On May 9, President Barack Obama signed into law the first federal open data bill that requires all federal agencies to publish expenditures publicly online and in a standardized machine-readable format.

His signature represents a historic milestone for the open data movement and is a feat that’s required years of advocacy from bipartisan proponents. Titled the Digital Accountability and Transparency Act of 2014, the bill is the most aggressive open data legislation ever enacted. Its wide scope and narrow guidelines will compel agencies to report spending to USASpending.gov, a federal open data portal, so expenditures can be compared across jurisdictions — a service previously unheard of digitally or otherwise at the federal level.

Implementation will be phased into a year-by-year approach. In the first year, the White House Office of Management and Budget will draft expenditure reporting guidelines while organizing a pilot program for testing. Three years from the bill’s passage, all agencies must comply with the new open data standards.

Advocates of the DATA Act, including Sen. Mark Warner (D-Va.), Sen. Rob Portman (R-Ohio) and Rep. Darrell Issa (R-Calif.) — who introduced the initial version of the DATA Act in June 2011 — celebrated when the White House confirmed the president would sign the bill at the end of April.

Hudson Hollister, the executive director at the Data Transparency Coalition (DTC), was overjoyed with the passage, as it was one of his coalition’s primary objectives since the coalition was founded in 2012.

“The DATA Act is the first open data act the country has ever seen — which is awesome,” Hollister said. “It requires the government to transform its spending from disconnected documents into open data.”

For transparency advocates, Hollister said he saw the president’s signature as the most significant action taken since the Freedom of Information Act was passed in 1966 — a law ensuring public access to all government non-classified information.

“For the open data industry, which our coalition represents, and for supporters of government transparency, President Obama’s signature is going to be his enduring legacy,” Hollister said.

However, he noted that the bill's passage has not been equally endorsed by all of the White House administration’s staff. The Office of Management and Budget (OMB), tasked to oversee much of the bill’s implementation, has been hesitant to embrace the bill since it was first proposed, Hollister said. While the OMB sees value in the act, reluctance formed when considering tasks related to implementation.

Hollister said he observed that the OMB’s reluctance stems from fears the act will be either too complicated to execute or be too labor intensive. Both concerns he empathized with, but dismissed them as unwarranted in light of the gains that can be achieved and the fact that processes will remain fairly unchanged.

“The DATA Act to many exterior observers might look like [it's too complicated to institute]," Hollister said. "But I think it’s not that. It doesn’t require new reporting requirements. Instead, it just requires some kind of electronic structure for the reporting requirements that already exist."

As the DATA Act goes forward, here are three takeaways about what the bill means for transparency, as well as an interactive timeline of the act's introduction through signing and beyond.

1. The DATA Act Requires Understandable, Comparable Budgets

Assuming all goes to plan, the most apparent benefit of the DATA Act will be its requirement to funnel federal government spending reports into a single repository, USASpending.gov, and within a single reporting standard. Before, no entity in the government had the authority to impose government-wide data standards. Now, the Treasury Department and the White House Office of Management and Budget have been tasked to do this at the national level. For agencies, this may include quite a bit of work to start, but will allow them to communicate financial data in an easy and interoperable way.

2. The DATA Act Cuts Waste, Fraud and Abuse

Tracking can be difficult when thousands of pieces of financial data are moving in many different ways and formats. Proponents argue that this complexity can lead to confusion, and confusion can breed fraudulent or wasteful spending. With the DATA Act’s common data format, automation and analytics can be used to quickly audit for accuracy, waste, fraud and abuse.

3. The DATA Act Gives Public Access and Accountability

The DATA Act will clarify government spending with sharper details on the following: congressional appropriations; to Treasury accounts, where appropriations are held; and for actual expenditures the money pays for. This information was previously obscured in summarized texts or could be reached only by special request.

Government Technology Staff Writer Jason Shueh Jason Shueh  |  Staff Writer

Jason Shueh is a staff writer for Government Technology magazine. His articles and writing have covered numerous subjects, from minute happenings to massive trends. A San Francisco Bay Area native, Shueh grew up in the east bay and Napa Valley, where his family is based. His writing has been published previously in the Tahoe Daily Tribune, Amazon Publishing, Bike Magazine, Diablo Magazine, The Sierra Sun, Nevada Appeal, The Union and the North Lake Tahoe Bonanza.