The DATA Act: Make ‘following the money’ worth the effort



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If you want to understand how government can overspend on ineffective pet programs or where the most efficient programs are, take Deep Throat’s advice from the movie “All The President’s Men” and “follow the money.”

Until recently, federal financial data has only been used for internal management. But the Digital Accountability and Transparency Act, signed into law by President Barack Obama May 9, 2014, will begin to make it easier for the public to follow the money. That’s a good thing.

But the DATA Act doesn’t go far enough, as I argued in a previous article.

Under the DATA Act, the Office of Management and Budget and the Treasury Department last month released standards for how financial data will be captured, stored and transmitted — and set definitions for key financial data terms, e.g., commitments, obligations and expenditures.

These tasks are important for comparing data across agencies. They ensure that the information can be gathered and combined electronically, and will allow the public to evaluate data across agencies more easily.

But OMB and Treasury ought to consider these additional steps:

  • Set standards for a fuller range of financial information, particularly data related to apportionment, allotment, commitment and receipts.
  • Make plans to set standards for other budget and performance data that is associated with appropriations, obligation and payment.
  • Establish standards for metadata that would help link federal finances across the life cycle of federal spending.

These steps would make the financial data more meaningful for users and could open up new uses as well.

As the graphic below illustrates, the DATA Act (the gold segments) moves beyond the 2006 Federal Funding Accountability and Transparency Act and‘s scope (the single green segment). Similarly, Treasury officials have spoken of working toward publicly exposing a fuller life cycle of the financial process (blue segments). Finally, the orange segments illustrate an appropriate long-term aspiration: to include budget and performance data associated with the same financial data.

How close are we to making the life cycle of federal spending transparent? The gold circle shows what will be in place after the DATA Act takes full force. (Chart adapted from the Treasury Fiscal Service by Jeff Myers)

These recommendations come with caveats, including recommendations to:

  • Use an independent, bipartisan panel of experts to define a program list. That way, each agency cannot use a different definition for programs with similar mission purposes. Allowing each agency to define its own programs will hinder the search for duplicative programs across agencies.
  • Provide charts and graphs to show data trends, exceptions and correlations. This may be almost as important as exposing the data.
  • Provide appropriate comparisons. Most people don’t care about obligations. They care that government lives within its means, and they care about what they get for the government’s money. Comparisons of budget to actual spending, and performance versus spending will be more appealing to most audiences than obligation or spending information alone.
  • Prepare for stonewalling. No agency will want to suffer embarrassment if the agency or its programs appear inefficient.

OMB and Treasury won’t create perfect standards on the first try. However, the concern that “this is hard” should not stop OMB, Treasury or any agency. It may take five years or more to get this done, and shortcuts are unlikely to work.

Why it’s important to act now

If OMB and Treasury only execute the letter of the DATA Act law, they will forgo a tremendous opportunity that may not be seen again for a generation. That’s because agencies will plan and make changes to meet the standards OMB and Treasury set now — but are unlikely to exert the initiative to make such changes again any time soon.

In particular, OMB and Treasury should set standards for metadata that are still needed to permit many of the uses and value described in my previous articles (see the links to them below).

One model worth considering is the “Management Cube” rubric created by the Department of Homeland Security. [Editor’s note: The author and his employer assisted DHS in developing and deploying the Management Cube.] The model covers basic questions that could frame government-wide metadata standards:

  • What was the program?
  • Why does the program exist? (What mission purpose did the spending serve?)
  • How was the program conducted? (On what functions/activities was money spent?)
  • When did the expenditures happen? (In what fiscal year, quarter and month?)
  • Where did the expenditures take place? (At what address or geo-code location?)
  • Who carried out the program? (This would encompass information on job titles and number of staff, vendors, grantees and organization units.)

OMB’s QuickSilver initiative set standards for some of these in budget requests using NAICS codes, but unfortunately these do not extend to appropriation, allocation, obligation, expenditure or financial reporting.

While OMB and Treasury can develop these standards or oversee their development, the president should issue an executive order to make this change. An executive order will ensure consistent implementation across the government.

And as the suggested timeline below illustrates, it’s possible to add these recommended efforts (highlighted in yellow) to the current DATA Act requirements (highlighted in blue).

Suggestions for what the government should add to the DATA Act timeline. (Chart by Jeff Myers)

The DATA Act requirement to expose the federal government’s financial data is an exercise that begs us to follow the money.

But a careful examination of where we want to go as we follow the money is important and helpful because envisioning the destination will help us make sure that government collects the right information to reach the destination we seek.

OMB and Treasury must act soon to define what the money trail will look like so we can find the destinations we care about.

Jeff Myers is a principal at REI Systems.

Read Myers’ previous columns on the DATA Act and open data:

How Treasury and OMB can add value to the DATA Act — If the goal of the DATA Act is to “follow the money,” OMB and Treasury officials also need to link spending to missions, not just functions.

Obtaining value from DATA Act: Follow the Money — The legislation will make it possible for the first time to follow government spending. But it doesn’t go far enough.

3 actions that could improve federal open data programs — Despite White House initiatives, agencies supplying open data still make all the decisions about what data to provide. Here are three ideas to change that.

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Agencies, Commentary, data analytics, Departments, Guest Columns, Office of Management and Budget (OMB), open data, Tech, Treasury Department
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