Financial transparency is a clear proposition, but realizing the concept isn’t so easy.
This is the broad takeaway from a new report from the Data Foundation that details benefits and tangible goals to the Digital Accountability and Transparency Act (DATA Act). Advocates of the law, which passed in 2014 to standardize and publish all federal spending data online, are now attempting to unlock critical support from agencies and legislators — support in the form of appropriations funding from Congress, political authority for data gathering and a green light from agencies to do away with old reporting systems.
Since the act's introduction, Hudson Hollister, executive director at the Data Coalition — the Data Foundation’s sister organization — has rallied to propel the DATA Act forward. The new report, jointly published by the foundation and MorganFranklin Consulting, stresses benefits while underscoring deadlines and likely routes for progress so agencies can begin publishing spending data by May 2017.
Hollister said to open up the spending data, the Treasury Department, in partnership with the White House Office of Management and Budget (OMB), published the nation’s first standardized data format last April, a Herculean task considering the differences between agencies.
“We need clarity about whether this new open data mode of reporting is going to become the only one," Hollister said, "because if it doesn’t, there is a chance that DATA Act reporting might just wither on the vine."
To sidestep that possibility, the Data Coalition is lobbying for legislators to appropriate funding to the U.S. Treasury and at least four agencies, something Hollister said he is optimistic about and that is already embedded within a few appropriations measures. It’s likely, he added, that while the appropriation bills won’t pass due to time constraints, a funding stopgap measure will likely include a portion of the DATA Act funding for the four agencies.
Frank Landefeld, MorganFranklin’s managing director and public-sector market leader, said in his work as a consultant inside government and out, what’s often underestimated when attempting systemic transitions are defining benefits and showing tangible steps for returns.
“We need people to realize that this isn’t yet another compliance exercise, an unfunded mandate being driven by the government…,” he said. “If people don’t see that there is a clear pathway for them or their constituencies or stakeholders, it’s very difficult to get people to rally behind anything.”
The Data Foundation is proposing the creation of a DATA Act Operations Center to emphasize benefits and show immediate value to agencies. Hollister said the center would cost just under $10 million to establish, and would perform investigatory and analytic activities to detect financial fraud, waste and abuse. The concept is not new. It’s formation draws inspiration from the Recovery Accountability and Transparency Board’s Recovery Operation Center (ROC), used during the Great Recession to track stimulus spending with results published on Recovery.gov — shutdown in 2015 after the center had completed its duties.
According to an article by GovExec, the ROC claimed almost $160 million in recoveries, forfeitures, seizures and estimated savings, while its recommendations for better use of funds totaled $8 billion and warnings about questionable costs totaled $5 billion.
Data Foundation estimates put DATA Act Operations Center savings in the billions — if it was given the proper authority.
“If you just extrapolate that [operation’s center model] to all the funding that’s spent every year on grants and contracts, we estimate that between $1.5 billion to $2 billion could be saved annually just by setting up a data analytics platform,” Hollister said.
Among its significant recommendations, the report noted that proprietary systems like the Data Universal Number System (the DUNS number) would have to be retired to do away with data system access fees, and that the president’s budget would also have to be connected to the DATA Act’s structure.
Despite challenges, both Hollister and Landefeld say there is momentum in D.C. to see the DATA Act through. CFOs are starting to see the valuable bridge the DATA Act would facilitate between accounting and grant writing systems, and digital consultancy 18F has completed a feasibility study that confirms a new way of financial reporting would not cripple old systems or processes.
“This has never been one person’s, or even one office’s, or even one agency’s job before,” Hollister said. “These different types of reporting have not been just different jobs, but different professions, and so the fact that we have a data structure that unites them all to give us one picture of spending, that is a huge win.”