DATA Act: Data Standards Established, but More Complete and Timely Guidance Is Needed to Ensure Effective Implementation
Released: 2016-01-29T00:00:00

Letter

Background

The DATA Act Expanded the Required Reporting of Federal Spending Data under FFATA

During the last decade, Congress and the administration have taken several steps to improve the transparency of federal spending data. In 2006, Congress passed and the President signed the Federal Funding Accountability and Transparency Act of 2006 (FFATA) to increase the transparency and accountability of federal contracts and financial assistance awards. Among other things, FFATA required OMB to establish USAspending.gov, containing obligational data on federal awards and subawards, which was launched in December 2007. One of the stated purposes of the DATA Act is to expand FFATA to include direct federal agency expenditures and link contract, loan, and grant spending information to federal programs so that taxpayers and policy makers can more effectively track federal spending.

Reporting throughout the federal spending cycle. Full and effective implementation of the DATA Act will allow funds to be tracked at multiple points in the federal spending lifecycle. For example, once fully implemented, amounts appropriated, obligated, and subsequently outlayed for a particular program activity would all be publicly available on USAspending.gov or a successor website. These additional federal spending cycle data on appropriations, obligations, and outlays will provide more transparency on federal awards. USAspending.gov provides information on award amounts for grants, contracts, and other types of information, but the only information currently available is data on federal award obligations.

The DATA Act represents a significant change to the types of data reported by requiring additional budget and financial information, which, to date, has not been reported on USAspending.gov. The act requires budget and financial information to be reported on a monthly basis if practicable, but not less than quarterly. However, OMB’s May 2015 guidance directs agencies to continue reporting on awards data at least bi-weekly. To cover appropriations and outlays in addition to obligations, OMB and Treasury officials noted that data will need to be pulled from budgetary and financial systems in addition to the multiple contract and assistance systems currently used. It is essential that all of this data be appropriately linked to achieve the full potential for users of this data inside and outside of government.

Reporting on more types of federal spending. The DATA Act requires reporting on almost all types of federal spending. Currently, USAspending.gov reports data on federal awards including grants, contracts, and loans. Under the DATA Act, however, more budget and financial information will be available that should allow users of the data to organize and analyze the data in ways that are not currently possible. Some of these new types of spending information include:

Budget and financial information on the different types of goods and services purchased by the federal government, such as personnel compensation, will be reported in the aggregate.

Budget and financial information from financial arrangements of the federal government, such as public-private partnerships, interagency agreements, and user charges, will also be reported.

As part of their guidance to agencies on DATA Act implementation, OMB lowered the threshold at which agencies must report data on financial assistance and procurement prime awards from $25,000 or greater to those awards greater than the micro-purchase threshold, which is currently $3,500.

Improving data quality. Our prior work found that unclear guidance and weaknesses in executive branch oversight contributed to persistent challenges with data on USAspending.gov. These challenges relate to the quality and completeness of data submitted by federal agencies. For example, in 2010, we reported that USAspending.gov did not include information on awards from 15 programs at 9 agencies for fiscal year 2008. In that report we also reviewed a sample of 100 awards on the website and found that each award had at least one data error. In June 2014, we reported that roughly $619 billion in assistance awards were not properly reported in fiscal year 2012. In addition, we found that few reported awards—between 2 and 7 percent—contained information that was fully consistent with agency records for all 21 data elements we examined. A factor that contributed to this error rate was the lack of guidance on how to interpret some data elements including award description. See appendix II for more information on our recommendations related to these findings and OMB’s and Treasury’s actions to date.

The DATA Act identifies the improvement of data quality as one of its purposes. Toward that end, the act requires that inspectors general conduct reviews of data samples submitted by their respective agency and subsequently assess and report on the data’s completeness, timeliness, quality, and accuracy. We are required to review these reports and then assess and compare the completeness, timeliness, quality, and accuracy of the data across the federal government.

OMB and Treasury Issued Guidance to Help Agencies Carry Out DATA Act Reporting Requirements

OMB and Treasury issued initial guidance to federal agencies in May 2015 on reporting requirements pursuant to FFATA as well as the new requirements that agencies must employ pursuant to the DATA Act. The guidance also directs agencies to implement data definition standards for the collection and reporting of agency-level and award-level data by May 9, 2017; implement a standard data exchange format for providing data to Treasury to be displayed on USAspending.gov or a successor site; and link agency financial systems with award systems by continuing the use of specified unique identification numbers for financial assistance awards and contracts.

OMB asked agencies to submit DATA Act implementation plans in September 2015, concurrent with the fiscal year 2017 budget request. According to OMB staff, as of December 2015, all 24 CFO Act agencies as well as 27 smaller federal agencies have submitted implementation plans. OMB required the plans to include: (1) a timeline of tasks and steps toward implementing the requirements of this guidance; (2) an estimate of costs to implement these tasks and steps; (3) a detailed narrative that explains the required steps, identifies the underlying assumptions, and outlines the potential difficulties and risks to successfully implement the plan; and (4) a detailed project plan that agencies will develop over time.

Additionally, OMB and Treasury issued a DATA Act Implementation Playbook in June 2015, which recommends eight key steps for agencies to fulfill their requirements under the DATA Act (see table 1).

To support this effort, OMB and Treasury issued guidance to help agencies develop the plans and hosted workshops and conference calls to address agency questions.

OMB and Treasury Established Government-wide Data Standards, but More Remains to Be Done to Ensure Consistent and Comparable Reporting of Federal Spending Data

OMB and Treasury Issued 57 Standardized Data Element Definitions for Reporting Federal Spending Data

The DATA Act requires OMB and Treasury to establish government-wide financial data standards for any federal funds made available to or expended by federal agencies and recipients of federal funds. The specific items to be reported under the act are generally referred to as data elements. The overall data standardization effort consists of two distinct, but related, components: (1) establishing definitions which describe what is included in each data element with the aim of ensuring that information will be consistent and comparable, and (2) creating a data exchange standard with technical specifications which describe the format, structure, tagging, and transmission of each data element. The data exchange standard is also intended to depict the relationships between standardized data elements.

On May 8, 2015, a year after the passage of the DATA Act, OMB and Treasury issued the first 15 standardized data element definitions, including definitions for 8 new elements introduced by the DATA Act. From June through August 2015, OMB and Treasury released an additional 42 standardized data element definitions for reporting under FFATA, as amended by the DATA Act. During this time, OMB and Treasury released data element definitions in stages and opened a 3- week feedback period for federal and nonfederal stakeholders to provide public input on the definitions before they were issued. During this period we separately met with OMB and Treasury staff several times to share our views and identify issues and concerns with proposed definitions. See figure 1 for a listing of the 57 standardized data elements grouped by type. See appendix III for the definitions of each of the data elements.

Data Element Definitions Generally Followed Leading Practices, but Exceptions Could Result in Inconsistent Reporting if Not Addressed

The DATA Act requires that data standards—to the extent reasonable and practicable—incorporate widely-accepted common data elements, such as those developed by international standards-setting bodies, federal agencies with authority over contracting and financial assistance, and accounting standards organizations. Incorporating leading practices from international standards organizations offers one way to help reduce uncertainty and confusion when reporting and interpreting data standards. Developing a well-crafted data element definition is one key component to ensuring that a data standard produces consistent and comparable information. The ISO, a standards-setting body composed of international experts in various fields of study, has developed 13 leading practices for formulating data definitions for the purposes of specifying, describing, explaining, and clarifying the meaning of data. These practices include that definitions be precise and unambiguous, avoid circular reasoning, and be expressed without embedding definitions of other data or underlying concepts, among others.

We found that the 57 DATA Act data element definitions largely followed ISO leading practices for the formulation of data definitions. Specifically, 12 data element definitions met all of the ISO leading practices and each of the remaining 45 definitions met no fewer than 9 leading practices, meaning that even the lowest-rated data elements in our review adhered to almost 70 percent of the ISO leading practices. We also found variation in which of the leading practices each definition satisfied. For example, our analysis found that all 57 definitions followed the leading practices of avoiding circular reasoning and being stated as a descriptive phrase or sentence, whereas 38 of the 57 were determined to be sufficiently precise and unambiguous. Table 2 provides a summary of our findings applying the ISO leading practices for formulating data definitions to the definitions developed by OMB and Treasury as part of DATA Act implementation.

Although most of the definitions generally adhered to ISO leading practices, examples where data elements did not do so raise potential concerns regarding an increased risk that agencies may not apply the definitions consistently, thus affecting the comparability of reported data. Data element definitions that are imprecise or ambiguous may allow for more than one interpretation by agency staff collecting, compiling, and reporting on these data and thus could result in inconsistent and potentially misleading reporting when aggregated across government or compared between agencies. For example, OMB and Treasury defined Award Description as “a brief description of the purpose of the award.” In our previous work on the data quality of USAspending.gov, we identified challenges with the Award Description data element, citing the wide range of information that agencies report as the description or purpose. Specifically, we found that agencies routinely provided information for this data element using shorthand descriptions, acronyms, or terminology that could only be understood by officials at the agency that made the award. For example, in our 2010 report we found that the description for one contract we reviewed read “4506135384!DUMMY LOA,” while the award records indicated that the award was for the purchase of metal pipes. Another was described as “Cont Renewals All Types,” while the award records showed the contract was for an apartment building. This lack of basic clarity would make the data element difficult for others outside the agency to understand and would also limit the ability to meaningfully aggregate or compare this data across the federal government.

We made recommendations to OMB in 2010 and 2014 and to Treasury in 2014 to improve the accuracy and completeness of Award Description, which have yet to be addressed. At that time, Treasury officials neither agreed nor disagreed with our recommendations, while OMB staff generally agreed with them stating that they were consistent with actions required under the DATA Act. These OMB staff said while they would consider interim steps to improve data quality, they did not want to inhibit agency efforts to work toward implementation of the act. Appendix II provides more information on the status of these recommendations. In subsequent discussions, OMB staff stated that they are hesitant to make substantial changes to the reporting of Award Description, which focuses on the purpose of a federal award, before additional progress is made on the related and more complex issue of how to ascribe spending data to a specific government program. However, it is unclear why this should prevent them from taking steps such as providing agencies with guidance on how to avoid excessive jargon, provide a specific level of detail, or develop a standardized taxonomy of appropriate responses.

While the data quality concerns presented by the definition of Award Description are relatively straightforward to address, other definitions that we found to be imprecise and ambiguous present greater challenges due to long-standing differences in reporting across agencies and among the federal grant, procurement, and loan communities. An example of this is the four data elements that OMB and Treasury have issued that collectively represent the concept of Primary Place of Performance. The location or place of performance of specific grant, contract, or other federal spending has long been a data element collected by agencies. However, in the past, agencies have taken varied approaches to reporting place of performance information—sometimes describing where the funded activity takes place, sometimes the recipient of the product or activity, or sometimes the location of the administrative headquarters of the provider or a sub-entity. The definitions issued by OMB and Treasury standardize some of the mechanics of what Primary Place of Performance covers, such as city, county, state, and ZIP+4 codes. In addition, OMB staff told us that, by using the words “where the predominant performance of the award will be accomplished” the definitions are intended to focus on where the majority of the activity actually takes place rather than, for example, the location of the ultimate recipient of the product or service funded by federal spending.

However, OMB’s and Treasury’s definitions still leave room for differing interpretations that could result in agencies capturing and reporting this information differently. For example, OMB staff told us that they interpret the term “predominant performance” to mean “more than half,” but this clarification is not contained in the definition itself, nor in the accompanying white paper that was issued with the data element definitions. Other questions exist regarding the appropriate unit of analysis for making such a determination. For example, it is unclear if “where the predominant performance of the award will be accomplished” is determined by the amount of time spent in a particular location when carrying out the award or by some other metric such as number of staff deployed or the amount of financial resources expended in a particular location. The standardized definitions for Primary Place of Performance do not address this level of detail and according to OMB staff they have not issued guidance or other resources, such as a FAQ document, to help agencies operationalize this concept in a consistent and comparable way.

Another concern involves how to assign a value for Primary Place of Performance when the activity being described does not readily lend itself to a discrete geospatial location (such as a consulting service provided in many locations) or if it spans multiple locations (such as a road traversing multiple counties or states). One approach that has been previously used for reporting the location of federal spending for road projects on USAspending.gov is to assign the spending to the county or state capitol in the jurisdiction where the majority of the road was constructed. OMB staff told us that they would likely follow such an approach when reporting on Primary Place of Performance using the newly standardized definition in the future. While this may be potentially misleading in some situations, in the absence of a clearly better alternative it is critical that the particular decision rules OMB decides to follow are documented and clearly communicated to agencies providing this data as well as end-users. Figure 2 provides a notional illustration of some of the different places of performance that agencies could report for federally funded road projects based on the current definitions of these data elements.

Despite the potential for multiple interpretations of what should be reported for Primary Place of Performance, OMB staff told us that federal agencies have not raised this as a significant reporting challenge. However, feedback OMB and Treasury received from both federal and nonfederal stakeholders identified a number of concerns with these definitions including the need to more clearly define what is meant by “primary” place of performance and how to interpret the word “performance” for this definition. In responding to this feedback, OMB and Treasury acknowledged the difficulty of addressing stakeholder concerns through a single data element and that in the future, as part of their plans to adopt a more formal data governance structure, they expect to identify and standardize other location-related data elements to address other needs.

The Data Element Definition for Program Activity Adheres to Leading Practices; However, More Guidance Is Needed to Ensure Program-Related Data Are Consistent and Comparable

In some cases OMB and Treasury will need to take additional steps to make data standards consistent and comparable for federal and nonfederal entities. For example, OMB and Treasury standardized the definition of Program Activity as required by the DATA Act and we found that this definition adhered to all 13 ISO leading practices. However, concerns still remain regarding the use of this data element. For example, OMB’s and Treasury’s guidance on Program Activity acknowledges that program activities can change from one year to the next and that Program Activity does not necessarily match “programs” as specified in the GPRA Modernization Act of 2010 or the Catalog of Federal Domestic Assistance. In responding to this guidance, officials at USDA said that when program activities change it is difficult to make comparisons of federal spending over time.

Moreover, USDA officials noted that more guidance is needed to ensure that the public can accurately interpret Program Activity compared to the other common representations of federal programs. In our July 2015 testimony on DATA Act implementation, we reported that OMB and Treasury will need to build on the program activity structure and provide agencies with guidance if they are to meet one of the stated purposes of the DATA Act to link federal contract, loan, and grant spending information to federal programs to enable taxpayers and policy makers to track federal spending more effectively. In that testimony, we made a recommendation that OMB accelerate efforts to develop a federal program inventory to ensure that federal program spending data are provided to the public in a transparent, useful, and timely manner. During the hearing, an OMB official testified that, because the staff that would be involved in working on the program inventories is heavily involved in DATA Act implementation, he would not expect an update of the program inventories to happen before May 2017.

Much remains to be done to effectively implement standard data element definitions across the federal government in a consistent and comparable way for reporting purposes. OMB and Treasury told us that they are making policy decisions and developing guidance to help agencies with implementing data standards. They expect to issue this guidance in spring 2016, and we will review it at that time. Consequently, many issues remain unanswered regarding the extent to which agencies may need to change their policies, processes, and systems in order to report their financial data in compliance with the act. A senior HHS official told us that they have communicated to OMB and Treasury that in the absence of detailed guidance related to the policy, process, and technology changes that accompany the data element definitions, agencies cannot develop effective implementation plans or appropriately commit the necessary resources toward implementing the DATA Act because implementation efforts and timelines are highly dependent on this information. Agencies must begin reporting data using the data definitions established under the DATA Act by 2017. It remains uncertain the extent to which these data will be consistent and comparable if OMB and Treasury do not address concerns with the quality of data definitions.

OMB and Treasury Addressed Initial Challenges with the Technical Schema, but the Lack of Finalized Technical Guidance Could Impede Agency Implementation

The DATA Act calls for OMB and Treasury to establish government-wide data standards, to the extent reasonable and practicable, that produce consistent and comparable data available in machine-readable formats. Treasury has taken the lead in drafting a technical schema intended to standardize the way financial assistance awards, contracts, and other financial data will be collected and reported under the DATA Act. Toward that end, the technical schema describes the standard format for data elements including their description, type, and length. In July 2015, we identified several potential concerns with version 0.2 of the schema, including that the schema might not prevent inconsistent reporting because it allowed alphabetic characters to be entered into a data field that should only accept numeric data. We also noted that the schema did not identify a computer markup language that agencies can use for communicating financial data standards. Identification of such a language provides standards for annotating or tagging information so that data can be transmitted over the Internet and can be readily interpreted by a variety of computer systems.

OMB and Treasury addressed several of the concerns we raised in version 0.6 of the DATA Act schema issued in October 2015. For example, version 0.6 of the schema addressed inconsistencies between machine-readable and human-readable documentation and simplified the schema so that data elements, names, and definitions are consistent across all award types including grants, loans, and contracts. According to Treasury officials, subsequent versions of the schema will include additional information about complex data types and introduce extensible business reporting language (XBRL) formats in preparation for version 1.0. Treasury planned to issue version 1.0 by December 31, 2015, which it said would provide a more stable base to help agencies understand how to map their financial and award information to adhere to DATA Act requirements. However, instead of releasing version 1.0 as planned, they released another interim version—version 0.7. According to Treasury, this version incorporates additional financial data elements and attributes that are intended to support more accurate and detailed financial and budgetary accounting information.

Given the importance of having a largely stable schema to serve as the foundation for developing subsequent technical processes at the agency level, any significant delay in releasing version 1.0 of the schema will likely have consequences for timely implementation of the act. Treasury officials told us they are not prepared to provide a time frame for completion of version 1.0. As previously mentioned, OMB’s and Treasury’s DATA Act Implementation Playbook outlines eight specific steps and timelines for implementing the DATA Act at the agency level. However, in some cases guidance that would help agencies carry out these steps has not been provided in time to coincide with when the agency was expected to carry out key activities outlined in the DATA Act Implementation Playbook. For example, step 3 of the 8-step plan calls for agencies to inventory agency data and associated business processes from February to September 2015 to identify where there are gaps in the data that are collected. OMB and Treasury provided technical tools including a template to help agencies inventory their financial and awards data to identify any gaps that could impede standardization. However, a stable DATA Act schema that specifies the form and content the data should be reported in was not available to agencies to help them fully carry out this step.

Corporation for National and Community Service (CNCS) officials told us that because operational details for how data are to be exchanged have not yet been finalized, the agency has not taken steps to map agency financial and awards data to the schema. Treasury officials told us, that because they are using an iterative approach to technical implementation, they have not finalized an architecture for the collection and dissemination of government-wide data that could provide agencies with a description of the various technology layers, interoperability and structures, and reporting languages that they will be expected to use beginning in May 2017. In the absence of a clear and consistent set of technical specifications, agency technical staff, enterprise resource planning (ERP) vendors, and others tasked with adapting Treasury’s schema to work with the financial and award management environment at individual federal agencies may delay plans to carry out key steps until the schema is finalized. Alternatively, if agencies decide to move ahead and then significant changes are subsequently made to the schema, agencies could incur additional costs to revise their systems and processes to conform to a later version.

In addition to the draft technical schema, Treasury is developing an intermediary service called a “broker” to standardize data formatting and assist reporting agencies in validating their data submissions before they are submitted to Treasury. As part of this effort, Treasury recently completed a limited-use pilot test of the broker service with the Small Business Administration (SBA) to test agency data submissions. Treasury has future plans to develop and test a broker prototype for contracts. The pilot demonstrated a broker prototype that could extract data from SBA’s grant and financial systems, perform data validation, and convert data to the DATA Act schema for submission to Treasury’s database. A Treasury official acknowledged, however, that it may be more difficult for larger or more complex agencies to extract their data and perform these necessary functions.

In September 2015, Treasury posted the limited-use SBA broker prototype on GitHub, a public online collaboration website, so that agencies and the public could begin reviewing the broker prototype. Treasury also made a set of high-level conceptual models available to agencies on MAX.gov to help them understand how they might extract data from their own financial and award systems. Treasury told us that they plan to build and host a centralized broker service, but have not specified a time frame when it will be available. In addition, Treasury is exploring the option to allow agencies to use the Treasury broker service locally to work within their own operational environments. According to these officials, agencies may also choose to work through ERP vendors who could develop commercial products that would be made available to agencies.

However, because the SBA broker prototype was primarily tested on grants, a broker prototype that extracts and validates data from other types of awards, such as contracts and loans, is still not available to agencies. Moreover, little is known about how the prototype would work with other forms of awards, which are often located in different systems and use different definitions. Agencies need this information to begin testing the broker using their own data so they can develop effective strategies for data submission within the time frame—October 2015 to February 2016—prescribed in the DATA Act Implementation Playbook. The prototype tested grants data from SBA’s award system which is already linked to SBA’s financial management system through unique award identifiers. It is not known whether and how the broker prototype would work for a number of agencies that have financial and award systems that are not yet linked. According to a Treasury official, most agencies have not established linkages between their financial and award systems.

Our review of three selected agency implementation plans and interviews with agency officials indicates that agencies are waiting for technical guidance on the broker service so that they can begin to develop plans to extract data from their current systems and map it to the DATA Act schema. For example, CNCS’s implementation plan submitted to OMB in September of 2105 cites the lack of information about the broker as a significant challenge that could impede effective implementation of the data standards and new reporting requirements. As a result of this uncertainty, USDA officials told us that they decided to move ahead with the development of its own broker to compile and validate its data centrally and then forward it on to Treasury. Moreover, USDA officials noted that since much of Treasury’s technical guidance to date has focused on grants and cooperative agreements little is known about how the broker service would work with other financial assistance awards such as loans and insurance programs.

Selected Agencies Have Taken Initial Steps to Implement Data Standards

The three agencies in our review—the Corporation for National and Community Service (CNCS), the Department of Health and Human Services (HHS), and the Department of Agriculture (USDA)—have begun addressing the requirements of the DATA Act by forming DATA Act teams, participating in government-wide deliberations on data standards, developing an inventory of their data, identifying systems containing pertinent data and the associated business practices, and assessing the policy, process, and technology changes that may be needed for successful implementation. In addition to providing guidance in the DATA Act Implementation Playbook, OMB and Treasury have regularly engaged agency officials to address questions and concerns related to implementing data standards. This outreach has included monthly conference calls with agency senior accountable officials (SAO), posted office hours for agencies to obtain feedback on the implementation process and raise OMB’s and Treasury’s awareness regarding specific implementation challenges, and a biweekly digest that is distributed to SAOs to keep agency staff informed about recent and upcoming DATA Act activities. Table 3 provides additional information regarding the status of DATA Act implementation activities for these three agencies.

Conclusions

Once fully and effectively implemented, the DATA Act holds great promise for improving the transparency and accountability of federal spending data by providing consistent, reliable, and complete data on federal spending. In order to fully and effectively implement the DATA Act, the federal government will need to address complex policy and technical issues. Central among these is defining and developing common data elements across multiple reporting areas and standing up the necessary supporting systems and processes to enable reporting of the federal spending data required by the DATA Act. Toward that end, OMB and Treasury have made progress since the act was signed into law in May 2014, including issuing definitions for 57 data elements, developing an 8-step plan and timelines for agencies to follow as they move through the implementation process, and providing a variety of outreach approaches to address agency questions and to obtain feedback from federal and nonfederal stakeholders.

The implementation accomplishments to date exist alongside continued challenges that OMB and Treasury need to address in order to successfully meet the requirements and objectives of the act. Although the majority of the 57 data element definitions generally follow leading practices, we identified limitations with some data element definitons and their documentation that, if not addressed, could lead to inconsistent reporting, and limit the ability to meaningfully aggregate or compare data for these elements across the federal government. Moreover, the standards will be of little value if agencies are not prepared to collect and report quality data in conformance with the standards. Therefore, it is of vital importance that OMB and Treasury provide federal agencies with timely information and support so that they are in a position to effectively implement these standards. We provided OMB and Treasury with input on identified challenges related to the data element definitions and draft technical schema to help ensure these challenges are addressed as implementation progresses. Moreover, as agencies work through the 8- step implementation process, it will be important for OMB and Treasury to provide them with finalized technical guidance that can serve as a foundation for developing the necessary systems and processes for agency implementation. If guidance is not timed to coincide with agencies’ expected milestones for key steps in the implementation process, agencies could incur additional costs as they revise implementation plans to align with later versions of the guidance or could be forced to delay implementation.

Recommendations for Executive Action

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. 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.

Agency Comments and Our Evaluation

We provided a draft of this report to the Director of OMB, the Secretaries of the Treasury, HHS and USDA, and the Chief Executive Officer of CNCS for review and comment. Both OMB and Treasury submitted written comments, which provided additional clarifying information related to our recommendations. OMB’s and Treasury’s written comments are discussed below and reproduced in appendixes IV and V respectively. In addition, OMB, Treasury, CNCS, and HHS provided technical comments, which we incorporated as appropriate, and USDA had no comments.

In his written response, the OMB Controller generally concurred with our first recommendation to provide agencies with additional guidance to address potential clarity, consistency, or quality issues with data element definitions. However, in the discussion of OMB’s efforts to date to expand and improve federal spending transparency, the OMB Controller distinguished between the 11 data elements that were standardized in May 2015 and the remaining 46 data elements that were issued in August 2015. OMB interpreted the DATA Act requirement to standardize data elements as only applying to the 11 data elements, and indicated that the remaining 46 elements were standardized pursuant to the overarching policy goal of improving the consistency of federal spending data on USAspending.gov. OMB stated that the additional 46 data elements provided an opportunity to increase comparability and data quality.

However, both the statutory language and the purposes of the DATA Act support the interpretation that OMB and Treasury were required to establish data standards for award and awardee information in addition to account level information. The DATA Act states that the financial data standards OMB and Treasury are required to establish are to include financial and payment information required to be reported by federal agencies and entities receiving federal funds. Such information reported by entities receiving federal funds is information on awards and awardees, not account-level financial data. The act further provides that the data standards are to include, to the extent reasonable and practical, unique identifiers for federal awards and entities receiving federal awards. However, OMB does not interpret Award Identification Number and Awardee/Recipient Unique Identifier to be among those data elements they are required to standardize pursuant to the DATA Act. Lastly, OMB’s interpretation is inconsistent with Congress’s intent when it passed the DATA Act. As described in the legislative history of the act, Congress sought to address the known data quality issues with award and awardee information that had been reported under FFATA. To accomplish this, data standards for those elements were necessary. Without data standards for award and awardee information, the inconsistent and non-comparable reporting under FFATA that Congress sought to remedy through the DATA Act would continue. For these reasons, we conclude that the requirement in the DATA Act to establish data standards applies not only to account-level information, but also to award and awardee information. This is an important distinction for ensuring that federal agencies are held appropriately accountable for the completeness, quality, and accuracy of the spending data to be reported in the years to come.

In addition to responding to the recommendations made in this report, OMB also addressed the recommendation made in our July 2015 testimony which called on OMB to accelerate efforts to determine how best to merge DATA Act purposes and requirements with requirements under the GPRA Modernization Act of 2010 (GPRAMA) to produce a federal program inventory. In response to this recommendation, the OMB Controller noted that OMB promulgated guidance in OMB Circular A-11, Sections 82 and 83, requiring agencies to start submitting object class and program activity information from their accounting systems to OMB. We recognize that requiring agencies to submit data on object class and program activity may be a step toward meeting the requirement of the DATA Act to report this information and may contribute toward the broader effort of developing a federal program inventory as required by GPRAMA. However, much still remains to be done in order to produce such an inventory. We continue to believe, as we previously recommended, that OMB should accelerate those efforts and we will continue to monitor progress in meeting this statutory requirement.

Regarding our recommendation to align the release of finalized technical guidance to the implementation timelines specified in the DATA Act Implementation Playbook, OMB deferred matters of technical operationalization to Treasury, which has program responsibility for technical implementation.

In their written response, Treasury officials deferred our first recommendation to provide agencies with additional guidance to address potential clarity, consistency, or quality issues with data element definitions to OMB. Regarding our second recommendation to align the release of finalized technical guidance to the implementation timelines specified in the DATA Act Implementation Playbook, Treasury officials generally concurred with our recommendation, noting that they recognize the importance of providing agencies with timely technical guidance and reporting submission specifications.

We are sending copies of this report to the heads of the Departments of Agriculture, Health and Human Services, Treasury, OMB, and the Corporation for National and Community Service, as well as interested congressional committees and other interested parties. This report will also be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff has any questions about this report, please contact me at (202) 512-6806 or sagerm@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 VI.

Appendix I: Objectives, Scope, and Methodology

This report (1) identifies steps taken by the Office of Management and Budget (OMB) and the Department of Treasury (Treasury) to establish government-wide data element definitions and the extent to which those definitions are consistent with leading practices or face challenges that could affect data quality; (2) reviews efforts by OMB and Treasury to provide agencies with technical implementation guidance to standardize how data are collected and reported and related challenges; and (3) examines the status of selected federal agencies’ progress in meeting DATA Act requirements. This review is a part of an ongoing effort to provide interim reports on the progress being made in the implementation of the DATA Act, while also meeting our audit reporting requirements mandated by the act.

For the first objective, we reviewed our past work that raised concerns about the quality of federal spending data on USAspending.gov to inform our review of OMB’s and Treasury’s efforts to establish data standards. We analyzed the definitions of the 57 data elements issued May 8, 2015 through August 31, 2015, and assessed the extent to which the data definitions are consistent with DATA Act requirements and leading practices from standards set by the International Organization for Standardization (ISO).

To assess the extent to which the data standards are consistent with ISO standards, we had two analysts independently rate each of the 57 data element definitions against all 13 ISO leading practices and determine whether the data element (1) met the ISO leading practice, (2) did not meet the ISO leading practice, (3) partially met the ISO leading practice, or (4) whether the ISO leading practice was not applicable to the particular data element definition. When the two raters independently came to the same rating for a particular leading practice and data element definition, the raters were considered to be in concurrence and the agreed upon rating was carried forward as the assessment of record. After the first round of assessments, the initial raters were in concurrence on 630 of 741 necessary assessments. When the two raters independently came to different ratings for a particular leading practice and data element definition, a third rater independently assessed those data element definitions and leading practices to attempt to reach concurrence. This was necessary in 111 cases. When the third rater independently came to the same rating as one of the initial two raters, that rating was carried forward as the assessment of record. After this second round of assessments, the raters were in concurrence on 727 of 741 necessary assessments. When the third rater came to a different rating as both of the initial two raters for a particular leading practice and data element definition, the three raters met to discuss their application of the leading practice to the data element definition and come to consensus on a final assessment of record. After these discussions, the raters were in concurrence on 741 of 741 necessary assessments.

For data element definitions related to federal budget terms, we supplemented our analysis with a legal review to ensure assessments were both accurate and complete. For purposes of reporting, when the final assessment of record was that a given data element definition met or partially met the ISO leading practice or that the ISO leading practice was not applicable, the data element definition was considered to adhere to the given leading practice. For the purposes of aggregating our assessments, we considered a “partial” response to be a “yes” because the ISO standards represented leading practices and not firm requirements for OMB and Treasury to follow. Therefore, we erred on the side of giving the agencies credit for the contents of their definitions meeting parts of the leading practice. When the assessment of record was “no” the data element definition was considered as not adhering to the given leading practice.

For the second objective assessing OMB’s and Treasury’s development of a technical schema that specifies the format, structure, tagging, and transmission of each data element to allow consistency and comparability, we consulted the U.S. Digital Services Playbook and we reviewed and analyzed differences between version 0.2, version 0.5, and version 0.6 of the schema. We reviewed applicable agency guidance and documentation related to the data standards and technical schema on OMB’s and Treasury’s websites. We also interviewed knowledgeable agency officials about their standards-setting and technical schema development processes.

For the third objective, we selected three agencies for review—the Department of Health and Human Services, the Department of Agriculture, and the Corporation for National and Community Service. Using a three-step selection process, we looked for agencies that met varying conditions: (1) compliance with requirements for federal financial management systems; (2) representation across multiple lines of business—grants, loans, and contracts; and (3) status as a Federal Shared Service Provider for financial management. Table 4 shows each selected agency in relation to these criteria.

Although the results from our review of these three agencies are not generalizable to all agencies, they are designed to illustrate a range of conditions under which agencies are implementing the act.

We assessed whether the selected agencies submitted their implementation plans and identified a senior accountable official (SAO) to report on progress. We also reviewed the implementation plans and related project plans and interviewed agency DATA Act team members for their assessment of implementation progress, including what controls are in place to ensure data quality, the challenges they have encountered thus far, and the extent to which identified challenges could impede timely and effective implementation.

We conducted this performance audit from May 2015 to January 2016 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 on our audit objectives.

Appendix II: Status of GAO’s Open Recommendations and Matters for Congressional Consideration Related to the DATA Act

Recommendation/matter for congressional consideration 1. To improve the accuracy, completeness, and

timeliness of all data submissions to the Office of Management and Budget’s (OMB) USAspending.gov website, the Director of OMB should revise guidance to federal agencies on reporting federal awards to clarify (1) the requirement that award titles describe the award’s purpose; and (2) requirements for validating and documenting agency awards data submitted by federal agencies.

Implementation status Closed—not implemented. Provisions of the Digital Accountability and Transparency Act of 2014 could address this recommendation, but implementation will take several years.

2. To improve the accuracy, completeness, and timeliness of all data submissions to OMB’s USAspending.gov website, the Director of OMB should include information on the city where work is performed in OMB’s public reporting of the completeness of agency data submissions.

Closed—not implemented. OMB no longer uses the reporting mechanism discussed in the recommendation.

Open. As a result of passage of the Digital Accountability and Transparency Act (DATA Act) in May 2014, OMB is working with the Department of the Treasury (Treasury) and other members of the Government Accountability and Transparency Board to develop a long-term strategy to implement key transparency reforms including government-wide data standards. We will continue to monitor the progress of their efforts to implement key provisions of the act. Open. OMB and Treasury are working to implement the DATA Act, which includes several provisions that could address our recommendations once fully implemented. data submissions to the USAspending.gov website, the Director of OMB, in collaboration with Treasury’s Fiscal Service, should clarify guidance on (1) agency responsibilities for reporting awards funded by non-annual appropriations; (2) the applicability of USAspending.gov reporting requirements to non-classified awards associated with intelligence operations; (3) the requirement that award titles describe the award’s purpose (consistent with our prior recommendation); and (4) agency maintenance of authoritative records adequate to verify the accuracy of required data reported for use by USAspending.gov.

Report

Open. As part of their DATA Act implementation efforts, OMB and Treasury have outlined a process for agencies to identify authoritative systems to validate agency spending information. In addition, the inspector general community is working on standard audit methodologies to verify the accuracy and completeness of agency reporting. Implementation of these efforts is planned to begin in fiscal year 2016. Open. In commenting on a draft of this statement in July 2015, OMB staff stated that they neither agreed nor disagreed with this recommendation. Testifying before two subcommittees of the House Oversight and Government Reform Committee on July 29, 2015, OMB’s Acting Deputy Director for Management and Controller stated that the agency planned to address the issue of identifying “programs” for the purposes of DATA Act reporting but that such efforts would likely not start until sometime in fiscal year 2016, and would not be completed until after May 2017. Open. In an August 31, 2015, whitepaper published on their DATA Act collaboration website, OMB and Treasury stated their intent to address this recommendation by working to establish in fiscal year 2016 a formal, long-term governance process and structure for future data standards maintenance. This governance structure would be the forum to review recommendations for new data elements to be reported to USAspending.gov and for additional data standards to be adopted moving forward. Open. In commenting on a draft of the statement in July 2015, OMB staff stated that they neither agreed nor disagreed with this recommendation. addressed as implementation efforts continue, the Director of OMB, in collaboration with the Secretary of the Treasury, should build on existing efforts and put in place policies and procedures to foster ongoing and effective two-way dialogue with stakeholders including timely and substantive responses to feedback received on the Federal Spending Transparency GitHub website.

Recommendation/matter for congressional consideration 1. To capitalize on the opportunity created by the DATA Act, the Secretary of the Treasury should reconsider whether certain assets—especially information and documentation such as memoranda of understanding (MOUs) that would help transfer the knowledge gained through the operation of the Recovery Operations Center— could be worth transferring to the Do Not Pay Center Business Center to assist in its mission to reduce improper payments. Additionally, the Secretary should document the decision on whether Treasury transfers additional information and documentation and what factors were considered in this decision.

Open. Treasury concurred with our recommendation that it should consider additional knowledge transfers from the Recovery Operations Center to assist in the Do Not Pay Center Business Center’s mission to reduce improper payments and will document its rationale and final decision in this regard..

Matter for Congressional Consideration: 1. To help preserve a proven resource supporting the oversight community’s analytic capabilities, Congress may wish to consider directing the Council of the Inspectors General on Integrity and Efficiency (CIGIE) to develop a legislative proposal to reconstitute the essential capabilities of the Recovery Operations Center to help ensure federal spending accountability. The proposal should identify a range of options at varying scales for the cost of analytic tools, personnel, and necessary funding, as well as any additional authority CIGIE may need to ensure such enduring, robust analytical and investigative capability for the oversight community.

Open.

Appendix III: Definitions of Issued Data Elements

This appendix lists the data elements and their definitions broken out by type, as issued by the Office of Management and Budget (OMB) and the Department of Treasury (Treasury) on May 8, 2015 and August 31, 2015.

Account Level Data Standards: These data elements describe the appropriations accounts from which agencies fund Federal awards.

Data Definition The basic unit of an appropriation generally reflecting each unnumbered paragraph in an appropriation act. An appropriation account typically encompasses a number of activities or projects and may be subject to restrictions or conditions applicable to only the account, the appropriation act, titles within an appropriation act, other appropriation acts, or the Government as a whole. An appropriations account is represented by a TAFS created by Treasury in consultation with OMB (defined in OMB Circular A-11).

A provision of law (not necessarily in an appropriations act) authorizing an account to incur obligations and to make outlays for a given purpose. Usually, but not always, an appropriation provides budget authority (defined in OMB Circular A-11).

Categories in a classification system that presents obligations by the items or services purchased by the Federal Government. Each specific object class is defined in OMB Circular A-11 § 83.6 (defined in OMB Circular A-11).

Obligation means a legally binding agreement that will result in outlays, immediately or in the future. When you place an order, sign a contract, award a grant, purchase a service, or take other actions that require the Government to make payments to the public or from one Government account to another, you incur an obligation. It is a violation of the Antideficiency Act (31 U.S.C. § 1341(a)) to involve the Federal Government in a contract or obligation for payment of money before an appropriation is made, unless authorized by law. This means you cannot incur obligations in a vacuum; you incur an obligation against budget authority in a Treasury account that belongs to your agency. It is a violation of the Antideficiency Act to incur an obligation in an amount greater than the amount available in the Treasury account that is available. This means that the account must have budget authority sufficient to cover the total of such obligations at the time the obligation is incurred. In addition, the obligation you incur must conform to other applicable provisions of law, and you must be able to support the amounts reported by the documentary evidence required by 31 U.S.C. § 1501. Moreover, you are required to maintain certifications and records showing that the amounts have been obligated (31 U.S.C. § 1108). Additional detail is provided in Circular A‐11.

New borrowing authority, contract authority, and spending authority from offsetting collections provided by Congress in an appropriations act or other legislation, or unobligated balances of budgetary resources made available in previous legislation, to incur obligations and to make outlays (defined in OMB Circular A-11).

Payments made to liquidate an obligation (other than the repayment of debt principal or other disbursements that are “means of financing” transactions). Outlays generally are equal to cash disbursements but also are recorded for cash-equivalent transactions, such as the issuance of debentures to pay insurance claims, and in a few cases are recorded on an accrual basis such as interest on public issues of the public debt. Outlays are the measure of Government spending (defined in OMB Circular A-11).

A specific activity or project as listed in the program and financing schedules of the annual budget of the United States Government (defined in OMB Circular A-11).

Data Definition Treasury Account Symbol: The account identification codes assigned by the Department of the Treasury to individual appropriation, receipt, or other fund accounts. All financial transactions of the Federal Government are classified by TAS for reporting to the Department of the Treasury and the Office of Management and Budget (defined in OMB Circular A-11). Treasury Appropriation Fund Symbol: The components of a Treasury Account Symbol – allocation agency, agency, main account, period of availability and availability type – that directly correspond to an appropriations account established by Congress (defined in OMB Circular A-11).

Unobligated balance means the cumulative amount of budget authority that remains available for obligation under law in unexpired accounts at a point in time. The term “expired balances available for adjustment only” refers to unobligated amounts in expired accounts. Additional detail is provided in Circular A‐11.

Award Characteristic Data Standards: These data elements describe characteristics that apply to specific financial assistance and/or procurement awards Data Element Action Date

Data Definition The date the action being reported was issued / signed by the Government or a binding agreement was reached.

A brief description of the purpose of the award.

Award Identification (ID) Number The unique identifier of the specific award being reported, i.e. Federal Award Identification Number (FAIN) for financial assistance and Procurement Instrument Identifier (PIID) for procurement.

The identifier of an action being reported that indicates the specific subsequent change to the initial award.

Description (and corresponding code) that provides information to distinguish type of contract, grant, or loan and provides the user with more granularity into the method of delivery of the outcomes.

A collection of indicators of different types of recipients based on socio-economic status and organization / business areas.

The number assigned to a Federal area of work in the Catalog of Federal Domestic Assistance.

The title of the area of work under which the Federal award was funded in the Catalog of Federal Domestic Assistance.

The identifier that represents the North American Industrial Classification System Code assigned to the solicitation and resulting award identifying the industry in which the contract requirements are normally performed.

The title associated with the NAICS Code.

Data Definition For procurement, the date on which, for the award referred to by the action being reported, no additional orders referring to it may be placed. This date applies only to procurement indefinite delivery vehicles (such as indefinite delivery contracts or blanket purchase agreements). Administrative actions related to this award may continue to occur after this date. The period of performance end dates for procurement orders issued under the indefinite delivery vehicle may extend beyond this date.

The identifier of the procurement award under which the specific award is issued, such as a Federal Supply Schedule. This data element currently applies to procurement actions only.

The current date on which, for the award referred to by the action being reported, awardee effort completes or the award is otherwise ended. Administrative actions related to this award may continue to occur after this date. This date does not apply to procurement indefinite delivery vehicles under which definitive orders may be awarded.

For procurement, the date on which, for the award referred to by the action being reported if all potential pre-determined or pre-negotiated options were exercised, awardee effort is completed or the award is otherwise ended. Administrative actions related to this award may continue to occur after this date. This date does not apply to procurement indefinite delivery vehicles under which definitive orders may be awarded.

Period of Performance Start Date The date on which, for the award referred to by the action being reported, awardee effort begins or the award is otherwise effective.

The address where the predominant performance of the award will be accomplished. The address is made up of six components: Address Lines 1 and 2, City, County, State Code, and ZIP+4 or Postal Code.

U.S. congressional district where the predominant performance of the award will be accomplished. This data element will be derived from the Primary Place of Performance Address.

Country code where the predominant performance of the award will be accomplished.

Name of the country represented by the country code where the predominant performance of the award will be accomplished.

Record Type Award Amount Data Standards: These data elements describe characteristics that apply to amount information for financial assistance and/or procurement awards. Data Element Amount of Award

Code indicating whether an action is an individual transaction or aggregated.

Data Definition The cumulative amount obligated by the Federal Government for an award, which is calculated by USAspending.gov or a successor site. For procurement and financial assistance awards except loans, this is the sum of Federal Action Obligations. For loans or loan guarantees, this is the Original Subsidy Cost.

For procurement, the total amount obligated to date on a contract, including the base and exercised options.

Amount of Federal Government’s obligation, de-obligation, or liability, in dollars, for an award transaction.

For financial assistance, the amount of the award funded by a non-Federal source(s), in dollars. Program Income (as defined in 2 C.F.R. § 200.80) is not included until such time that Program Income is generated and credited to the agreement.

For procurement, the total amount that could be obligated on a contract, if the base and all options are exercised.

Awardee and Recipient Entity Data Standards: These data elements describe the recipients/awardees of Federal funds Data Element Awardee/Recipient Legal Entity Name

Data Definition The name of the awardee or recipient that relates to the unique identifier. For U.S. based companies, this name is what the business ordinarily files in formation documents with individual states (when required).

The unique identification number for an awardee or recipient. Currently the identifier is the 9-digit number assigned by Dun & Bradstreet referred to as the DUNS® number.

First Name: The first name of an individual identified as one of the five most highly compensated “Executives.” “Executive” means officers, managing partners, or any other employees in management positions. Middle Initial: The middle initial of an individual identified as one of the five most highly compensated “Executives.” “Executive” means officers, managing partners, or any other employees in management positions. Last Name: The last name of an individual identified as one of the five most highly compensated “Executives.” “Executive” means officers, managing partners, or any other employees in management positions.

The cash and noncash dollar value earned by the one of the five most highly compensated “Executives” during the awardee’s preceding fiscal year and includes the following (for more information see 17 C.F.R. § 229.402(c)(2)): salary and bonuses, awards of stock, stock options, and stock appreciation rights, earnings for services under non-equity incentive plans, change in pension value, above-market earnings on deferred compensation which is not tax qualified, and other compensation.

The awardee or recipient’s legal business address where the office represented by the Unique Entity Identifier (as registered in the System for Award Management) is located. In most cases, this should match what the entity has filed with the State in its organizational documents, if required. The address is made up of five components: Address Lines 1 and 2, City, State Code, and ZIP+4 or Postal Code.

Legal Entity Congressional District The congressional district in which the awardee or recipient is located. This is not a required data element for non-U.S. addresses.

Code for the country in which the awardee or recipient is located, using the ISO 3166-1 Alpha-3 GENC Profile, and not the codes listed for those territories and possessions of the United States already identified as “states.”

The name corresponding to the Country Code.

Ultimate Parent Legal Entity Name The name of the ultimate parent of the awardee or recipient. Currently, the name is from the global parent DUNS® number.

The unique identification number for the ultimate parent of an awardee or recipient. Currently the identifier is the 9-digit number maintained by Dun & Bradstreet as the global parent DUNS® number.

Awarding Entity Data Standards: These data elements describe the characteristics of the entity that made the award. Data Element Awarding Agency Code

Data Definition A department or establishment of the Government as used in the Treasury Account Fund Symbol (TAFS).

The name associated with a department or establishment of the Government as used in the Treasury Account Fund Symbol (TAFS).

Identifier of the level n organization that awarded, executed or is otherwise responsible for the transaction.

Name of the level n organization that awarded, executed or is otherwise responsible for the transaction.

Identifier of the level 2 organization that awarded, executed or is otherwise responsible for the transaction.

Name of the level 2 organization that awarded, executed or is otherwise responsible for the transaction.

Funding Entity Data Standards: These data elements describe the characteristics of the entity that provided the funding for an award. Data Element Funding Agency Code

Data Definition The 3-digit CGAC agency code of the department or establishment of the Government that provided the preponderance of the funds for an award and/or individual transactions related to an award.

Name of the department or establishment of the Government that provided the preponderance of the funds for an award and/or individual transactions related to an award.

Identifier of the level n organization that provided the preponderance of the funds obligated by this transaction.

Name of the level n organization that provided the preponderance of the funds obligated by this transaction.

Identifier of the level 2 organization that provided the preponderance of the funds obligated by this transaction.

Name of the level 2 organization that provided the preponderance of the funds obligated by this transaction.

Appendix IV: Comments from the Office of Management and Budget

Appendix V: Comments from the Department of Treasury

Appendix VI: Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, J. Christopher Mihm (Managing Director), Peter Del Toro (Assistant Director), Kathleen Drennan (analyst- in-charge), Shirley Hwang, Jason Lyuke, Kiran Sreepada and David Watsula made major contributions to this report. Other key contributors include Shari Brewster; Mark Canter; Jenny Chanley; Robert Gebhart; Charles Jones; Lauren Kirkpatrick; Michael LaForge; Donna Miller; Laura Pacheco; Carl Ramirez; Paula Rascona; Andrew J. Stephens; James Sweetman, Jr.; and Carroll Warfield, Jr. Additional members of GAO’s DATA Act Working Group also contributed to the development of this report.