H.R. 2146: DATA Act

H.R. 2146

DATA Act

Date
April 25, 2012 (112th Congress, 2nd Session)

Staff Contact
Sarah Makin

Floor Situation

On Wednesday, April 25, 2012, the House is scheduled to consider H.R. 2146, the Digital Accountability and Transparency (DATA) Act, under a suspension of the rules requiring a two-thirds majority for approval.  The bill was introduced on June 13, 2011, by Rep. Darrell Issa (R-CA) and referred to the Committee on Oversight and Government Reform, which held a mark up and reported the bill by voice vote on October 25, 2011.

Bill Summary

H.R. 2146 would impose a universal reporting requirement for recipients of federal grants, loans, and contracts.  It would also require federal agencies to publicly report all of their obligations and expenditures—encompassing both external spending (i.e. grants, loans, and contracts, and internal spending on salaries, supplies, and facilities).

The DATA Act would provide for recipient-reported and agency-reported spending information to be disclosed publicly on a single online platform.  To ensure that these two categories of information be checked against one another and easily searched and analyzed, the DATA Act would impose common data identifiers and electronic reporting standards on recipients and agencies.

The DATA Act would establish a new independent federal entity, the Federal Accountability and Spending Transparency Board (FAST Board).  The FAST Board would be charged with collecting federal spending information and publishing that information in formats that make it easy to search, sort, and download.  

The DATA Act would expressly remove responsibility for federal spending transparency from OMB and would assign it to the FAST Board.  The DATA Act would empower the FAST Board to collect periodic reports from recipients of all federal grants, contracts, and loans that describe each recipient's receipt and use of federal funds.  To ensure compliance by recipients, each Executive agency would be directed to make the bill's recipient reporting requirement a condition of receiving funds under all of the agency's grant, contract, and loan programs.  

The DATA Act would also require every Executive agency to report all of its receipts and disbursements of federal funds to the FAST Board.  The bill would direct the Board to permit agencies to comply with this requirement by submitting information that they already submit to existing government-wide financial systems.

The bill would direct the FAST Board to designate common electronic data elements and reporting standards for the spending information it collects.  The bill would also require recipients and agencies to use the elements and standards designated by the Board.  

The DATA Act would require the FAST Board to publish, online, all of the information it receives from recipients and agencies.  The bill would require that the information be made available to the public in a timely manner, in its original format, without any charge, registration, or license requirement, and be easily searchable.  

To effectuate the FAST Board's mission, the DATA Act would require that the Board's regulations and guidance are binding on recipients and agencies.  The bill would also require the FAST Board to set up a Federal accountability portal—an electronic platform combining spending information with other Federal databases and commercially-available information sources—that will replicate the current ROC across all Federal spending.   

Background

According to Committee Report 112-260, for the past two years, the Committee has examined the need to improve the transparency of federal information, particularly federal spending data.  The Committee's efforts have included seven hearings, the formation of the Congressional Transparency Caucus, and extensive outreach and research by Republican and Democratic Committee staff.  H.R. 2146 would apply the lessons learned from these activities to open federal spending to closer scrutiny by the public, watchdog groups, media, executive branch management, and Congress.

According to the Committee, American taxpayers have the right to expect free access to accurate, comprehensive, and useful information describing how the federal government uses their money.  Transparency can provide a check on waste, fraud, and abuse in government but only if federal data is reliably published in formats that make it easy to analyze.  Decision-makers within the government--including managers in the executive branch and members serving on the Congressional appropriations and oversight committees--also need this information to make informed choices.

Despite groundbreaking efforts to make federal spending transparent to Americans, the information currently made available by the government often lacks accuracy, comprehensiveness, and usefulness.  For example, the Sunlight Foundation in 2010 reported that USASpending.gov provided accurate information for only 35 percent of federal grant programs.

Moreover, USASpending.gov covers federal grants, contracts, or loans, but not internal agency spending, which means that it cannot provide taxpayers or decision-makers with a complete picture of the cost of a given program, office, or department.  The Sunlight Foundation study covered only grant programs, because grant information on USASpending.gov may be compared to corresponding information in the Catalog of Federal Domestic Assistance, but there is no independent compilation of contract information to which contract data on USASpending.gov may be compared.  On September 29, 2010, the Sunlight Foundation filed a Freedom of Information Act (FOIA) request with the Office of Management and Budget (OMB) for data quality reports covering the Federal Procurement Data System (FPDS), which feeds contract data into USASpending.gov.  The FPDS data quality reports would have permitted the Sunlight Foundation to evaluate the accuracy of USASpending.gov's contract data.  OMB had not responded to the Sunlight Foundation's FOIA request as of July 2011, and on May 25, 2011, refused a request by the Committee on Oversight and Government Reform for the same documents.

Recovery.gov has demonstrated better accuracy and relevance than USASpending.gov.  Its recipient-reported data has proved more useful for government-wide oversight than USASpending.gov's data.  First, Recovery.gov's recipient-supplied reports are received quarterly, permitting activity to be tracked across time; by contrast, USASpending.gov only publishes data once for each contract, grant, or loan transaction.  Second, the recipients of stimulus grants, contracts, and loans have a strong incentive to report accurately under ARRA, because they run the risk of losing their stimulus funding if they do not.  Meanwhile, federal agencies have a weaker incentive to provide accurate data to the government-wide databases that feed USASpending.gov because the Federal Funding Accountability and Transparency Act of 2006 (`FFATA') mandate applies to OMB but not to the agencies, and imposes no penalties for noncompliance.  However, Recovery.gov's scope is even more limited than that of USASpending.gov; it covers only the grants, loans, and contracts that are funded by the stimulus.

In contrast with the extensive use of the Recovery Operations Center by the Recovery Board and inspectors general throughout the executive branch to detect irregularities and fraud, federal authorities do not use USASpending.gov for any oversight-related purpose.

Finally, the usefulness of both USASpending.gov and Recovery.gov is hampered by the federal government's long-term failure to adopt common data elements and reporting standards for electronic financial information.  For example, there is no system of identifier codes for all federal awards; instead, every agency separately tracks grants, contracts, and loans using its own distinct system.

Similarly, there is no system of identifier codes for all recipients of federal grants, contracts, and loans; no master list of all federal programs; and, in fact, no agreed system of agency codes. Without government-wide identifiers for awards, recipients, programs, agencies, and other data elements, sophisticated electronic searches and comparisons will be impossible, even under a comprehensive spending transparency mandate.

Cost

Assuming appropriation of amounts authorized and estimated to be necessary to improve the collection and reporting of government financial data, CBO estimates that implementing the bill would cost $575 million over the 2012-2016 period.  Enacting H.R. 2146 could increase revenues from the collection of civil and criminal penalties and direct spending of those amounts; therefore, pay-as-you-go procedures apply.  However, CBO estimates that the net budgetary impact of any additional collections would be negligible for each year.