Data Transparency: Oversight Needed to Address Underreporting and Inconsistencies on Federal Award Website
Released: 2014-08-01T00:00:00

Letter

Background

FFATA as amended by the Government Funding Transparency Act of 2008, gave OMB responsibility for ensuring the existence and operation of a website that captures specific information on federal awards (e.g. contracts, loans and grants). The website is to promote transparency in government spending by providing the public with the ability to track where and how federal funds are spent. Agenciesspecific information on awards made in fiscal year 2007 and later along with other relevant information specified by OMB, and awards were to be added to the site within 30 days after the award was made. Further, agency financial award reporting is limited by several exemptions provided by FFATA and OMB guidance, including exemptions for reporting of transactions made to individuals, those under $25,000, and any containing classified information. Table 1 lists and describes the required data elements.

Sources of Data on USASpending.gov

The information displayed on USASpending.gov is derived from several sources:

Contract data are imported from the Federal Procurement Data System-Next Generation (FPDS-NG), which collects information on contract actions. GSA, with guidance from OMB’s Office of Federal Procurement Policy, established and administers this system. Since 1980, FPDS-NG and its predecessor have been the primary contracting databases used government-wide. Federal agencies are responsible for ensuring that the information reported in this database is complete and accurate. Additionally, FPDS-NG pre-populates core vendor data using the System for Award Management (SAM). SAM is the primary database for information on potential government business partners in which those wishing to do business with the federal government must register.

Data on financial assistance awards (e.g., grants) are received from reports submitted by agencies in a file format called Federal Assistance Award Data System PLUS (FAADS+). To report information on financial assistance awards to USASpending.gov, OMB guidance requires agencies to submit FAADS+ files directly through the USASpending.gov web submission tool, the Data Submission and Validation Tool, maintained and operated by GSA. The Data Submission and Validation Tool applies data validation checks to 32 data fields. For example, the recipient name must be non-blank and must contain the value “MULTIPLE RECIPIENTS” for awards aggregated at the county level. The tool will reject individual records that contain an error or entire submissions if more than 10 percent of the records in the submission contain errors.

The FFATA Subaward Reporting System (FSRS) provides data on first-tier subawards. and/or subawardee executive compensation information through FSRS. The subawardee provides to the prime awardee all information required for such reporting. This includes subawardee entity information, subawardee unique identifier and relevant executive compensation data, if applicable. Additionally, FSRS pre-populates data using FPDS-NG, SAM, and USASpending.gov, where applicable.

OMB, Memorandum for Senior Accountable Officials: Open Government Directive – Federal Spending Transparency and Subaward and Compensation Data Reporting (Washington, D.C.: Aug. 27, 2010).

In addition, USASpending.gov uses other data sources to supplement and validate agency-supplied data. These sources include:

CFDA—CFDA is a government-wide compendium of federal programs, projects, services, and activities that provide assistance or benefits to the American public, and is the authoritative source for CFDA program numbers. This database is used to validate CFDA numbers provided by agencies.

Dun and Bradstreet—This commercial entity maintains a repository of unique identifiers and is used to validate unique identifiers provided by agencies and to acquire the parent entity unique identifier based on linkage information at the time of the award.

SAM—Information in SAM is used to pre-populate specific contractual information contained in FPDS-NG based on the unique identifier submitted by an agency. Among other things, SAM populates the entity name and address (street, city, state, congressional district, zip code, and country). If a subawardee is registered in SAM, executive compensation and other subawardee information is pre-populated in FSRS prior to the prime awardee’s reporting.

OMB Has Issued Guidance for Reporting Award Information

OMB issued a series of guidance documents to facilitate accurate reporting of information to the website. For example, OMB guidance requires agencies to increase efforts to improve data quality by outlining high-level reporting requirements, focusing primarily on validation of unique identifiers for recipients, collection of program source data, and formatting of assistance data prior to submission.

OMB guidance further requires agencies to designate a high-level senior official to be accountable for information on USASpending.gov and requires agencies to submit a quarterly report on their progress toward improving data quality. In June 2013, OMB issued a memorandum requiring each federal agency to assign financial assistance award identification numbers unique within the federal agency and to identify and implement a process to compare and validate website funding information with data in the agency’s financial system. Based on this validation process, each agency is to report to OMB the accuracy rate of its website data on a quarterly basis.

OMB guidance also outlines the reporting requirements on first-tier subawards and executive compensation of awardees, focusing on reporting requirements related to federal grants and cooperative agreements. Detailed reporting requirements related to federal contracts are located in the Federal Acquisition Regulation. Among the specific requirements described in OMB’s guidance, prime awardees are to report first-tier subawards and executive compensation associated with new federal contracts and grants as of October 1, 2010, and register in SAM. For contracts, agencies shall include these requirements in all new contracts. For assistance awards, agencies shall include these requirements in each program announcement, regulation, or other issuance containing instructions for the applicant. The agency is not required to review data for which it would not normally have supporting information, such as the executive compensation information.

To provide maximum transparency to the public in the use of all federal funds, OMB directs agencies to report awards that would otherwise be exempt from reporting–specifically, those under $25,000 and awards to individuals—as an aggregated amount, where possible. An aggregated record is created by taking a group of similar records and tallying the dollars based on a specific set of data fields in order to create one summary, or aggregated, record. Aggregated records are to be reported as follows:

Transactions under $25,000—Agencies should submit information under $25,000 at a transaction level. If necessary, agencies may report these as county-level aggregate amounts.

Payments to individuals—Agencies should not report payments to individuals at a transaction level, to protect their privacy. All payments to individuals should be reported as an aggregated amount.

The transaction information submitted in FAADS+ files usually contains data in each field, except where the submitting agency is unable to provide those data. As a general principle, OMB guidance calls for agencies to provide as much information as possible on their aggregate records. However, OMB guidance allows the exclusion of certain data elements, since data for numerous transactions are summarized into one record.

Responsibility for USASpending.gov Operations Will Be Transferring to Treasury

Prior to 2014, GSA was responsible for operating and maintaining the USASpending.gov website in accordance with OMB guidance. In February 2014 OMB announced the transfer of those responsibilities to Treasury’s Fiscal Service. Treasury also received funding in the Consolidated Appropriations Act 2014, for website maintenance, improvements to the site’s functionality and usability, and data standardization efforts.

As of May 2014, Treasury had not yet taken on operational responsibility of the website. According to the Assistant Commissioner for Government- wide Accounting at the Fiscal Service, Treasury has begun developing a plan for transferring operational responsibility from GSA to Treasury.

Prior GAO Reports Recommended Improvements to Federal Award Data

In prior audits, we have looked at several areas which impact the reliability of USASpending.gov data. Since 2003, we have issued several reports and offered testimony on data reliability issues associated with FPDS-NG and its predecessor, FPDS. Our reviews of contract award data in these systems have revealed inaccurate and incomplete reporting. To help improve data reliability in FPDS-NG, we recommended that OMB work with agencies to implement systems for contract writing that connect directly to FPDS-NG and provide confirmation of agencies’ review and verification of the accuracy and completeness of their data in FPDS-NG. We also recommended that OMB develop a plan to improve the system’s ease of use and access to data for government-wide reporting needs. In response to our recommendations for improving the accuracy and timeliness of contract award data, OMB issued a memorandum in August 2004 directing agencies to ensure that their contract writing systems could electronically transfer information directly to FPDS-NG. In March 2007, OMB issued a memorandum requiring agencies to regularly certify the accuracy and completeness of its information to GSA. In November 2007, May 2008, and June 2009, OMB issued additional guidance to agencies that addressed improvements in data quality.

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

USASpending.gov website, we recommended, among other things, that the Director of OMB revise guidance to federal agencies on reporting federal awards to clarify the requirement that award titles describe the award’s purpose and requirements for validating and documenting agency award data submitted by federal agencies; and include information on the city where work is performed in OMB’s public reporting of the completeness of agency data submissions. Although OMB generally agreed with our findings and recommendations, it has not yet implemented our recommendations to clarify guidance or include performance information.

GAO, Federal Data Transparency: Opportunities Remain to Incorporate Lessons Learned as Availability of Spending Data Increases, GAO-13-758 (Washington, D.C.; Sept. 12, 2013). with the Government Accountability and Transparency Board, has begun taking steps to obtain stakeholder input as improvements to collecting spending data are developed.

Agencies Generally Reported Contracts, but Many Assistance Programs Were Not Reported

Although agencies generally reported information for contracts to USASpending.gov, they did not properly report information on assistance awards, totaling nearly $619 billion. With few exceptions, FFATA and supplemental OMB guidance require agencies to report spending information on federal awards to USASpending.gov. We found that agencies generally reported information on contracts but did not report timely assistance information, leading to underreporting of nearly $619 billion for awards made in fiscal year 2012. Many of those awards were subsequently reported by agencies. One agency, the Millennium Challenge Corporation, reported an ongoing inability to report its awards because its recipients are foreign governments or non-governmental organizations. However, OMB’s guidance describes how to report foreign In June 2013, OMB assistance and other agencies report such awards.issued a memorandum directing agencies to establish procedures to ensure that financial data reported on USASpending.gov is consistent with agency financial records. If properly implemented, these procedures could better ensure that agencies fully report future assistance awards.

Most Agencies Reported Spending Data on Contracts

According to FFATA and OMB guidance, information on contracts made with funds appropriated in fiscal year 2007 and later is to be reported by agencies and made available on USASpending.gov. Of the 37 agencies with budget authority of at least $400 million each in fiscal year 2012, the website includes information on at least one contract awarded by 33 of the agencies.

The USASpending.gov website states that expenditures made with non- appropriated funds are not to be reported. Of the four agencies that did not report contractual information, officials from three stated that their contracts are awarded using funds that are available outside of annual appropriations and therefore considered to be non-appropriated and exempt from reporting. However, agency funding can be appropriated by means other than through an annual appropriations act. For example, a permanent appropriation makes funds available on the basis of previously enacted legislation, such as statutory authorization for self-financing through offsetting collections. Each of these three agencies receives a form of appropriation other than through an annual appropriations act, and this is used to fund their contract awards. Because the USASpending.gov website does not define what constitutes non- appropriated funds, it is unclear whether agencies making awards using funds received on the basis of an appropriation other than an annual appropriation are required to report.

The fourth agency—the Central Intelligence Agency—stated that it did not report contracts due to concerns about the ability of someone to use them to infer agency requirements. Specifically, a liaison official from the Central Intelligence Agency stated that it does not report information on classified contracts to USASpending.gov. This practice is consistent with FFATA, which does not require the disclosure of classified information. The official added that the agency also does not report unclassified contract information because of the risk that an individual could use it, along with other publicly available information to develop a picture of Central Intelligence Agency requirements (e.g., key information about the agency). Therefore, the Central Intelligence Agency restricts the release of both classified and unclassified information, including information on contracts, in order to protect intelligence sources and methods. However, OMB’s guidance does not clearly exempt agencies from reporting unclassified contract information that they believe must not be disclosed.

Without clear OMB guidance to define the type of appropriated funds exempt from reporting or how to report information on unclassified awards that raise concerns related to intelligence operations, it is unclear whether justifications from each of the four agencies for not reporting its contracts are appropriate.

Hundreds of Billions of Dollars in 2012 Awards Were Not Properly Reported

As with contracts, information on assistance awards made using funds appropriated in fiscal year 2007 and later is to be reported by agencies and made available on USASpending.gov. While agencies are to report the amount of federal funding awarded for most types of assistance programs, OMB guidance requires that agencies report a face value and long-term subsidy costs for loan programs. OMB also calls for agencies to report awards under $25,000 and awards to individuals as an aggregated amount, where possible.

Information on USASpending.gov Was Largely Inconsistent with Agency Records or Unverifiable

Among fiscal year 2012 awards reported on USASpending.gov, most contained information that was not fully consistent with agency records or was unverifiable due to gaps in agency records. Award data displayed on the website consists, in part, of 21 data elements required by FFATA. According to OMB guidance, the goal of the website was to have 100 percent of award data be accurate by the end of fourth quarter for fiscal year 2011, meaning the information is the same as (consistent with) the information contained in agency records or other authoritative sources.

However, the USASpending.gov data for fiscal year 2012 infrequently approached OMB’s goals for data quality. Specifically, of our sample of 385 awards, 4 percent contained information that was fully consistent with agency records for all 21 data elements. Projecting to the entire set of fiscal year 2012 awards, we estimate that only 2 percent to 7 percent of awards contain information that is fully consistent with agency records for all 21 data elements, and thus is also consistent with OMB’s goal.

Further, across all awards, only one of the data elements we tested met our criterion for significant consistency with agency records, while eight did not. We considered a data element to be significantly consistent if we estimated that for at least 90% of fiscal year 2012 awards, the information displayed on USASpending.gov were consistent with the information in the awarding agency’s records. Conversely, we considered an element significantly inconsistent if we estimated that in more than 10 percent of awards, the USASpending.gov information for that element and the We could not underlying agency records were not in agreement. determine whether the remaining data elements were significantly consistent or inconsistent, in large part because of incomplete or inadequate agency records.

One Data Element Had Information that Was Significantly Consistent with Information in Agency Records

We define a variable as “significantly” inconsistent for USASpending.gov if the lower bound of the 95 percent confidence interval for the estimated percent of records with inconsistent data is greater than 10 percent. We define a variable as “significantly” consistent for USASpending.gov if the lower bound of the 95 percent confidence interval for the estimated percent of records with consistent data is greater than 90 percent. was almost always consistent with the underlying information in agency records.

Eight Data Elements Had Information That Was Significantly Inconsistent with Information in Agency Records

While only one data element contained information that was significantly consistent with agency records, eight were significantly inconsistent for fiscal year 2012 awards, with estimated rates on inconsistency of at least 10 percent (see table 4).

Award title descriptive of the purpose of each funding action: The title contained inconsistent information for 24 percent through 33 percent of awards. Of these, most were inconsistent with FFATA’s requirement that an award title be descriptive of the purpose of the award. Instead, many titles consisted of shorthand descriptions, acronyms, or other language that did not convey intent for the funding. For example, according to an official in the Defense Procurement and Acquisition Policy group, personnel often use terminology that is only understood by other agency officials, without considering whether it can be understood by the general public. For example, the award title for one award at the Department of Defense was reported as “Cca.” The associated delivery order indicated that the purpose of the award was to analyze the repair cost of several items including “Cca,” which refers to a “circuit card assembly,” and comprises less than a quarter of the total cost of the award.

Recipient street and zip code: The recipient street element contained inconsistent information for 13 percent through 21 percent of awards; and the recipient zip code was inconsistent for 10 percent through 18 percent. For example, for an Air Force award to BAE Systems Technology Solutions & Services Inc., the vendor’s address was reported on USASpending.gov as 1601 Research Blvd in zip code 20850-3173, while the contract documentation showed the vendor to be located at 520 Gaither Road in zip code 20850-6198. In another example, a Department of Education award issued to one component of the SLM Corporation was reported on USASpending.gov with an address for a different component of the corporation.

Recipient congressional district: The recipient congressional district contained inconsistent information for 12 percent through 19 percent of awards. This included cases in which the website displayed an incorrect congressional district, omitted the district, or erroneously displayed a district for a foreign awardee.

Principal place of performance city: The city of performance contained inconsistent information for 22 percent through 31 percent of awards. This included cases in which agencies reported the recipient’s business address as the place of performance, even when the work funded by an award was performed in another location. In other cases, agencies reported a county instead of the specific city for some awards. For example, several awards from the Federal Highway Administration reported the county name on USASpending.gov instead of the city as the primary locator.

Principal place of performance congressional district: The congressional district of performance contained inconsistent information for 20 percent through 28 percent of awards. Many of these inconsistencies were because the website displayed “zz” for this element.

Principal place of performance country: The information on the country of performance contained inconsistent information for

29 percent through 38 percent of awards. Nearly all of these cases were assistance awards aggregated at the county level, for which the field was reported by the awarding agency but not displayed on the website.

Unique identifier for the parent entity: The Parent DUNS number, used to uniquely identify parent entities (if applicable) doing business with the government, contained inconsistent information for 26 percent through 35 percent of awards. DUNS numbers are provided to the government through a contract with Dun and Bradstreet, a commercial entity. Nearly all of these cases were assistance awards, for which the field is not displayed on the website.

Report formatting for the website and the existing contract with Dun and Bradstreet along with an unclear reporting requirement and incomplete oversight of agency reporting processes contributed to many of the inconsistencies. Specifically:

Display format on USASpending.gov: Inconsistencies in the recipient congressional district and place of performance congressional district and country fields are partly attributable to the website either not displaying the information or improperly displaying it. Officials from the Integrated Award Environment program management office at GSA stated that the principal place of performance country was not displayed on the website because the report format was missing that field. Further, officials stated that the recipient congressional district displayed incorrect information in some cases due to a logic error on the website. As of April 2014, GSA made technical changes to the website which addressed these issues.

Access to vendor-provided data: GSA officials stated that the parent unique identifier was not displayed on the website for assistance awards because its contract with the provider of that information, Dun and Bradstreet, only covers publishing the data for contract awards. According to these officials, GSA plans to add this data in an upcoming service pack in 2014.

Lack of clear guidance: Multiple agency officials attributed nondescriptive award titles to a lack of guidance to define what constitutes a fully descriptive award title. We identified this as an issue in our March 2010 report, in which we recommended that OMB provide clarifying guidance on this reporting requirement. As of April 2014, OMB officials stated that the office still concurs with this recommendation. However, OMB has not yet provided clarifying guidance. Unless each award has a descriptive title clearly identifying the purpose of the award, the public may not be able to determine why the award was made and taxpayer dollars spent. Incomplete oversight of agency reporting processes: Agency reporting processes for which there is incomplete oversight to identify and correct mistakes contributed to several of the significantly inconsistent data elements. For example, multiple agency officials attributed inconsistent recipient congressional district information to a system lookup that automatically generates this information based on a zip code. They stated that inconsistencies were caused when the zip code was incomplete or incorrect, or when the lookup table was out-of-date.

Further, for the recipient street address and zip code, inconsistencies occurred, in part, because agencies did not update FPDS-NG with the correct information. For a new contract, FPDS-NG relies on the recipient’s unique identifier to automatically populate the recipient’s address from SAM, but for a modification to an existing contract, the system uses the address from the base award unless the agency submits an updated address. Meanwhile, the system for entering information on assistance awards does not have the capability to automatically generate address information, so OMB directed agencies to verify recipients’ addresses against Dun and Bradstreet’s information, and enter a confidence code, provided by Dun and Bradstreet, to confirm the information had been verified. However, we estimate that agencies submitted a confidence code that meets OMB’s threshold for only about a thirdtransactional assistance awards, and the validation rules applied by the website do not validate these elements except to ensure that they are non-blank and, in the case of the zip code, contain five digits.

Lastly, inconsistencies in the principal place of performance information were caused, in part, by agency processes that resulted in the wrong data being reported. For example, officials from the Federal Highway Administration stated that the agency reported the county instead of the city because the Federal Aid Highway Program mandates the use of county names. In another example, the Chief of the Payment Management Office at the Department of Agriculture stated that its award tracking system is programmed to use the business address if a specific principal place of performance address is not provided. However, these practices are inconsistent with FFATA’s requirement that agencies report the city, state, congressional district, and country of performance for each award. Based on relevant guidance, if work occurs across multiple cities, the agency should report the city in which the majority of the work took place. Because there was no oversight to verify that the agencies were following this guidance, each continued to report information that was inconsistent with the guidance.

Weaknesses in OMB’s guidance on data validation likely contributed to these problems remaining unaddressed. We identified this as an issue in our March 2010 report, in which we stated that OMB’s guidance specified that agency data submissions are to be validated by an appropriate official but did not identify how or by whom. In that report, we recommended that OMB provide guidance to agencies to clarify the requirement for validating agency award data. As of April 2014, OMB officials stated that the office still concurs with the recommendation, and stated that it had initiated a validation process in its June 2013 memorandum that directed agencies to use data from their financial systems or other authoritative sources to validate financial data reported on USASpending.gov.

However, this validation process only focuses on the award amount but does not address the remaining 20 data elements. Further, OMB decided not to implement one oversight mechanism it had previously considered using—a dashboard displaying the quality of agency data submissions on the website. In addition, the recently enacted Digital Accountability and Transparency Act of 2014 established requirements for agency inspectors general and GAO to periodically review agency spending data. However, because these requirements do not come into effect until November 2016, it will be some time before they affect the quality of agency spending data. Thus, until OMB implements a process to ensure that agencies report consistent information for each required data element, it risks continued inconsistencies that significantly limit the accuracy of data displayed on USASpending.gov.

Twelve Data Elements Could Not Be Determined to Be Significantly Consistent or Inconsistent Due to a Lack of Supporting Documentation

For the 12 remaining data elements, incomplete or inadequate agency records prevented us from determining whether they were significantly consistent or inconsistent. OMB directed agencies to ensure that USASpending.gov reporting contains information that is consistent with agency records or other authoritative sources. OMB did this twice. Most directly, in its April 6, 2010, memorandum that requires agencies to ensure reporting is accurate, and defines this as “the percentage of transactions that are complete and do not have inconsistencies with systems of record or other authoritative sources.” Earlier, OMB issued more general guidance directing agencies to have a process that enables the agency to substantiate (by documentation or other means) the quality of information it disseminates.

However, for 12 of the data elements, we could not determine the extent of consistency or inconsistency because agency records provided to us did not always include definitive information adequate to verify the information reported on USASpending.gov (see table 5).

Four data elements in particular exhibited a significant amount of unverifiable information, meaning that at least 10 percent of awards contained unverifiable information for these data elements. Specifically, we found that:

CFDA number: FFATA requires agencies to identify and display on USASpending.gov the assistance funding agency and CFDA program number. However, records provided to us did not include definitive information adequate to verify the information reported on USASpending.gov for the CFDA program number for 12 percent through 22 percent of assistance awards. For example, our representative sample contained four assistance awards identified in USASpending.gov under CFDA program 64.012, Veterans Prescription Service. However, records provided by the agency did not identify the CFDA program number nor distinguish funding from a number of other medical benefits programs.

Program source agency and account codes: Treasury’s Account Symbol was selected to be used as the official program source for use on the website and is made up of two related codes: agency code and account code. OMB guidance requires agencies to ensure that award documents contain the predominant Treasury Account Symbol. However, records provided to us did not include definitive information adequate to verify the information reported on USASpending.gov for the data element agency code for 14 percent through 21 percent of awards and 19 percent through 27 percent for the account code. For example, officials from Department of Veterans Affairs Data Quality Services stated that program source information could not be provided because there was no documented link between the award and the program source information stored in the financial system. For another award, the Office of Personnel Management provided a system screenshot that documented charge account information. However, the office did not provide supporting documentation to show how the charge account information tracked to the program source reported on USASpending.gov.

Principal place of performance state: Guidance on USASpending.gov states that the place of performance should be reported as the place where the majority of work takes place, while reporting. However, other specific guidance is available for contractrecords provided to us did not include definitive information adequate to verify the information reported on USASpending.gov for the place of performance state for 23 percent through 31 percent of awards. For example, five contractual transactions for pharmaceuticals, conducted by the Defense Logistics Agency, were with the same entity but agency records did not specify the vendor location responsible for distribution of these pharmaceuticals. In another example, the source system for an award at the Farm Service Agency did not contain place of performance information and therefore provided empty spaces to the system which generates reports to USASpending.gov.

Several factors contributed to agencies’ lack of records to verify award information:

Lack of clear guidance: No guidance on how to substantiate information reported to USASpending.gov contributed to a lack of records to verify several data elements. In particular, agencies generally use electronic systems to manage awards, but the CFDA program number is not routinely included in the electronic records. Instead, according to officials at several agencies, the CFDA program number is reported at the time information is reported to the website and officials do not document this decision in the system.

Moreover, in one case, officials stated that the agency relies on an automated process whereby the address of the recipient of a contract is reported to USASpending.gov as the place of performance, which may or may not be correct. As this is an automated process, the agency does not document place of performance information in the contract file. By not capturing this information in some authoritative source, the information displayed on the website is not verifiable.

Agency compliance with existing guidance: Multiple agency officials attributed a lack of program source documentation to this information being stored in a financial system and therefore not always accessible. However, OMB guidance requires agencies to ensure that award documents, and not the financial system, contain this information.

Without more specific guidance on how agencies are to substantiate the information required to be reported to USASpending.gov and a process to ensure adherence to that and existing guidance, agencies will be constrained in their ability to comply with OMB guidance requiring agency validation of award information.

Two Additional Data Elements Could Not Be Tested

In addition to the required data elements we tested, there are two additional types of data that should be displayed on USASpending.gov, executive compensation and subaward information. As discussed earlier, it is the responsibility of a prime awardee to report subaward and executive compensation information.

We were unable to test the consistency of these data elements because agencies frequently do not maintain records to verify the information reported by the awardees. For example, the Federal Highway Administration issued 12 awards included in our sample, 3 of which displayed subaward information on the website. A senior financial policy analyst for the Office of Financial and Management Programs at the Federal Highway Administration stated that the entering of subaward information is the responsibility of a state’s Department of Transportation and not a part of the federal Department of Transportation process. She added that there is not a process whereby the Department of Transportation confirms the validity of subaward information entered in FSRS. As such, officials could not provide agency records with subaward information for any of the 12 awards included in our sample. Officials with the Federal Highway Administration added that the same issue pertained to the verification of executive compensation information displayed on USASpending.gov. Without agency records on subawards and executive compensation, we could not test whether the information reported by prime awardees is accurate.

Conclusions

Fulfilling FFATA’s purpose of increasing transparency and accountability of federal expenditures requires that USASpending.gov contain complete and accurate information on applicable federal awards. However, our examination of awards identified significant underreporting of awards and few that contained information that was fully consistent with the information in agency records. While OMB placed additional responsibilities on agencies to ensure their reported information was accurate, our testing of the 2012 awards shows that this approach has had limited effect on the overall quality of the data. In addition, many of the specific issues we first identified in 2010, such as unclear award titles and inaccurate information on place of performance, continue to limit the reliability of USASpending.gov data. If properly implemented, OMB’s 2013 guidance on linking award financial information to information from agency financial systems and reporting the results on a quarterly basis could help address underreporting of awards. However, the ongoing inaccuracies in reported non-financial award information reinforce the need for a more comprehensive oversight process. Finally, gaps in records used to validate the data on the website continue to exist.

Until these issues are addressed, any effort to validate USASpending.gov data will be hampered by uncertainties about the accuracy of the data. The transition of operational responsibility for the USASpending.gov website to Treasury presents an opportunity to reexamine the appropriate level and methods of oversight and to develop and implement procedures that more effectively ensure that data reported to USASpending.gov are complete and accurate enough to fulfill the purpose of FFATA.

Recommendations for Executive Action

To improve the completeness and accuracy of data submissions to the USASpending.gov website, we recommend that the Director of the Office of Management and Budget, in collaboration with Treasury’s Fiscal Service, take the following two actions: clarify guidance on: agency responsibilities for reporting awards funded by non-annual appropriations; the applicability of USASpending.gov reporting requirements to non-classified awards associated with intelligence operations; the requirement that award titles describe the award’s purpose (consistent with our prior recommendation); agency maintenance of authoritative records adequate to verify the accuracy of required data reported for use by USASpending.gov; and develop and implement a government-wide oversight process to regularly assess the consistency of information reported by federal agencies to the website other than the award amount.

To improve the completeness of foreign recipient data on the USASpending.gov website, we recommend that the Chief Executive Officer of the Millennium Challenge Corporation direct responsible officials within the Corporation’s Department of Administration and Finance to report spending information on all assistance award programs to USASpending.gov for prior and future fiscal years in accordance with statutory requirements and OMB guidance.

Agency Comments and Our Evaluation

We provided a draft of this report to GSA, OMB, the Millennium Challenge Corporation, and Treasury for review and comment. GSA provided technical comments only, which we have incorporated as appropriate. OMB generally agreed with our recommendations. The Millennium Challenge Corporation and Treasury neither agreed nor disagreed with our recommendations. Each agency’s comments that we received are discussed in more detail below.

In oral comments, staff from OMB’s Office of Federal Financial Management stated that the agency generally agreed with our recommendations for OMB to clarify guidance and develop and implement a government-wide oversight process to improve completeness and accuracy of data submissions to the USASpending.gov website. OMB staff stated that these recommendations are consistent with future actions required by the Digital Accountability and Transparency Act of 2014, including establishment of a government-wide financial data standard and periodic review of agency spending data by inspectors general. Staff stated that OMB in conjunction with Treasury will consider interim steps to improve data quality but added they do not want to inhibit agency efforts to work toward implementation of the act.

We agree that the newly enacted provisions of the act could eventually help improve the quality of federal spending data. We believe that our recommendations are not in conflict with adherence to the act but rather will help agencies to take steps towards achieving the core tenets of data transparency reflected in the act. Accordingly, it will be important for OMB to fully address our recommendations.

In e-mail comments, staff from the Millennium Challenge Corporation’s Financial Management Division neither agreed nor disagreed with our recommendation that the corporation should report spending information on all assistance award programs to USASpending.gov for prior and future fiscal years in accordance with statutory requirements and OMB guidance. However, agency comments reflect general disagreement. Specifically, staff stated that the Millennium Challenge Corporation has made significant attempts to load foreign assistance data on USASpending.gov but has been unable to do so due to technical limitations of the website. However, we found that the attempted transmittal submitted by the Millennium Challenge Corporation for our review was rejected because the corporation omitted most of the data fields required by FFATA and guidance for the website, including several for which the required information should be readily available regardless of the recipient, including the transaction type, funding amount, and project description. Moreover, other agencies have successfully submitted data on assistance awards to foreign governments such as the Departments of Defense, Health and Human Services, and State.

Agency staff also noted that the Millennium Challenge Corporation continues to work with GSA and OMB to resolve the technical issues preventing transmittal of the data in order to reach full compliance in the future. Specifically, the Millennium Challenge Corporation staff indicated that the corporation had asked OMB for an alternate reporting mechanism. However, until OMB agrees to an alternate approach, the Millennium Challenge Corporation is required by OMB guidance to use the existing mechanism to report its awards in the same manner as other agencies that make awards to foreign governments. Accordingly, we maintain our recommendation.

Treasury stated in its comments that the bureau will consider the recommendations as it assumes responsibility for USASpending.gov. Treasury’s comments are reprinted in appendix V.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time we will send copies to the appropriate congressional committees; the Director of the Office of Management and Budget; the Secretary of the Department of the Treasury; the Administrator of General Services; and the Chief Executive Officer of the Millennium Challenge Corporation. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please contact me at (202) 512-4456 or chac@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made contributions to this report are listed in appendix VI.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to determine the extent to which (1) federal agencies report required award data and (2) inconsistencies exist between the data on USASpending.gov and records at federal agencies. To address these objectives, we examined data collection and reporting requirements under FFATA; relevant OMB guidance, other relevant requirements variously published in the Federal Acquisition Regulation, Code of Federal Regulations, and the Federal Register, and agency systems documentation.

To determine the extent to which federal agencies are reporting required award data, we reviewed contract and assistance award reporting requirements as defined in FFATA, OMB guidance, and other federal guidance. We compiled a list of potential award-making agencies/programs using the Public Budget Database for contracts and We the Catalog of Federal Domestic Assistance for assistance awards.then assessed the list of agencies against reporting requirements under FFATA and relevant guidance to determine which agencies are exempt from reporting to USASpending.gov.

To determine the extent to which agencies reported contractual information to USASpending.gov, we selected the agencies listed in the Public Budget Database with budget authorities greater than $400 million for fiscal year 2012. We selected these agencies to ensure the inclusion of large agencies likely to have awarded a significant number of contracts. We searched USASpending.gov to determine which of these agencies reported contractual information for fiscal year 2012. For any selected agency reporting no contractual information for fiscal year 2012, we reviewed documentation and interviewed agency officials to determine why contracts were not reported.

To determine the extent to which agencies reported assistance award information to USASpending.gov, we identified all programs listed in the Catalog of Federal Domestic Assistance as of February 2013. We searched USASpending.gov to determine which programs reported information on at least one assistance award for fiscal year 2012. In addition, we selected all loan programs reporting transactions to USASpending.gov for fiscal year 2012 but reporting $0 in subsidy costs. For any program reporting no assistance award information for fiscal year 2012 or reporting a subsidy cost of $0, we interviewed agency officials and reviewed documentation to determine why information was not reported. For programs that claimed they do not make financial assistance awards and are therefore exempt from reporting to USASpending.gov, we assessed the purpose of each program against the definition for federal financial assistance for validity. For all programs categorized as either making an award and not reporting, or reporting awards late to USASpending.gov, we requested that the agency provide an estimate for obligations made under this program for fiscal year 2012.

To determine the extent to which inconsistencies existed between the data on USASpending.gov and records at federal agencies, we selected a simple representative random sample of 385 fiscal year 2012 records. The probability sample was designed to estimate a rate of reporting errors with a sampling error of no greater than plus or minus 5 percentage points at the 95 percent level of confidence. Because we followed a probability procedure based on random selections, our sample is only one of a large number of samples that we might have drawn. Since each sample could have provided different estimates, we express our confidence in the precision of our particular sample’s results as a 95 percent confidence interval (e.g., plus or minus 5 percentage points). This is the interval that would contain the actual population value for 95 percent of the samples we could have drawn. For 21 data elements required by FFATA or OMB guidance, we compared the information reported on USASpending.gov to information contained in the originating agency’s underlying records, where available, to evaluate to what extent the data was consistent.

To test the controls over the reliability of agency data, we obtained supporting documentation to confirm that the agency provided only official agency records, such as a system of records notice. When such a supporting document was unavailable, we reviewed agency transparency policy documentation, data verification and validation plans or procedures, or system source code information to ensure the reliability of the data. We did not assess the accuracy of the data contained in records provided by agencies. To the extent that we had previously assessed the reliability of a system, we worked within GAO to obtain the necessary supporting documentation.

We conducted this performance audit from December 2012 to June 2014 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: List of Agencies Reviewed, Based on the Catalog of Federal Domestic Assistance

Table 7 shows the agencies included in our review of assistance programs listed in the Catalog of Federal Domestic Assistance, broken out by the number of programs.

Appendix III: List of Agencies Included in Our Sample

Table 8 shows the agencies included in our representative sample, broken out by the number of contracts and assistance awards. The table further breaks down assistance awards to show the total number of awards aggregated at the county level.

Appendix IV: GAO Estimates of Consistency Rates

Table 9 lists the estimates for each of the required data elements we tested for fiscal year 2012.

Appendix V: Comments from the Department of the Treasury

Appendix VI: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, James R. Sweetman Jr., (assistant director), Mathew Bader, Carl Barden, Colleen Candrl, Nancy Glover, Wilfred Holloway, James Houtz, Ruben Montes de Oca, Kate Nielsen, David Plocher, Matthew Snyder, and Umesh Thakkar made key contributions to this report.