarity  to specific data element definitions by updating current  reporting documents to be consistent with the new  technical requirements.
2.  To ensure that federal agencies are able  to meet their reporting requirements and  timelines, we recommend that the  Director of OMB, in collaboration with the  Secretary of the Treasury, take steps to  align the release of finalized technical  guidance, including the DATA Act  schema and broker, to the  implementation time frames specified in  the DATA Act Implementation Playbook.
Open. Treasury officials told us that a stable draft  version 1.0 of the reporting submission specification,  which is part of the DATA Act Information Model  Schema, has been shared with agencies for comment.  It will be finalized as soon as possible. Treasury  officials said they will finalize the broker once a stable  version of 1.0 of the schema is complete.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.