DATA Act: As Reporting Deadline Nears, Challenges Remain That Will Affect Data Quality
Released: 2017-04-28T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: Across the federal government, agencies are making final preparations to submit the required data by the DATA Act's May 2017 deadline. This represents the culmination of almost 3 years of effort by OMB, Treasury, and federal agencies to address many policy and technical challenges. Moving forward, attention will increasingly focus on another critical goal of the act: improving the quality of the data produced.

Consistent with GAO's mandate under the act, this is the latest in a series of reports reviewing the act's implementation. This report examines (1) risks to data quality related to known material weaknesses and other deficiencies previously identified by GAO, IGs, and external auditors; (2) risks to data quality related to challenges in operationalizing policy and technical guidance; (3) agencies' assurances of the quality of their data submissions; and (4) efforts taken to establish a data governance structure. GAO reviewed DATA Act implementation documents and auditors' reports on known challenges and interviewed staff at OMB, Treasury, and other agencies.

section_title: What GAO Found
paragraphs: Internal control weaknesses and other challenges pose risks to data quality. Material weaknesses and significant deficiencies reported in agencies' financial audits and other challenges reported in Inspectors General (IG) readiness review reports show several widespread and longstanding issues that present risks to agencies' abilities to submit quality data as required by the Digital Accountability and Transparency Act of 2014 (DATA Act). These issues fall into three categories: (1) accounting and financial management, (2) financial management systems, and (3) information technology security and controls. GAO has also reported weaknesses and challenges in government-wide financial management systems used for DATA Act reporting.

Challenges with guidance will impact data quality. Challenges related to how agencies report certain intragovernmental transactions, reconcile recipient address information, and align required DATA Act files with missing data continue to present risks to the quality of data displayed on USASpending.gov. The Office of Management and Budget (OMB) and the Department of the Treasury (Treasury) have stated that they do not expect to resolve these challenges before the May 2017 reporting deadline. Unresolved challenges affecting data quality could lead policymakers and the public to draw inaccurate conclusions from the data. This challenge underscores the need for OMB to address GAO's open recommendation that it provide agencies with additional guidance to address data quality issues. GAO will continue to assess how OMB, Treasury, and agencies address data quality issues moving forward.

Limitations exist with data quality assurance processes. OMB guidance directs senior accountable officials at each agency to rely on existing assurance processes when they certify that their agencies' DATA Act submissions are valid and reliable. However, GAO identified concerns regarding some existing assurance processes. For example, OMB directed agencies to use a General Services Administration assurance statement attesting to the quality of data in two source systems, but the assurance statement focuses on data security rather than data quality, and it is unclear whether it applies to both procurement and financial assistance data. OMB is aware of these issues and expects to finalize the assurance process in time for the May 2017 reporting deadline. Accordingly, GAO is not making a recommendation at this time but will assess the quality of the assurance process in future work.

Efforts to establish a data governance structure are still at an early stage. OMB has taken some actions to improve its data governance framework, but efforts to establish a fully functioning data governance structure are at an early stage with many specifics yet to be worked out. OMB formally chartered the Data Standards Committee as an advisory body in November 2016 to focus on clarifying existing data element definitions and identifying needs for new standards. The charter states that the committee will promote transparency by making the topics and outcomes of its proceedings public, but OMB has not kept records of the committee's meetings nor has the committee produced a work plan for moving forward. Public information about the committee's activities and outcomes would facilitate consultation with stakeholders, as required by the act.

section_title: What GAO Recommends
paragraphs: GAO recommends that the Director of OMB ensures that the Data Standards Committee publicly releases information about the topics of its proceedings and any resulting outcomes. OMB generally agreed with GAO's recommendation.

section_title: Letter
paragraphs: In the 3 years since the Digital Accountability and Transparency Act of  2014 (DATA Act) became law, the Office of Management and Budget  (OMB), the Department of the Treasury (Treasury), and federal agencies  have taken significant steps in preparing to make more complete and  accurate federal spending data available to the public in May 2017. The  DATA Act requires OMB and Treasury to increase the types and  transparency of spending data available to agencies, Congress, and the  public by establishing standards to enable the reporting and tracking of  government-wide spending at multiple points in the spending lifecycle.  The DATA Act also requires agencies to report the data in accordance  with those standards on USASpending.gov and requires federal  inspectors general (IG) to assess how their respective agencies  implement and use data standards, as well as the completeness,  timeliness, and accuracy of the data their agencies submit.

Consistent with our mandate under the act, this is the latest in a series of  GAO reports reviewing DATA Act implementation. Our prior reviews have  identified several challenges related to OMB’s and Treasury’s efforts to  standardize data element definitions and develop a technical schema to  facilitate agency reporting. If unaddressed, these challenges could  increase the risk of inconsistent and incomparable reporting. Our previous  work has also identified concerns including inadequate guidance, tight  time frames, competing priorities, a lack of funding, and system  integration issues reported by agencies that could impede effective and  timely implementation as well as the need for OMB to establish a data  governance structure to help ensure the integrity of the standards over  time.

This review focuses on what is already known about existing challenges  that affect the quality of agency financial data as well as issues that will  affect data quality as agencies begin to report under the act. More  specifically, this report addresses the following: (1) risks to data quality  related to known material weaknesses and other deficiencies, including  internal controls over financial reporting, that have been identified in  selected previous audits, reviews, and reports conducted by GAO, IGs  and external auditors; (2) risks to data quality related to challenges in  operationalizing DATA Act policy and technical guidance; (3) approaches  that agencies will use to provide assurances of the quality of their data  submissions and any associated limitations; and (4) efforts taken to  establish a data governance structure. We also update the status of  OMB’s and Treasury’s efforts to address our previous recommendations  related to DATA Act implementation, 9 of which remain open.

To assess potential risks to data quality related to known material  weaknesses and other significant deficiencies, including internal  controls over financial reporting, that have been identified in selected  previous audits, reviews, and reports by us, IGs, and external auditors,  we examined: (1) the extent to which agencies’ independent auditors  have reported material weaknesses, significant deficiencies, and other  challenges, and (2) the extent to which we previously reported issues with  government-wide financial management systems used to report spending  data to USASpending.gov. We reviewed the Chief Financial Officers Act  of 1990 (CFO Act) agencies’ fiscal year 2016 Performance and  Accountability Reports (PAR) and Agency Financial Reports (AFR) to  identify material weaknesses, significant deficiencies, and other  challenges that could affect the quality of the data submitted by agencies.

Pub. L. No. 104-208, div. A., title VIII, §§ 801-808, 110  Stat. 3009, 3009-389 to 3009-393 (Sept. 30, 1996) codified at 31 U.S.C. § 3512 note. quality data. In addition, we reviewed  our previous reports to identify reported deficiencies in government-wide  systems that could affect the quality of spending data submitted to  USASpending.gov. Although the conditions observed in these reports  may not be present in all federal agencies and systems, they illustrate  conditions that increase the risk and effects to agency data quality.

To assess the potential risks to data quality related to challenges in  operationalizing DATA Act policy and technical guidance while  implementing the act, we examined (1) the extent to which the two  selected agencies have been able to submit, validate, and certify their  data submissions to the DATA Act broker and any challenges they  reported; and (2) the steps OMB and Treasury have taken to address  known reporting challenges. We reviewed technical documentation  related to the schema version 1.01 and the broker to understand the  reporting structure, broker functionality, and validation processes. We  selected two agencies—the Department of Health and Human Services  (HHS) and the U.S. Department of Agriculture (USDA)—to examine their  experiences reporting data. We selected these agencies based on  whether they were in compliance with existing federal requirements for  federal financial management systems; the type of federal funding  provided (such as grants, loans, or procurements); and their status as  federal shared service providers for financial management. Although the  agencies’ experiences are not generalizable, they illustrate different  conditions and challenges under which agencies are implementing the  act.

Pub. L. No. 104-208, div. A., title VIII, §§ 801-808, 110 Stat. 3009, 3009-389 to 3009-393  (Sept. 30, 1996) codified at 31 U.S.C. § 3512 note. reporting requirements, and any plans for additional guidance. We also  met with OMB staff and Treasury officials to obtain information on the  status of efforts to address our previous recommendations related to  providing policy and technical guidance.

To assess the approach that agencies will use to assure the quality of  their data submissions and any associated limitations we (1) reviewed  relevant OMB policy guidance; (2) spoke with HHS and USDA officials,  and requested and reviewed documentation—where applicable—to  understand any concerns they have or challenges they are facing or  expect to face during the assurance process; and (3) interviewed OMB  staff and Treasury officials to better understand the assurance process,  and asked about plans for additional guidance. To describe OMB’s and  Treasury’s efforts to establish a data governance structure, we reviewed  documentation provided by OMB and met with OMB staff and Treasury  officials.

We also met with representatives of organizations with expertise in data  governance to obtain additional information about how key practices  described in our December 2016 report have been implemented in data  governance frameworks. Additional details regarding our objectives,  scope, and methodology are provided in appendix I.

We conducted this performance audit from January 2017 to April 2017 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: Signed into law on May 9, 2014, the DATA Act expanded on previous  federal transparency legislation by requiring the disclosure of federal  agency expenditures and linking agency spending information to federal  program activities so that both policymakers and the public can more  effectively track federal spending. The DATA Act requires government- wide reporting on a greater variety of federal funds, such as budget and  financial information, as well as tracking of these funds at multiple points  in the federal spending lifecycle. To improve the quality of these data, the  act requires that agency-reported award and financial information comply  with new data standards established by OMB and Treasury. These  standards specify the items to be reported under the DATA Act and  define and describe what is to be included in each element with the aim of  ensuring that information will be consistent and comparable. The act  identifies OMB and Treasury as the two agencies responsible for leading  government-wide implementation.

Two key components of ensuring the accuracy, completeness, and  consistency of federal spending data are OMB releasing policy guidance  and Treasury developing technical guidance for the agency submissions  and publication of the data required under the act. Toward that end, OMB  has taken a number of steps to help agencies meet their reporting  requirements, including establishing 57 standardized data element  definitions for reporting federal spending information, issuing guidance to  operationalize selected standards and clarify agency reporting  requirements, and meeting with agencies to assess their readiness to  meet the reporting requirements under the act. Specific actions include  the following:  In May 2015, OMB issued initial guidance to federal agencies on  reporting requirements pursuant to the Federal Funding Accountability  and Transparency Act (FFATA) as well as the new requirements that  agencies must employ pursuant to the DATA Act. The guidance also  directs agencies to (1) implement data definition standards for  collecting and reporting agency-level and award-level data by May 9,  2017; (2) implement a standard data exchange format for providing  data to Treasury to be displayed on USASpending.gov or a successor  site; and (3) link agency financial systems with award systems by  continuing to use specified unique identification numbers for financial  assistance awards and contracts.

In May 2016, OMB released guidance on reporting financial and  award information required under the act. This guidance addresses  (1) reporting financial and award level data, (2) linking agency award  and financial systems using a unique award identifier, and (3)  assuring that data submitted to Treasury for publication on  USASpending.gov are sufficiently valid and reliable.

In November 2016, OMB issued additional guidance in response to  questions and concerns reported by agencies. This guidance  specifies DATA Act reporting responsibilities for intragovernmental  transactions, explains how to report financial assistance awards with  personally identifiable information, and clarifies the senior accountable  official (SAO) assurance process over the data submitted to the DATA  Act broker, a system to standardize data formatting and assist  reporting agencies in validating their data prior to submission.

The May and November 2016 guidance also directs agency SAOs to  leverage existing data quality and management controls established  in statute, regulations, or federal policy when submitting their  assurance over the data.

In addition to issuing policy guidance to help agencies meet their  reporting requirements under the act, OMB’s Controller and Treasury’s  Fiscal Assistant Secretary conducted a series of meetings with CFO Act  agencies to obtain information on any challenges that could impede  effective implementation and assess agencies’ readiness to report  required spending data in May 2017.

Treasury also led efforts to develop the technical guidance and reporting  systems to facilitate agency reporting. In April 2016, Treasury released  the DATA Act Information Model Schema (DAIMS), or schema version  1.0, which provides information on how to standardize the way financial  assistance awards, contracts and other financial and non-financial data  will be collected and reported under the DATA Act. A key component of  the reporting framework laid out in the schema is the DATA Act broker.  According to Treasury guidance documents, agencies are expected to  submit three files sourced from their financial management systems to the  broker. The broker is also expected to extract award and sub-award  information from existing award reporting systems that currently supply  award data (covering federal assistance including grants and loans, as  well as procurements) to USASpending.gov.

These award reporting systems—including the Federal Procurement Data  System-Next Generation (FPDS-NG), System for Award Management  (SAM), the Award Submission Portal (ASP), and the FFATA Subaward  Reporting System (FSRS)—compile information submitted by agencies and award recipients to report, among other things, procurement and  financial assistance award information required under FFATA. A more  detailed discussion of the broker and the agency file submission process  can be found in our August 2016 correspondence. In addition to  developing the schema version 1.0 and the broker, Treasury also issued  an implementation playbook that outlines 8 steps and a recommended  timeline for agency implementation, and hosted multiple meetings,  including weekly office hour calls and monthly technical workshops, to  help agencies prepare and test their data for submission to the broker.

To help improve the quality of the data, the act also requires agencies’  IGs and GAO to assess and report on the completeness, timeliness,  quality, and accuracy of spending data submitted by federal agencies.  The first IG reports were due to Congress in November 2016. However,  agencies are not required to submit spending data in compliance with the  act until May 2017. As a result, the IGs did not report on the spending  data in November 2016. The Council of the Inspectors General on  Integrity and Efficiency (CIGIE) developed an approach to address what it  describes as the IG reporting date anomaly and maintain early IG  engagement with the agencies.

CIGIE encouraged but did not require the IGs to undertake assessments  of their respective agencies’ readiness to submit spending data in  accordance with DATA Act requirements and delayed issuance of the  mandated audit reports to November 2017. The Federal Audit Executive  Council DATA Act Working Group—established by CIGIE to assist the IG  community in understanding and meeting its DATA Act oversight  requirements—issued the DATA Act Readiness Review Guide (version  2.0) on June 2, 2016, to guide IGs in conducting their readiness reviews.

According to the review guide, the main objectives of the IG readiness  reviews are to assess whether an agency’s DATA Act implementation  plan or process is “on track to meet the requirements of the DATA Act,”  and to provide, as needed, recommendations or suggestions on how to  improve the agency’s likelihood of compliance with the requirements of  the DATA Act.

section_title: Internal Control Material Weaknesses, Significant Deficiencies, and Other Challenges Pose Risks to Federal Spending Data Quality
subsections: section_title: Financial Audits and Readiness Reviews Indicate That Agencies Face Data Quality Issues in Three Broad Areas
paragraphs: As of February 2017, 22 of the 24 CFO Act agencies had issued annual  financial reports for fiscal year 2016 and 19 of the 22 CFO Act agencies’  auditors reported material weaknesses and/or significant deficiencies in  internal control over financial reporting in their audit reports that may  affect the quality of information reported under the DATA Act. In addition,  as of February 2017, 20 of the 24 CFO Act agencies’ IGs had issued  readiness review reports. Of these, 16 IGs identified a range of issues  and challenges which may affect agencies’ abilities to produce quality  data for submission to Treasury as part of the DATA Act reporting  requirements.

Further, 9 of the 22 CFO Act agencies’ auditors reported agencies’  financial management systems did not substantially comply with Section  803(a) of FFMIA, which may limit an agency’s ability to provide reliable  and timely financial information for managing day-to-day operations and  to produce reliable financial statements, maintain effective internal  control, and comply with legal and regulatory requirements, including the  DATA Act.

Our analysis of material weaknesses, significant deficiencies, and other  challenges reported in agency annual financial reports and agency IGs’  DATA Act readiness reviews identified data quality issues and challenges  in three broad areas that increase the risk agencies may not be able to  report complete, timely, and accurate data as required under the DATA  Act by May 2017.
subsections: section_title: Accounting and Financial Management
paragraphs: These issues and challenges relate to internal controls over financial  reporting and financial management operations, properly recorded and  reconciled accounting balances and transactions, and other issues  related to the proper use of accounting practices in accordance with U.S.  generally accepted accounting principles. Fourteen of the 22 CFO Act  agencies’ auditor’s reports noted material weaknesses and significant  deficiencies, and 14 of the 20 IG readiness reviews reported issues or  challenges related to accounting and financial management. See  appendix III for a list of agencies that had deficiencies in this area.

According to some of the auditor’s reports, issues in this area could result  in misstatements in budgetary balances, obligations, and undelivered  orders—which are part of the information to be posted on  USASpending.gov. Some examples include the following:

One agency’s auditor reported a material weakness in controls over  financial management related to the maintenance of accounting  records, recording obligations at the transaction level, and accounting  and internal controls over obligations and undelivered orders. The  auditor also reported a significant deficiency related to ineffective  monitoring and reviewing, and inappropriate certification as to the  validity of obligation balances, which resulted in invalid obligations  remaining open. According to the auditor, these deficiencies restrict  the availability of funding authority, and increase the risk of misstating  obligation balances as of year-end. These types of issues increase  the risk that quarterly obligation amounts reported by agencies under  DATA Act requirements may be inaccurate or incomplete.

Another agency’s IG readiness review reported that the various layers  of data validation and reconciliation involved in the agency’s DATA  Act implementation are complex and require coordination with each  reporting bureau. According to the agency’s IG, the complexities of  performing reconciliations of reported data to source systems  presents a challenge to the agency’s ability to ensure the quality and  validity of data reported.

section_title: Financial Management Systems
paragraphs: This set of issues included longstanding challenges with disparate or  antiquated financial management systems that affect financial reporting.  These challenges include system infrastructure and integration issues  such as systems that do not consolidate transaction level financial data or  do not capture required data elements such as award identifiers used to  link financial and non-financial data. Five of the 22 CFO Act agencies’  auditors’ reports noted material weaknesses and significant deficiencies,  and 14 of the 20 IG readiness reviews reported issues or challenges  related to financial management systems. See appendix III for a list of  agencies that had deficiencies in this area.

According to the auditors’ reports, issues in this area may cause  ineffective application of controls used to identify and resolve differences  in financial information with source systems to help ensure complete,  accurate, and timely financial information for DATA Act reporting. Also,  according to the IG readiness reviews, issues with agency financial  management systems resulted in test file submissions being rejected by  the DATA Act broker due to validation errors. Only data that have passed  the broker validation and been approved by the SAO is included in  USASpending.gov. Data that have not passed the broker validation will  not be included, therefore increasing the risk of incomplete or misleading  information. Some examples include the following:

One agency’s annual financial audit report stated that the agency had  not enabled the full functionality of its accounting systems to capture  all budgetary accounting events and to automate budgetary reporting  procedures. As a result, the agency made numerous manual  adjustments related to budgetary resources amounts that were not  supported and not properly recorded to the correct general ledger  accounts. According to the auditor, manual adjustments increase the  risk (1) that budgetary adjustments were unsupported or  inconsistently recorded, and (2) of the likelihood of errors in the  financial statements. These deficiencies increase the risk that  budgetary information that will be submitted to USASpending.gov may  be incomplete and inaccurate.

Another agency’s IG readiness review reported that the agency faced  challenges due to legacy and current financial systems using different  technologies and data elements. Limited resources, such as lack of  financial resources and human capital necessary to implement the  act’s requirements, was also cited as a challenge. The IG also  reported that the agency had been unable to resolve data quality  issues that have impeded the complete and accurate reporting of  departmental contract, grant, loan, and other financial assistance  awards in USASpending.gov.

Finally, according to the auditor’s reports, 9 of the 22 CFO Act agencies’  auditors reported agencies’ financial management systems did not  substantially comply with 1 or more of the 3 requirements found in section  803(a) of FFMIA. Section 803(a) of FFMIA requires: (1) federal financial  management systems requirements; (2) applicable federal accounting  standards; and (3) the U.S. Standard General Ledger (USSGL) at the  transaction level.

Eight of 22 agencies did not comply with federal financial management  system requirements, which consist of reliable financial reporting;  effective, efficient, and cost effective financial operations; safeguarding  resources; and internal controls over financial reporting and financial  system security. Four of 22 agencies did not comply with federal  accounting standards, which provide guidance to improve federal  financial reporting and are essential for public accountability and the  effective and efficient functioning of government. Five of 22 agencies did  not comply with the USSGL at the transaction level which means that  each time an approved transaction is recorded in the financial  management system it will generate the appropriate general ledger  accounts for posting the transaction in accordance with the rules defined  in USSGL guidance. By not implementing effective internal controls over  financial management systems and not adequately implementing  requirements in section 803(a) of FFMIA, agencies will be challenged to  provide consistent financial and non-financial information across  component entities and functions, which increases the risk that agencies  may not be able to submit quality data for DATA Act reporting.

section_title: Information Technology Security and Controls
paragraphs: The third area consists of issues involving security over information  technology (IT) systems; improper access controls to limit users to  systems and functions needed for their work; and system configurations  such as outdated system software, patch management, and lack of  compliance with internal policies. Issues involving IT security and  ineffective controls could limit management’s ability to provide assurance  over the completeness and accuracy of recorded transactions. Eighteen  of the 22 CFO Act agencies’ auditors’ reports noted material weaknesses  and significant deficiencies related to IT security and controls. See  appendix III for a list of agencies that had deficiencies in this area. The IG  readiness reviews, which primarily focused on other steps taken by  agencies to implement the DATA Act, did not specifically mention  challenges or issues related to IT security and controls.

According to the auditors’ reports, issues in this area increase the risk  that unauthorized and/or inappropriate changes made either accidentally  or intentionally to financial IT systems may go undetected by  management, increasing the risk of misstatement due to fraud and  disruption of critical financial operations, as well as increasing the risk that  the reliability and integrity of agencies’ data could be compromised and  adversely affect the agencies’ ability to provide complete, accurate, and  timely information for DATA Act reporting. One example iss the following:

One agency’s annual financial audit report stated that controls over  access to programs and data and audit logs were not designed  properly, consistently implemented, or fully effective. The auditor  found that database and operating system patches were not  documented, authorized or tested prior to implementation into the  production environment, a complete and accurate listing of operating  system patches could not be generated, and a feeder system was  configured incorrectly to assign incorrect invoice acceptance date  data, among other things. According to the auditor, these deficiencies  increase the risk that unscrupulous, unauthorized, or inappropriate  activity could be performed and not detected, which could lead to a  compromise and/or security risk to the confidentiality, integrity, and  availability of the data and systems. These issues also increase the  risk that financial and non-financial information that will be submitted  to USASpending.gov may be incomplete, inaccurate, and untimely.

section_title: Our Previous Work Has Identified Data Limitations in the Award Systems That Provide Data to USASpending.gov
paragraphs: We have previously reported weaknesses, issues, and other challenges  in key DATA Act award systems which increase the risk that the data that  will be submitted to USASpending.gov may not be complete, accurate,  and timely. The DATA Act broker is expected to extract award and sub- award information related to federal spending, such as federal  assistance—including grants, loans, and procurements—directly from  four award systems. The four award systems and related issues that we  have previously identified are described below. Unlike the data submitted  by agencies directly from their financial systems to the DATA Act broker,  the award and sub-award information extracted from these four systems  are not subject to any validations in the broker.
subsections: section_title: Federal Procurement Data System-Next Generation (FPDS-NG)
paragraphs: Since 1978, FPDS-NG has been the primary government-wide central  repository for procurement data, and feeds certain data to  USASpending.gov—a searchable database of information on federal  contracts and other government assistance such as grants and  cooperative agreements. Individuals and entities awarded contracts over  the micro-purchase threshold must submit detailed contract information to  FPDS-NG. FPDS-NG includes information about the product or service,  agency and vendor information, contract start and expiration dates, and  location of contract performance, among other elements. According to  Treasury officials, the DATA Act broker will extract procurement award  and awardee information such as award description, amount, and  awardee unique identifier from FPDS-NG to be reported on  USASpending.gov.

In our past work, we found that FPDS-NG often contains inaccurate or  incomplete data as agencies do not always input or document required  information. For example, in September 2016, our review of the  Department of Veterans Affairs (VA) contracting policies and procedures  found that total obligations balances reflected in VA’s subsidiary  accounting records did not match what was recorded in FPDS-NG. We  also identified inaccurate data in FPDS-NG such as misclassified 8(a)  firms and incorrect obligations balances in our March 2016 review of the  Small Business Administration’s (SBA) 8(a) Business Development  Program.

Further, our prior work on FPDS-NG also found data limitations with the  system’s inability to identify more than one type of service purchased for  each contract action. According to some of the IG reports we reviewed,  these data quality issues were the result of human error, the lack of  departmental internal controls to reasonably assure required procurement information is properly recorded in departmental systems and FPDS-NG,  and limitations with the FPDS-NG functionality such as the inability to  change incorrect data identified in FPDS-NG. These issues increase the  risk that data reported from FPDS-NG to the Treasury data store will not  be complete, accurate, and timely.

section_title: System for Award Management (SAM)
paragraphs: SAM is the primary U.S. government repository for prospective federal  awardee and federal awardee information, and the centralized  Government system for certain contracts and grants. All entities that wish  to do business with the government are to maintain an active registration  in SAM unless exempt. As part of this registration, awardees register a  name, unique identifier, address, and executive compensation  information—all of which are required DATA Act standardized data  elements. SAM also populates the entity name and address (street, city,  state, congressional district, ZIP Code, and country) in FPDS-NG and  certain executive compensation and other sub-awardee information is  prepopulated from SAM to FSRS prior to the prime awardee’s reporting.

We have previously identified data limitations with SAM that may affect  DATA Act reporting. For example, in January 2017, we found that SAM  did not contain information on lessors that listed physical or mailing  addresses in China. Our work also found that certain information  disclosed in SAM is not validated. If the addresses for foreign awardees  are not recorded in SAM, then they will not be displayed in  USASpending.gov for access by the public, resulting in incomplete and  inaccurate awardee data for DATA Act reporting. We further noted that  prior to November 1, 2014, the General Services Administration (GSA)  was not required to collect certain information from lessors through SAM,  such as the parent, subsidiary, or successor entities to the lessor.

In addition, our June 2014 review of USASpending.gov found that ZIP  Code information for awardees—which is provided by SAM—was one of  the data elements that were significantly inconsistent with information in  agency records. In that report, we recommended clarified guidance on  agency maintenance of authoritative records adequate to verify the  accuracy of required data reported for use by USASpending.gov to improve the completeness and accuracy of data submissions. Although  some progress has been made by the related agencies, the  recommendations related to this report remain unresolved. These data  limitations increase the risk that federal agencies may not submit quality  awardee data for DATA Act reporting.

section_title: Award Submission Portal (ASP)
paragraphs: ASP is the system used by federal agencies to report financial assistance  data (e.g., grants) to USASpending.gov. According to Treasury, the DATA  Act broker will extract financial assistance award information from the  ASP—including awardee unique identifier, award characteristics, awards  amount, awardee legal identify name, and address for financial  assistance—all of which are required by the DATA Act to be reported.

In December 2016, we reported that the DATA Act broker will not validate  the accuracy of data extracted from the ASP and that according to  Treasury officials ASP does apply some validation checks to the data  submitted by federal agencies. In addition, ASP rejects individual  records that fail 10 percent of the validation requirements. ASP also  rejects entire file submissions if more than 10 percent of the records in  the file submission fail validation checks. However, ASP partially accepts  the file submission if less than 10 percent of the records in a file  submission fail validation checks. The effectiveness of this validation  process to prevent the submission of erroneous records raises concerns  regarding the quality of awardee data that can be submitted for DATA Act  reporting.

section_title: FFATA Subaward Reporting System (FSRS)
paragraphs: FSRS allows prime grant award and prime contract recipients to report  sub-award activity including executive compensation, and provides data  on first-tier sub-awards reported by prime recipients. FSRS was created  as a result of FFATA and became active in July 2010. Prime awardees  must register and report sub-award information for first-tier sub-awardees,  including award and entity information, such as Data Universal  Numbering System (DUNS) identification numbers. FSRS contains the  small business status of some subcontractors, but only for limited types of  small businesses. The sub-awardee provides all of the information  required for reporting to the prime awardee. This includes sub-awardee  entity information, sub-awardee unique identifier, and relevant executive  compensation data, if applicable. These are also DATA Act standardized  data elements required to be reported.

In June 2014, we reported that we could not verify the subcontract data in  FSRS as agencies frequently do not maintain the records necessary to  verify the information reported by the awardees. We also found  inconsistencies in the reporting of 20 of 21 data elements caused by  errors in data entry, missing data, or lack of clear guidance. In our report,  we recommended clarified guidance on agency maintenance of  authoritative records adequate to verify the accuracy of required data  reported for use by USASpending.gov. Our recommendation on this issue  remains unresolved. These issues increase the risk that federal agencies  may not submit complete, accurate, and timely sub-award data for DATA  Act reporting.

section_title: Reporting Challenges Related to Implementing DATA Act Guidance Will Affect Data Quality
subsections: section_title: OMB Issued Guidance on Reporting Intragovernmental Transactions
paragraphs: As agencies prepare to submit required financial and award information in  May 2017, they have identified a number of reporting challenges that will  affect the quality of data posted on USASpending.gov. Both OMB and  Treasury acknowledged that these challenges are unlikely to be resolved  before the first statutory deadline when data are collected in compliance  with the act. Included in these challenges is how agencies are to report  certain intragovernmental transactions that result from financial activities  between federal government agencies. Specifically, in order to properly  present the financial balances and activities of the federal government,  the reciprocating balances and activities between the agencies should be  offset and result in a zero balance.

Reconciling intragovernmental transactions for financial reporting  purposes is a longstanding and government-wide challenge. Federal  accounting standards, laws, regulations, and policies govern the  accounting, reporting, and business rules for each of the categories and  subcategories of intragovernmental transactions. Our annual audits of the  U.S. government’s consolidated financial statements have identified the  federal government’s inability to adequately account for and reconcile  intragovernmental activity and balances between federal entities as an  impediment that has prevented us from rendering an opinion on the  federal government’s accrual-based consolidated financial statements for  many years. Our most recent audit found that the amount of unmatched  funds from intragovernmental transactions amounted to hundreds of  billions of dollars. In response to our previous recommendations,  Treasury has continued to actively work with federal agencies and  improve its processes to resolve intragovernmental transactions.

However, the guidance OMB developed on how agencies are to report  intragovernmental transactions does not appear to leverage the existing  processes that Treasury has put in place to resolve on a quarterly basis  the differences in intragovernmental transactions between federal  agencies. Treasury has implemented a new initiative for identifying and  monitoring systemic root causes of intragovernmental differences, in  addition to other enhancements to its processes for reporting various  aspects of agencies intragovernmental differences between agencies,  including the composition of the differences by agency and category of  intragovernmental transaction.

USDA officials (one of our case example agencies) expressed concern  about OMB’s guidance on intragovernmental transactions. Specifically,  they told us that without a standard approach for reporting  intragovernmental transactions—meaning whether the funding or  awarding agency reports them—it is not appropriate for a funding agency  to certify award data maintained in an awarding agency’s systems, a  DATA Act reporting method allowed after the first data submission. HHS  officials (our other case example agency) also expressed concern, and  told us that although they will be prepared to report in a manner  consistent with the current OMB guidance, they believe that OMB should  revisit the guidance because it differs from other reporting requirements.

Treasury officials told us that they are aware of these challenges, but they  do not expect that these issues will be resolved before the May 2017  reporting deadline. These officials also told us that efforts to address  longstanding challenges related to reporting intragovernmental  transactions are under way, and that they plan to communicate data  quality limitations to the public on USASpending.gov. The officials could  not provide us with specifics on how they would communicate the  limitations but indicated that it would likely be part of the SAO assurance  process. OMB officials told us in January 2017 that they are unaware of  any outstanding issues on this topic that would require an OMB policy  response, and therefore OMB has no plans to issue additional  implementation guidance at this time.

section_title: Missing or Incorrect ZIP+4 Information Will Lead to Inconsistent Reporting
paragraphs: Another reporting challenge identified by agencies involves missing or  incorrect ZIP+4 information. OMB guidance requires agencies to  validate federal assistance recipient information, including the recipient’s  address and ZIP code, against the information in the System for Award  Management (SAM) before they submit it to the DATA Act broker. This  guidance requires agencies to ensure that award-level data in their  systems for financial assistance recipients matches the recipients’  information in SAM. Consistent with OMB guidance, financial assistance  recipients are required to register in SAM prior to submitting an  application for an award, and OMB staff told us recipients are also  required to provide accurate information as part of the terms and  conditions of their award agreements. However, according to agency  officials, because SAM does not enforce the use of ZIP+4 and agencies’  eligibility procedures may not flag incorrect or missing ZIP+4 information,  some recipient records are incomplete or incorrect. In addition, some rural  communities do not have ZIP+4 because the U.S. Postal Service (USPS)  only assigns 5-digit ZIP codes in those areas.

As a result of the requirement that ZIP+4 information be consistent with  the USPS address database, Treasury officials told us some agencies are  unable to validate their financial assistance award information in the  DATA Act broker. For example, USDA officials told us in January 2017  that instituting the ZIP+4 validation rule in the broker as a fatal error rather  than just a warning would cause a large number of their financial  assistance records to fail and ultimately not be included in data that are  displayed on USASpending.gov. In February 2017, Treasury  implemented the ZIP+4 validation rule as a fatal error. Treasury officials  told us that this was done in an effort to enforce existing requirements  and improve data quality.

Treasury officials said that they examined the scope and seriousness of  the problem and determined that it is not significant enough at this time to  warrant the policy change that would be required to address it prior to  May 2017. According to a Treasury analysis, SAM records that are  missing ZIP+4 information represent about 1 percent of the total dollar  value of all the awards in SAM. In addition, according to Treasury, SAM  records that are missing ZIP+4 because the address has not been  assigned a ZIP+4 by USPS represent less than 0.5 percent of the total  dollar value of all the awards in SAM.

Treasury officials acknowledged that missing or invalid ZIP+4 information  is a longstanding data quality issue with agency records, but believe that  it is one best addressed at the agency level. In March 2017, Treasury  officials told us that although they planned to continue to enforce the  ZIP+4 requirement through the DATA Act broker, they were developing a  workaround for agencies encountering problems.

section_title: Challenges Exist Linking Financial and Award Data
paragraphs: Agencies have also reported challenges linking their financial and award  data using the unique award identifier. OMB guidance requires agencies  to link their agency financial and award data using the unique award  identifier. As our work in 2016 showed, agencies continue to report  challenges related to integrating their financial and award systems to  report under the DATA Act. Some agencies, according to OMB staff, are  unable to record unique award identifiers in their financial systems, and  may not be able to link financial and award data. This linkage should help  policymakers and the public track spending more effectively—one of the  objectives of the DATA Act.

HHS and USDA officials reported in their DATA Act implementation plan  updates and confirmed with us that they are using short-term solutions to  link their financial and award data to generate and submit a required file  by May 2017. They both confirmed they will link their financial and  award systems with the unique award identifier when they implement  long-term system solutions.

OMB staff told us that five agencies—the Departments of Defense,  Housing and Urban Development, the Interior, and Veterans Affairs, and  the Environmental Protection Agency—indicated that they will not fully  meet the May 2017 reporting requirements, in part because some of their  components have been unable to record unique award identifiers in their  financial systems. OMB staff told us that these agencies would be able to  report some data, but not all of the award financial information required  for agency submissions. Treasury officials told us that they are aware of  this issue and have structured the broker so that after providing a warning  it will accept agency data submissions, even if they contain significant  gaps.

OMB staff and Treasury officials told us they are creating a mechanism in  the broker that will allow agencies to explain reporting anomalies in their  data displayed on USASpending.gov. According to Treasury officials, the  broker will include a text box for agencies to explain any reporting  anomalies related to the data they are submitting and certifying before it  is displayed on USASpending.gov. In addition, OMB staff told us they  plan to provide agencies with standard language to explain certain  reporting discrepancies, such as data that are not aligned as a result of  the time it takes between when an agency completes a transaction and  when it is recorded in its financial system. OMB staff explained that the  purpose of the text boxes is not to provide qualifications about data  quality, but to communicate what they believe are legitimate data  discrepancies that could be perceived as data quality issues by the  public.

One of the purposes of the DATA Act is to provide consistent, reliable,  and searchable government-wide spending data that are displayed  accurately for taxpayers and policymakers on USASpending.gov (or a  successor system). Longstanding issues related to agency financial  information, systems and internal controls, and reporting challenges  related to agency DATA Act report submissions underscore the need for  OMB to address our open recommendation to provide additional  guidance to address potential clarity, consistency, or data quality issues  and for OMB to implement a process for communicating data quality  limitations to the public. Information Quality Act (IQA) standards specify  that data should have full, accurate, and transparent documentation  where appropriate and should identify and disclose data quality issues.

Similarly, OMB’s Policies for Federal Agency Public Websites and Digital  Services requires that agencies be transparent about the quality of the  information that they disseminate and take reasonable steps where  practicable to inform users about the quality of disseminated content.

We will continue to monitor the implementation of the DATA Act and how  OMB, Treasury, and agencies communicate reporting anomalies and  data quality limitations.

section_title: OMB Guidance Directs Agencies to Leverage Existing Assurance Processes Despite Known Limitations
paragraphs: Another area of risk to data quality is the agency senior accountable  official (SAO) assurance process that leverages assurance processes of  existing source systems with known data quality challenges. OMB  guidance directs agency SAOs to leverage existing processes when  providing assurances over required data submissions. However, during  this review we have identified a number of concerns related to the  effectiveness of some of these processes.

OMB guidance directs agencies to match the procurement award data  generated in the broker with data in the agency procurement award  systems. The guidance also directs agencies to leverage the  assurances provided in their annual Federal Procurement Data System- Next Generation (FPDS-NG) Data Verification and Validation reports  submitted to OMB. Despite the requirement for agencies to conduct  annual verification and validation reviews of the data contained in FPDS- NG, our prior work found that some award data reported on  USASpending.gov contained information that was not fully consistent with  agency records or was unverifiable due to gaps in agency records.

OMB guidance also directs agencies to match financial assistance award  data generated in the broker against data in their financial assistance  award management systems for all award-level data and in SAM for  prime awardee information (i.e., subrecipient executive compensation  data). Although OMB guidance directs agencies to leverage existing  assurance processes for other file submissions, there is no certification or  assurance processes for the financial data submitted to the ASP. OMB  guidance specifies that OMB is reviewing opportunities to enhance  assurances over these data. However, as of March 2017, OMB has not  established a timetable for this activity, so it is unclear whether new  procedures will be in place in time for agencies to leverage these  assurances for their May 2017 report submissions.

GSA has posted on its website an assurance statement that provides  assurance that the risk to federal agency operations, data, and assets  resulting from the operation of the common controls of SAM and FSRS  information systems are acceptable and meet all the security controls  required for DATA Act reporting. According to OMB staff, agencies can  rely on data from SAM and FSRS for DATA Act reporting. However, our  review of the assurance statement posted on GSA’s website found that  the statement focuses on security controls rather than data quality and  appears to apply specifically to procurement management. The extent to  which this assurance statement will be used by SAOs to provide  assurances over the quality of the data for both procurement and financial  assistance award information is uncertain. We will continue to monitor this  issue moving forward.

HHS officials told us they are still assessing the GSA assurance  statement and its alignment to HHS’s overarching SAO certification.  Since the requirements for SAM and FSRS are driven by both the FAR  and Title 2 of the Code of Federal Regulations, officials said that HHS is  interested in having GSA confirm that the assurance statement covers  both procurement and financial assistance. OMB staff told us that  agencies should leverage this assurance when certifying their data from  these source systems. OMB staff also noted that the agencies are  ultimately responsible for the quality of their data submissions.  Furthermore, these staff stated that the quality of the information reported  directly by awardees to SAM and FSRS is the responsibility of the  awardee in accordance with the terms and conditions of their award  agreements. The extent to which the GSA assurance statement regarding  data integrity in SAM and FSRS will be used by agency SAOs when  assuring the quality of their data submissions for May 2017 is unclear  since some SAOs were still in the process of making that determination in  March 2017. We will revisit this issue after May 2017 once agencies have  made their determinations and will examine potential effects for data  quality.

OMB staff explained that the intent of OMB guidance on the SAO  assurance process is to hold agency SAOs accountable for the reliability  and validity of the data they submit. As discussed in OMB guidance, the  SAO assurance process is also intended to leverage existing controls,  processes, and procedures outlined in existing policies, regulations, and  statutes, such as the internal control requirements outlined in OMB  Circular A-123. However, questions regarding these assurance  processes raise concerns about whether they will be effective in  preventing or detecting data quality issues. They also increase the risk  that SAO assurances over agency data quality will be unreliable. OMB  staff told us that they are aware of these issues and are still finalizing the  SAO assurance process, which they expect to do in time for the May  2017 reporting deadline. Accordingly, we are not making a  recommendation at this time but will assess the quality of the assurance  process in our future work.

section_title: Efforts to Establish Data Governance Structure Are Still at an Early Stage
paragraphs: OMB has taken some actions to improve its data governance framework,  but efforts to establish a fully functioning data governance structure are at  an early stage with many specifics yet to be worked out. In July 2015, we  reported that OMB and Treasury had begun standardizing data elements,  but had not established a clear set of institutionalized policies and  processes for enforcing data standards or adjudicating necessary  changes to existing standards. Establishing a formal framework for  providing data governance throughout the lifecycle of developing and  implementing standards is key for ensuring that the integrity of data  standards is maintained over time. In that report, we recommended that  OMB, in collaboration with Treasury, establish a set of clear policies and  procedures for developing and maintaining data standards that are  consistent with leading practices. OMB and Treasury generally agreed  with our recommendation. However, the recommendation remains open.

In September 2016, OMB established a Data Standards Committee to  focus on clarifying existing data element definitions and identifying the  need for new standards. OMB approved a charter for this committee in  November 2016. According to the charter, the committee will make  recommendations on these topics to OMB, the DATA Act Executive  Steering Committee, and federal communities such as the Chief  Acquisition Officers Council and the Chief Information Officers Council.  The charter states that the committee is an advisory body that is not  responsible for approving or operationalizing the data standards. The  committee’s membership includes representatives of OMB, Treasury,  GSA’s Integrated Award Environment Program Management Office, and  federal communities and councils representing various areas of  responsibility and expertise. OMB staff told us that the Data Standards  Committee will be solely focused on maintaining and updating data  standards, including standards used by federal communities but not  specifically required under the DATA Act.

According to OMB staff, the Data Standards Committee has held several  meetings and plans to produce operating procedures to guide its work but  has not yet done so. OMB staff told us that although the committee has  reviewed specific data standards, the committee has not made any  recommendations regarding these standards, nor has it produced a work  plan or timetable for addressing known challenges related to any data  standards. While these staff also said that the committee has begun to  develop processes and procedures to guide its reviews of data standards,  no details or documentation were available beyond the six-page charter.

Although the charter states that the committee will seek to promote  transparency by making information on the topics of its proceedings and  resulting outcomes available to the public, it has not yet done so. As we  have previously reported, one component of good data governance  involves establishing a process for consulting with and obtaining  agreement from stakeholders, including non-federal stakeholders  potentially affected by changes in data standards. Moreover, standards  for internal control in the federal government state that management  should communicate quality information to external parties so that these  parties can help the entity achieve its objectives and address related  risks. The DATA Act requires that OMB and Treasury consult with public  and private stakeholders in establishing data standards. The charter  states that the committee is to make publicly available both the topics of  its proceedings and the resulting outcomes. Doing so could allow public  and private stakeholders not represented on the committee to provide  better informed opinions on new data standards or revisions. Without  publicly available information about the committee, these stakeholders  may not be able to direct their input toward standards that are under  review. OMB staff told us that the committee has not kept records and  therefore has no information about its proceedings available to release.

Keeping records of the Data Standards Committee’s activities and  releasing them publicly could facilitate consultation with stakeholders.  Actions beyond recordkeeping and public release of information about the  committee are needed to address our 2015 recommendation that OMB  and Treasury establish a data governance structure consistent with  leading practices. The Data Standards Committee may provide a useful  forum for collecting stakeholder input. However, additional steps need to  be taken to build a data governance structure that fully reflects leading  practices.

section_title: Conclusions
paragraphs: Across the federal government, agencies are making final preparations to  submit the data required by the DATA Act’s May 2017 deadline. This  represents the culmination of almost 3 years of effort by OMB, Treasury,  and federal agencies to address the many policy and technical challenges  presented by the act’s requirements including the need to standardize  data elements across the entire federal government, link data contained  in agencies’ financial and award management systems, and expand the  type and amount of data to be reported. Their submissions will provide an  important initial test of the efficacy of this endeavor.

Looking forward, attention will increasingly focus on another critical goal  of the act—improving the quality of the data being produced and the  mechanisms and assurances needed to communicate such information to  users. An important component of this will be the first round of mandated  reviews agency IGs will conduct later this year, which will include  sampling and testing of data quality. However, prior audits and reviews  have already identified much about the challenges agencies face in  producing quality data. These reviews have identified material  weaknesses and significant deficiencies reported in agencies’ financial  audits and identified several widespread and longstanding issues that  present risks to agencies’ ability to submit quality data for DATA Act  reporting. In addition, specific challenges related to the operationalization  of the act’s requirements also represent potential risks to data quality.  Because of this, it is especially important for the quality assurance and  data governance frameworks established by OMB to be robust,  transparent, and effective. Users will need such mechanisms to make  informed decisions about the nature and limitations of the data being  reported. This is essential to the full implementation of the DATA Act and  its promise of improving the usefulness of those financial data to  Congress, federal managers, and the American people.

section_title: Recommendation for Executive Action
paragraphs: To promote transparency in the development and management of data  standards for reporting federal spending, the Director of the Office of  Management and Budget should ensure that the Data Standards  Committee makes information about the topics of the committee’s  proceedings and any resulting outcomes available to the public.

section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretaries of the Departments of  Agriculture, Health and Human Services, and Treasury, and the Director  of the Office of Management and Budget for review and comment. OMB  generally agreed with our recommendation. In addition, OMB, USDA, and  Treasury provided technical comments which we incorporated as  appropriate. HHS had no comments on the draft report.

We are sending copies of this report to the Secretaries of the  Departments of Agriculture, Health and Human Services, and Treasury,  and the Director of the Office of Management and Budget, as well as  interested congressional committees and other interested parties. This  report will be available at no charge on our website at http://www.gao.gov.

If you or your staff has any questions about this report, please contact J.  Christopher Mihm at (202) 512-6806 or Mihmj@gao.gov or Paula M.  Rascona at (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 our report. Key contributors to this report are listed in  appendix IV.

section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This review is part of our ongoing effort to provide reports on the progress  being made in implementing the Digital Accountability and Transparency  Act of 2014 (DATA Act).  This review focuses on what is already known  about existing challenges that affect the quality of agency financial data  as well as issues that will affect data quality as agencies begin to report  under the act. More specifically, it addresses the following: (1) risks to  data quality related to known material weaknesses and other deficiencies,  including internal controls over financial reporting, that have been  identified in selected previous audits, reviews, and reports conducted by  GAO, inspectors general (IG), and external auditors; (2) risks to data  quality related to challenges in operationalizing DATA Act policy and  technical guidance; (3) approaches that agencies will use to assure the  quality of their data submissions and any associated limitations; and (4)  efforts taken to establish a data governance structure. We also update  the current status of the Office of Management and Budget’s (OMB) and  the Department of the Treasury’s (Treasury) efforts to address our open  recommendations related to DATA Act implementation in appendix II.

To assess potential risks to data quality related to known material  weaknesses and other significant deficiencies, including internal  controls over financial reporting, that have been identified in selected  previous audits, reviews, and reports conducted by us, IGs, and external  auditors, we examined: (1) the extent to which agencies’ independent  auditors have reported material weaknesses, significant deficiencies, and  other challenges, and (2) the extent to which we previously reported  issues with government-wide systems.

To describe the extent to which agencies’ independent auditors have  disclosed material weaknesses, significant deficiencies, and other  challenges, we reviewed 22 of the 24 Chief Financial Officers Act of 1990  (CFO Act) agencies’ Performance and Accountability Reports (PAR) or  Agency Financial Reports (AFR) for fiscal year 2016 to identify material  weaknesses and significant deficiencies reported by independent  auditors. Two agencies had not issued a PAR or AFR prior to our cutoff  date of February 28, 2017, and therefore were not included in our review.  We categorized the material weaknesses and significant deficiencies  reported by the independent auditors that could affect the quality of the  data submitted by agencies under the DATA Act. We also reviewed these  agency reports for any auditor-identified noncompliance with the Federal  Financial Management Improvement Act of 1996 (FFMIA) to identify  factors that may increase the risk to reporting quality data. In addition,  because the DATA Act requires IGs and GAO to assess and report on the  completeness, timeliness, quality, and accuracy of data submitted by  federal agencies, we reviewed readiness reviews issued by IGs to identify  reported issues and challenges that could affect the quality of spending  data reported under the DATA Act. Four agency IGs did not conduct a  readiness review or their reports were not issued prior to our cutoff date  of February 28, 2017, and therefore were not included in our review. To  ensure we had a comprehensive understanding of these material  weaknesses, significant deficiencies, and other challenges, we analyzed  these reported issues to determine the extent to which they may hinder  the entities’ abilities to submit complete and accurate spending data and  categorized them.

In our analysis of agencies’ material weaknesses, significant deficiencies,  and other challenges reported by independent auditors, we identified  three overall categories that could affect data quality: (1) Accounting and  Financial Management, (2) Financial Management Systems, and (3)  Information Technology (IT) Security and Controls. We reviewed the  auditor reports, PARs, AFRs, and readiness reviews using a data  collection instrument to document our assessment of the extent to which  the issues identified in these reports fit into the aforementioned  categories.

To describe the extent to which independent auditors have reported  issues with government-wide systems, we reviewed our previous reports  to identify reported deficiencies in government-wide systems that could  affect the quality of spending data submitted to USASpending.gov.  According to Treasury, the source systems include: (1) the Federal  Procurement Data System-Next Generation, (2) System for Award  Management, (3) the Award Submission Portal, and (4) the Federal  Funding Accountability and Transparency Act Subaward Reporting  System. Although the conditions observed in these reports may not be  present in all federal agencies and systems, they illustrate conditions that  increase the risks and effects to agency data quality.

To assess the risks to data quality related challenges in operationalizing  DATA Act policy and technical guidance during implementation of the act  we examined (1) the extent to which selected agencies have been able to  submit, validate, and certify their data submissions to the DATA Act  broker and any challenges they reported, and the (2) the steps OMB and  Treasury have taken to address known reporting challenges.

To understand the extent to which agencies have been able to submit,  validate, and certify their data submissions we reviewed technical  documentation; reviewed experiences at two agencies; interviewed  knowledgeable officials from OMB, Treasury, and selected federal  agencies; and reviewed past GAO reports to identify data quality issues  related to DATA Act implementation. The review of technical  documentation included material related to the schema version 1.01 to  understand reporting structure, and the broker to understand its  functionality and validation processes. We obtained technical  documentation from the Federal Spending Transparency public website.

For the examination of experiences at agencies, we selected two  agencies based on whether they were in compliance with existing federal  requirements for federal financial management systems; the type of  federal funding provided (such as grants, loans, or procurements); and  their status as federal shared service providers for financial management.  Based on these selection factors, we chose the U.S. Department of  Health and Human Services (HHS), and the U.S. Department of  Agriculture (USDA). Although the agencies’ experiences are not  generalizable, they illustrate different conditions and challenges under  which agencies are implementing the act. These two agencies were also  selected for our January and December 2016 reports.

To understand the steps OMB and Treasury have taken to address  known reporting challenges, we reviewed OMB policy guidance intended  to facilitate agency reporting. We also interviewed OMB staff and  Treasury officials to obtain information about steps they have taken to  respond to previously identified challenges, agency requests for  clarification on reporting requirements, and any plans for additional  guidance. We also met with OMB staff and Treasury officials to obtain  information on the status of efforts to address our previous  recommendations related to providing policy and technical guidance.

To assess the approach that agencies will use to assure the quality of  their data submissions and any associated limitations we (1) reviewed  relevant OMB policy guidance; (2) spoke with relevant agency officials;  and (3) examined experiences at our two case study agencies, HHS and  USDA. We reviewed OMB policy guidance to understand the assurance  process agency senior accountable officials (SAO) should follow,  including the authoritative sources for each file to be submitted in the  DATA Act reporting process. We spoke with OMB staff and Treasury  officials to understand the purpose and rationale of parts of the assurance  process, and asked about plans for additional guidance. We spoke with  HHS and USDA officials, and requested and reviewed documentation  where applicable, to understand any concerns they have or challenges  they are facing or expect to face during the assurance process.

To determine the current status of OMB’s and Treasury’s efforts to  implement a data governance structure for the DATA Act, we met with  OMB staff and Treasury officials to obtain information on the status of  their efforts to address our previous recommendation that they establish  such a structure. We reviewed documents provided by OMB, including  policy memorandums and the charter of the Data Standards Committee,  an advisory body established by OMB as part of its data governance  efforts. We also met with representatives of organizations with expertise  in data governance to review the key practices we described in our  December 2016 report and obtain additional information about how these  key practices have been implemented in data governance frameworks.

We conducted this performance audit from January 2017 to April 2017 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: Status of GAO’s Recommendations Related to the DATA Act and Data Transparency
subsections: section_title: Report GAO-14-476 Data Transparency: Oversight Needed to Address Underreporting and Inconsistencies on Federal Award Website (June 2014)
paragraphs: Recommendations  1.  To improve the completeness and  accuracy of data submissions to the  USASpending.gov website, the  Director of the Office of Management  and Budget (OMB), in collaboration  with the Department of the Treasury's  (Treasury) 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.

Implementation Status   Open. OMB and Treasury are working to implement the Digital  Accountability and Transparency Act of 2014 (DATA Act), which  includes several provisions that may address these  recommendations once fully implemented.   1) OMB staff said they continue to agree with GAO that  additional guidance is needed regarding agency responsibilities  for reporting awards funded by non-annual appropriations but  have not yet developed this guidance.   2) OMB staff stated that they believe a memorandum issued in  November 2016 (M-17-04) addresses the applicability of  USASpending.gov reporting requirements to non-classified  awards associated with intelligence operations.  We reviewed  the memorandum and determined that additional guidance is still  needed to ensure complete reporting of unclassified awards as  required by FFATA.     3) OMB staff have agreed that it will be important to clarify  guidance on how agencies can report on award titles to  appropriately describe the award’s purposes and noted that they  are working on providing additional guidance to agencies as part  of their larger DATA Act implementation efforts.   4) OMB released policy guidance in May 2016 (Management  Procedures Memorandum (MPM) No. 2016-03) and November  2016 (M-17-04) that identifies the authoritative sources for  reporting procurement and award data. However, our review of  this policy guidance determined that it does not address the  underlying source that can be used to verify the accuracy of non- financial procurement data or any source for data on assistance  awards. This recommendation was included in priority  recommendation letters sent to OMB by the Comptroller General  in July 2016 and Spring 2017.

section_title: Report
paragraphs: Recommendations  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.

Implementation Status   Open. As part of their DATA Act implementation efforts, OMB  issued policy guidance in May 2016 (MPM 2016-03) and  November 2016 (M-17-04) that identifies authoritative systems  to validate agency spending information. The guidance also  directs the DATA Act senior accountable officials (SAO) to  provide quarterly assurance over the data reported to  USASpending.gov and specifies that this assurance should  leverage data quality and management controls established in  statute, regulation, and federal government-wide policy and be  aligned with the internal control and risk management strategies  in Circular A-123. In addition, the DATA Act broker will provide a  set of validation rules to further ensure the proper formatting of  data submitted to USASpending.gov. In addition, OMB staff  stated that they have reviewed reports from agency inspectors  general (IG) on DATA Act implementation and plan to use future  IG reports on data quality as part of a government-wide  monitoring plan.   However, OMB has not documented this monitoring plan. OMB  staff noted that OMB and Treasury had prioritized linking  financial data to award data as a means of addressing the issue  of unreported awards we previously identified. We agree that  linking financial and award data can help agencies identify gaps  in reporting. However, other than citing agencies’ responsibility  to certify the accuracy of their data, OMB did not identify any  new or revised processes aimed at addressing the accuracy  concerns we addressed. This recommendation was included in  priority recommendation letters sent to OMB by the Comptroller  General in December 2015, July 2016, and Spring 2017.

section_title: GAO-15-752T DATA Act: Progress Made in Initial Implementation but Challenges Must be Addressed as Efforts Proceed (July 2015)
paragraphs: 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.

Open. OMB staff told us that they do not expect to be able to  identify programs for the purposes of DATA Act reporting until  sometime after May 2017. However, they said that they are  studying a program definition and alignment to identify a more  consistent framework for defining federal agency programs with  the aim of improving government-wide comparability and tying  programs to spending. The effort is supported by a working  group comprised of representatives from the Chief Financial  Officers (CFO) community and other federal communities. OMB  staff stated that they are incorporating ongoing feedback from  this group into OMB’s efforts to identify a framework for defining  federal agency programs. This was identified as a high priority  recommendation in letters sent from the Comptroller General to  the Director of OMB in December 2015, July 2016, and Spring  2017.

section_title: Report
paragraphs: Recommendations  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.

section_title: GAO-16-261 DATA Act: Data Standards Established, but More Complete and Timely Guidance Is Needed to Ensure Effective Implementation (January 2016)
paragraphs: 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.

Implementation Status   Open. OMB and Treasury have taken some initial steps to build  a data governance structure including conducting interviews with  key stakeholders and developing a set of recommendations for  decision-making authority. In September 2016, OMB and  Treasury took another step toward establishing a data  governance structure by creating a new Data Standards  Committee that will be responsible for advising OMB and  Treasury on new data elements and revisions to established  standards. According to OMB staff, the committee has held  several meetings but has not yet provided recommendations to  OMB.   However, more remains to be done. As part of our ongoing  feedback to OMB, we shared five key practices that we believe  should inform their plans to develop a data governance  framework moving forward. This was identified as a high priority  recommendation in letters sent from the Comptroller General to  the Director of OMB in December 2015 and to the Director of  OMB and the Secretary of the Treasury in July 2016 and Spring  2017.  Open. In May 2016, OMB issued additional guidance for  implementing the DATA Act entitled Implementing the Data- Centric Approach for Reporting Federal Spending Information  (Management Procedures Memorandum No. 2016-03). This  memorandum provided guidance on new federal prime award  reporting requirements, agency assurances, and authoritative  sources for reporting. In November 2016, OMB followed this with  additional guidance intended to provide clarification on how  agencies should: (1) report financial information for awards  involving Intragovernmental Transfers (IGTs); (2) report financial  assistance award records containing personally identifiable  information (PII); and (3) provide agency SAO assurance  regarding quarterly submissions to USASpending.gov. OMB  staff also stated that they sent an email announcement to  agency senior accountable officials to clarify that information  submitted to USASpending.gov is subject to plain language  requirements.    Despite these positive steps, additional guidance is needed to  facilitate agency implementation of certain data definitions (such  as "primary place of performance" and "award description") in  order to produce consistent and comparable information. We  continue to have concerns about whether the guidance provides  sufficient detail in areas such as the process for providing  assurance on data submissions. This was identified as a high  priority recommendation in letters sent from the Comptroller  General to the Director of OMB and the Secretary of the  Treasury in July 2016 and Spring 2017.

section_title: Report
paragraphs: Recommendations  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.

section_title: GAO-16-438 DATA Act: Section 5 Pilot Design Issues Need to Be Addressed to Meet Goal of Reducing Recipient Reporting Burden (April 2016)
paragraphs: 1.  To enable the development of  effective recommendations for  reducing reporting burden for  contractors, the Director of OMB  should ensure that the procurement  portion of the pilot reflects leading  practices for pilot design.

Implementation Status   Closed–Implemented. OMB and Treasury issued the finalized  technical guidance (DATA Act Information Model Schema,  version 1.0) in April 2016 intended to provide a stable base for  agencies and enterprise resource planning (ERP) vendors to  develop data submission plans. Treasury also released an alpha  version of the broker in April 2016 and a beta version of the  broker in June 2016. On September 30, 2016, Treasury released  its latest version of the broker, which it stated was fully capable  of performing the key functions of extracting and validating  agency data. Following this release, Treasury continued to  release broker updates approximately every 2 weeks. The  software patches developed by ERP vendors, intended to help  agencies submit required data to the broker, were all released  by the end of December 2016. This was identified as a high  priority recommendation in letters sent from the Comptroller  General to the Director of OMB and the Secretary of the  Treasury in July 2016.  Closed-implemented.   Our review of the revised design for the procurement portion of  the Section 5 Pilot updated in January 2017 found that it largely  reflected all 5 leading practices for effective pilot design. For  example, in the revised design OMB provides additional details  regarding its assessment methodology, includes a data analysis  plan to evaluate pilot results, describes a strategy for two-way  stakeholder outreach, and includes additional details on  scalability of the pilot design. As a result we are closing this  recommendation as implemented.

section_title: Report GAO-16-698 Improvements Needed in Reviewing Agency Implementation Plans and Monitoring Progress (July 2016)
paragraphs: Recommendations  1.  To help ensure effective government- wide implementation and that  complete and consistent spending  data will be reported as required by  the DATA Act, the Director of OMB,  in collaboration with the Secretary of  the Treasury, should establish or  leverage existing processes and  controls to determine the complete  population of agencies that are  required to report spending data  under the DATA Act and make the  results of those determinations  publicly available.  2.  To help ensure effective government- wide implementation and that  complete and consistent spending  data will be reported as required by  the DATA Act, the Director of OMB,  in collaboration with the Secretary of  the Treasury, should reassess, on a  periodic basis, which agencies are  required to report spending data  under the DATA Act and make  appropriate notifications to affected  agencies.

Implementation Status   Open. As we previously reported, OMB stated that each agency  is responsible for determining whether it is subject to the DATA  Act. To help agencies make that determination, OMB published  guidance in the form of frequently asked questions and stated  that the agencies may consult with OMB for additional counsel.  In response to our recommendation, OMB staff told us they have  reached out to federal agencies to identify which agencies have  determined that they are exempt from reporting under the DATA  Act and prepared a list of such agencies. However, OMB has not  provided us the list or the procedures for reviewing agency  determinations and compiling the results. In addition, OMB has  not established procedures for ensuring non-exempt agencies  are reporting spending data as required. Finally, OMB has not  stated whether it will make the results of the determinations  publicly available.  Further, additional clarification would improve the usefulness of  the frequently asked questions. For example, they state “Any  Federal agency submitting data that OMB posts on its SF 133  Report on Budget Execution and Budgetary Resources is  required to comply with DATA Act reporting.” However, the SF  133 Report for the third quarter of 2016 includes entities such as  the Postal Service which are not required by the DATA Act to  report financial and payment information. In explaining the  frequently asked questions to us, OMB officials clarified that they  meant that an entity is required to report if its data appears on  the SF 133 and it meets the applicable statutory definition of  agency. The frequently asked questions document does not  clearly communicate this two-prong approach. Additionally,  OMB’s verbal clarification when meeting with us does not  account for those entities that meet the statutory definition of  agency and are required by the DATA Act to report financial and  payment information but do not appear on the SF 133. This was  identified as a high priority recommendation in a letter sent from  the Comptroller General to the Director of OMB in Spring 2017.  Open. OMB does not have plans to reassess, on a periodic  basis, which agencies are required to report spending data  under the DATA Act. We continue to believe action on this  recommendation is important to effectively implement the DATA  Act. This was identified as a high priority recommendation in a  letter sent from the Comptroller General to the Director of OMB  in Spring 2017.

section_title: Report
paragraphs: Recommendations  3.  To help ensure effective  implementation of the DATA Act by  the agencies and facilitate the further  establishment of overall government- wide governance, the Director of  OMB, in collaboration with the  Secretary of the Treasury, should  request that non-Chief Financial  Officers Act of 1990 (CFO Act)  agencies required to report federal  spending data under the DATA Act  submit updated implementation  plans, including updated timelines  and milestones, cost estimates, and  risks, to address new technical  requirements.  4.  To help ensure effective  implementation of the DATA Act by  the agencies and facilitate the further  establishment of overall government- wide governance, the Director of  OMB, in collaboration with the  Secretary of the Treasury, should  assess whether information or plan  elements missing from agency  implementation plans are needed and  ensure that all key implementation  plan elements are included in  updated implementation plans.

Implementation Status   Open. On June 15, 2016, OMB directed CFO Act agencies to  update key components of their implementation plans by August  12, 2016. The requirement did not extend to non-CFO Act  agencies. OMB stated that it is monitoring non-CFO Act  agencies by providing feedback to non-CFO Act agencies  through workshops instead of requesting updated  implementation plan information. According to OMB officials,  OMB has not followed-up with non-CFO Act agencies or  requested updated implementation plan information because  they are working with the CFO Act agencies which comprise  approximately 90 percent of federal spending.   In addition to  these outreach efforts, OMB has worked with Treasury to  engage with small and independent agencies through weekly  phone calls and other forms of communication. However, the  DATA Act applies to most federal agencies, and we believe that  it is important to monitor smaller agencies’ implementation plans  as well as large agencies. This was identified as a high priority  recommendation in a letter sent from the Comptroller General to  the Director of OMB in Spring 2017.  Closed–Implemented. On December 8, 2016, OMB testified  that OMB had reviewed implementation plan updates from the  24 CFO Act agencies, which enabled them to track and assess  agency progress toward successful implementation and identify  areas where subsequent action was needed. OMB also  conducted in-person follow-up meetings with nine agencies that  reported significant issues to better understand their challenges.   We determined that these actions meet the intent of our  recommendation.

section_title: Report GAO-17-156 DATA Act: OMB and Treasury Have Issued Additional Guidance and Have Improved Pilot Design but Implementation Challenges Remain
paragraphs: Recommendations  1.

Implementation Status   Closed–implemented. In response to our recommendation,  OMB has made some revisions to the procurement portion of the  pilot design including adding additional explanatory language.    Our review of the revised design for the procurement portion of  the Section 5 Pilot updated in January 2017 found that it largely  reflected all 5 leading practices for effective pilot design. As a  result we are closing this recommendation as implemented.

section_title: (December 2016)
paragraphs: In order to ensure that the  procurement portion of the Section 5  Pilot better reflects leading practices  for effective pilot design, the Director  of OMB should clearly document in  the pilot's design how data collected  through the centralized certified  payroll reporting portal will be used to  test hypotheses related to reducing  reporting burden involving other  procurement reporting requirements.  This should include documenting the  extent to which recommendations  based on data collected for certified  payroll reporting would be scalable to  other Federal Acquisition Regulation- required reporting and providing  additional details about the  methodology that would be used to  assess this expanded capability in  the future.

section_title: GAO-17-460 DATA Act: Office of Inspector General Reports Help Identify Agencies’ Implementation Challenges

section_title: (April 2017)
paragraphs: OMB and the Secretary of the  Treasury establish mechanisms to  assess the results of independent  audits and reviews of agencies’  compliance with the DATA Act  requirements, including those of  agency Offices of Inspectors General,  to help inform full implementation of  the act’s requirements across  government.

Open. OMB stated that it generally concurred with our  recommendation, but noted that OIG readiness reviews are just  one of its agency engagement efforts, which also includes  reviewing agency implementation plans, holding numerous  meetings with the agencies, and requesting regular progress  updates on the agencies’ implementation efforts. We recognize  that OMB’s efforts to engage regularly with agencies are helpful  for monitoring agencies’ implementation. However, it is also  important to use information in independent audits and reviews  to validate agencies’ progress. This was identified as a high  priority recommendation in a letter sent from the Comptroller  General to the Director of OMB in Spring 2017.

section_title: Appendix III: Deficiencies Reported in CFO Act Agencies’ Fiscal Year 2016 Financial Reports That May Affect Data Quality
paragraphs: Legend:   — = not applicable.  = Significant deficiency or material weakness identified in deficiency category.

Agency auditor determined noncompliance with Section 803(a) of the Federal Financial Management  Improvement Act of 1996 (FFMIA).  Agency did not issue its performance and accountability report or agency financial report by  February 28, 2017, therefore it was not included in our review.  Auditors did not report any material weaknesses or significant deficiencies relevant to Digital  Accountability and Transparency Act of 2014 (DATA Act) reporting.

section_title: Appendix IV: GAO Contacts and Staff Acknowledgements
subsections: section_title: GAO Contacts

section_title: Staff Acknowledgments
paragraphs: In addition to the above contacts, Peter Del Toro (Assistant Director),  Michael LaForge (Assistant Director), Kathleen Drennan (Analyst-in- Charge), Theodore Alexander, Maria C. Belaval, Thomas Hackney,  Charles Jones, Kirsten Leikem, Robert L. Gebhart, Carroll M. Warfield,  Jr., James Skornicki, Sophie Geyer, Mark Canter, James Sweetman, Jr.,  Andrew J. Stephens, Carl Ramirez and Jenny Chanley made major  contributions to this report. Additional members of GAO’s DATA Act  Internal Working Group also contributed to the development of this report.

section_title: Related GAO Products
paragraphs: DATA Act: Office of Inspector General Reports Help Identify Agencies’  Implementation Challenges. GAO-17-460. Washington, D.C.: April 26,  2017.

DATA Act: Implementation Progresses but Challenges Remain.  GAO-17-282T. Washington, D.C.: December 8, 2016.

DATA Act: OMB and Treasury Have Issued Additional Guidance and  Have Improved Pilot Design but Implementation Challenges Remain.  GAO-17-156. Washington, D.C.: December 8, 2016.

DATA Act: Initial Observations on Technical Implementation.  GAO-16-824R. Washington, D.C.: August 3, 2016.

DATA ACT: Improvements Needed in Reviewing Agency Implementation  Plans and Monitoring Progress. GAO-16-698. Washington, D.C.: July 29,  2016.

DATA Act: Section 5 Pilot Design Issues Need to Be Addressed to Meet  Goal of Reducing Recipient Reporting Burden. GAO-16-438. Washington,  D.C.: April 19, 2016.

DATA Act: Progress Made but Significant Challenges Must Be Addressed  to Ensure Full and Effective Implementation. GAO-16-556T. Washington,  D.C.: April 19, 2016.

DATA Act: Data Standards Established, but More Complete and Timely  Guidance Is Needed to Ensure Effective Implementation. GAO-16-261.  Washington, D.C.: January 29, 2016.

Federal Spending Accountability: Preserving Capabilities of Recovery  Operations Center Could Help Sustain Oversight of Federal  Expenditures. GAO-15-814. Washington, D.C.: September 14, 2015.

DATA Act: Progress Made in Initial Implementation but Challenges Must  be Addressed as Efforts Proceed. GAO-15-752T. Washington, D.C.: July  29, 2015.

Federal Data Transparency: Effective Implementation of the DATA Act  Would Help Address Government-wide Management Challenges and  Improve Oversight. GAO-15-241T. Washington, D.C.: December 3, 2014.

Government Efficiency and Effectiveness: Inconsistent Definitions and  Information Limit the Usefulness of Federal Program Inventories.  GAO-15-83. Washington, D.C.: October 31, 2014.

Data Transparency: Oversight Needed to Address Underreporting and  Inconsistencies on Federal Award Website. GAO-14-476. Washington,  D.C.: June 30, 2014.

Federal Data Transparency: Opportunities Remain to Incorporate  Lessons Learned as Availability of Spending Data Increases.  GAO-13-758. Washington, D.C.: September 12, 2013.

Government Transparency: Efforts to Improve Information on Federal  Spending. GAO-12-913T. Washington, D.C.: July 18, 2012.

Electronic Government: Implementation of the Federal Funding  Accountability and Transparency Act of 2006. GAO-10-365. Washington,  D.C.: March 12, 2010.

Fast facts: Under the DATA Act, federal agencies must improve the federal spending data that are available to the public through the USASpending.gov website. We've reviewed the implementation of the DATA Act and found that financial management challenges at federal agencies, as well as issues with OMB’s reporting guidance, will affect the quality of the data published on the website.

OMB also established a Data Standards Committee to provide advice on these data. However, this committee has not made the topics and outcomes of its proceedings public. We recommended they do so.

Question-summary annotations: questions: question: What can create risks to data quality?
answer: Internal control weaknesses and other challenges pose risks to data quality.

question: What have reports from financial audits and IG readiness reviews shown?
answer: Material weaknesses and significant deficiencies reported in agencies' financial audits and other challenges reported in Inspectors General (IG) readiness review reports show several widespread and longstanding issues that present risks to agencies' abilities to submit quality data as required by the Digital Accountability and Transparency Act of 2014 (DATA Act).
child_questions: question: How can these issues be categorized?
answer: These issues fall into three categories: (1) accounting and financial management, (2) financial management systems, and (3) information technology security and controls.

question: What else has been reported on this topic?
answer: GAO has also reported weaknesses and challenges in government-wide financial management systems used for DATA Act reporting.

questions: question: How might challenges with guidance impact data quality?
answer: Challenges related to how agencies report certain intragovernmental transactions, reconcile recipient address information, and align required DATA Act files with missing data continue to present risks to the quality of data displayed on USASpending.gov.
child_questions: question: How quickly do OMB and Treasury expect to resolve these challenges?
answer: The Office of Management and Budget (OMB) and the Department of the Treasury (Treasury) have stated that they do not expect to resolve these challenges before the May 2017 reporting deadline.
child_questions: question: What may happen if these challenges are not resolved?
answer: Unresolved challenges affecting data quality could lead policymakers and the public to draw inaccurate conclusions from the data.

question: What do these challenges tell us?
answer: This challenge underscores the need for OMB to address GAO's open recommendation that it provide agencies with additional guidance to address data quality issues.

question: How does the GAO plan to help?
answer: GAO will continue to assess how OMB, Treasury, and agencies address data quality issues moving forward.

questions: question: What is directed by OMB guidance?
answer: OMB guidance directs senior accountable officials at each agency to rely on existing assurance processes when they certify that their agencies' DATA Act submissions are valid and reliable.

question: How are these processes viewed by the GAO?
answer: However, GAO identified concerns regarding some existing assurance processes.
child_questions: question: What are some specific concerns raised by the GAO?
answer: For example, OMB directed agencies to use a General Services Administration assurance statement attesting to the quality of data in two source systems, but the assurance statement focuses on data security rather than data quality, and it is unclear whether it applies to both procurement and financial assistance data.

question: How has the OMB reacted to these concerns?
answer: OMB is aware of these issues and expects to finalize the assurance process in time for the May 2017 reporting deadline.

question: How do these issues affect GAO's recommendation status?
answer: Accordingly, GAO is not making a recommendation at this time but will assess the quality of the assurance process in future work.

questions: question: Why are efforts to establish a data governance structure still at an early stage?
answer: OMB has taken some actions to improve its data governance framework, but efforts to establish a fully functioning data governance structure are at an early stage with many specifics yet to be worked out.

question: What has been conducted so far by the OMB?
answer: OMB formally chartered the Data Standards Committee as an advisory body in November 2016 to focus on clarifying existing data element definitions and identifying needs for new standards.
child_questions: question: What is included in this charter?
answer: The charter states that the committee will promote transparency by making the topics and outcomes of its proceedings public, but OMB has not kept records of the committee's meetings nor has the committee produced a work plan for moving forward.

question: Why is public knowledge of committee activities important?
answer: Public information about the committee's activities and outcomes would facilitate consultation with stakeholders, as required by the act.

questions: question: Why are agencies rushing to make their final preparations?
answer: Across the federal government, agencies are making final preparations to submit the required data by the DATA Act's May 2017 deadline.
child_questions: question: What is the significance of the final preparations?
answer: This represents the culmination of almost 3 years of effort by OMB, Treasury, and federal agencies to address many policy and technical challenges.

question: How will attention be redirected in the future?
answer: Moving forward, attention will increasingly focus on another critical goal of the act: improving the quality of the data produced.

questions: question: What is included in GAO's latest report?
answer: This report examines (1) risks to data quality related to known material weaknesses and other deficiencies previously identified by GAO, IGs, and external auditors; (2) risks to data quality related to challenges in operationalizing policy and technical guidance; (3) agencies' assurances of the quality of their data submissions; and (4) efforts taken to establish a data governance structure.
child_questions: question: How was this report conducted?
answer: GAO reviewed DATA Act implementation documents and auditors' reports on known challenges and interviewed staff at OMB, Treasury, and other agencies.