Treasury and OMB Announce DATA Act Standards! Here’s What You Need to Know.


One year ago yesterday, President Obama signed the Digital Accountability and Transparency Act of 2014 (DATA Act) into law. The nation’s first-ever open data law envisions the transformation of the federal government’s spending information from disconnected documents into searchable data. The Treasury Department and the White House Office of Management and Budget (OMB) met the law’s first, one-year deadline on Friday, May 8 (a day early!), by announcing the data standards that will make this documents-to-data transformation possible.

The DATA Act’s long journey began in 2010, when Rep. Darrell Issa (R-CA) decided to pursue legislation to make federal spending data fully searchable. Issa and Sen. Mark Warner (D-VA) first introduced the legislation in June 2011. The DATA Act’s arduous three-year journey to passage was memorably told last year by Vox.com’s Andrew Prokop. The DATA Act’s enactment a year ago was the Data Transparency Coalition’s first major legislative victory in our quest to transform all government information into open data – but it won’t be our last!

Back to the present. In this post, you’ll find a full rundown of Friday’s Treasury/OMB announcement; an unvarnished assessment of what’s good, what’s bad, and what’s vague about it; and three next steps for federal leaders, tech companies, and transparency supporters.

The next public opportunity to engage with the DATA Act leaders at Treasury and OMB is one month away. On June 10th, the Coalition will host our second annual DATA Act Summit in Washington, bringing together the implementers, supporters, and beneficiaries of searchable spending data. With the Association of Government Accountants and ACT-IAC co-hosting, the DATA Act Summit will be the largest-ever event of its kind. You can register here.

Standards, Guidance, Playbook, and Pilot – What it All Means

On Friday, Treasury and OMB rolled out their announcement in a blog post jointly authored by Fiscal Assistant Secretary of the Treasury Dave Lebryk and OMB Controller Dave Mader. Under the DATA Act, the two Daves’ offices are jointly responsible for the whole DATA Act transformation. (No pressure.) The Daves’ blog post is your guide to the four big pieces of news: the data standards themselves, guidance from OMB on what agencies will have to do with them, a playbook published by Treasury explaining how agencies can embrace the DATA Act, and the Section 5 recipient reporting pilot program.

It’s all about standards. At the core of the DATA Act is a mandate for the federal government to adopt, and enforce, consistent data standards: data elements for common spending concepts and a common structure (expressed in the law as a “format”) that ties them all together. Data standards are so important to the DATA Act that Sen. Mark Warner defied the White House in January 2014 to make sure this mandate stayed in his bill.

Thanks to Sen. Warner’s boldness last year, the DATA Act requires Treasury and OMB to develop elements and a format, announce them, and then impose them, over two years, on all the spending information that federal agencies report – information that today is siloed in separate reporting systems and segregated into financial, budget, payment, grant, and contract databases.

On Friday, Treasury and OMB unveiled these standards. First, Treasury and OMB announced 57 data elements. In the future, agencies will have to express these elements the same way wherever they appear. Second, they announced a schema, or structure, that defines how the elements relate to each other. Agencies will be required to submit their information using this structure. There’s a new page on USASpending.gov, the federal government’s official spending data website, where the DATA Act standards are now published. (Bookmark it!)

The standards may have been unveiled, but for the most part they are still unfinalized. To their credit, Treasury and OMB have been seeking input on the elements and schema from agencies, advocates, and the public. Earlier this year, Treasury and OMB set up a portal on the GitHub collaboration platform that allows anyone to share an opinion on each element and on the schema. The Federal Spending Transparency DATA Act and FFATA Collaboration Space (rolls right off the tongue) gives everyone a voice on the standards before Treasury and OMB make choices on how each element is to be defined and how the relationships between them are to be expressed in the schema.

Nobody could claim the DATA Act is implementation without representation. Through the GitHub platform, everyone interested in data standards for federal spending has been able to watch the standards develop – and even help direct that development.

Of the 57 data elements, fifteen are final; twelve will be finalized soon; and 30 are still open for public comment. (Unsurprisingly, the 30 still open include the most controversial: a unique identifier code that identifies grantees and contractors receiving federal funds.)

The schema also needs a lot more work. Today, it covers financial information, but doesn’t yet encompass grant and contract reporting. But there’s a clear commitment to expand it so that it includes the whole structure of federal spending.

OMB guidance explains what’s coming. The DATA Act gives agencies two years, starting with the announcement of the data standards, to start using those standards to actually report their spending. What does that mean?

To start answering that question, OMB issued guidance (PDF) on Friday in the form of an official memo to all federal agencies. The guidance explains what agencies are going to have to do between now and May 8, 2017.

Agencies currently report their financial information to Treasury, their budget execution to OMB, and their grant and contract award details to various systems that feed the existing USASpending.gov website. OMB’s guidance makes clear that these activities will continue, but need to be updated so that, within two years, the information conforms to the DATA Act data standards – both the elements and the schema.

Agencies must:

  • Follow the DATA Act data elements, as published on USASpending.gov, when they collect and report any spending information, including financial to Treasury, budget to OMB, grants and contracts to various systems (page 7).
  • Get ready to report their financial information to Treasury using the DATA Act elements and schema. OMB’s guidance promises that Treasury is currently piloting this process “with select agencies” (page 7) and will provide instructions to all agencies once those pilots are complete.
  • Consistently track their grants and contracts by assigning unique identification numbers (pages 7-8). Crucially, OMB’s guidance announces that these award identification numbers (Federal Award Identification Numbers for grants and other assistance; Procurement Instrument Identifiers for contracts) will eventually need to link back and forth between financial systems and award systems. This means, for instance, that an agency must be able to figure out which transactions in its accounting software are associated with a particular grant – and, conversely, to see the awards associated with a particular accounting transaction.
  • Soon report all grant and contract transactions above the level of “micropurchases” (page 8) to the existing grant and contract award reporting systems.
  • Create a plan for all this (page 2) and share it with OMB.

For the time being, existing financial, budget, and award reporting requirements will remain in place. But the guidance gives agencies notice that there may be “future changes in agency reporting to OMB and Treasury” (page 6).

Treasury Playbook recommends proactive steps. Alongside OMB’s guidance, Treasury has published a DATA Act “Playbook” recommending eight key steps for agencies’ management. The steps are not mandatory, but Treasury suggests that they can help agencies fulfill the requirements of the DATA Act while avoiding costly system changes. The Playbook is not public, but Treasury has published a one-page summary.

The DATA Act Playbook says agencies should:

  • Create a DATA Act team, led by a Senior Accountable Official;
  • Review the DATA Act data elements and use the GitHub platform to voice their opinions;
  • Create an inventory of their spending-related data and the systems that collect and generate it;
  • Plan any necessary changes to systems and processes to capture financial, budget, and award data that are subject to the standards;
  • Set up a data “broker” – a data layer that can translate spending information produced by existing systems into the standards;
  • Test the data broker;
  • Update systems if necessary; and
  • Submit spending data consistent with the DATA Act elements and schema.

Pilot program kicks off at HHS. The DATA Act’s mandate isn’t limited to information that agencies are required to report. The law envisions that recipients – grantees, contractors, and entities receiving other forms of federal assistance, like loan guarantees – may someday begin reporting their receipt and use of federal funds using the new data standards, too.

But the law doesn’t directly require grantees and contractors to start using the standards, the way it imposes a two-year deadline on agencies. Instead, it requires OMB to commission a pilot program to test whether the DATA Act data standards will work properly for grantee and contractor reporting. If standardized reporting allows grantees and contractors to automate and consolidate their reporting processes – reducing their compliance costs – then OMB, under the law, is empowered to impose the DATA Act data standards across all the federal government’s recipients.

The Treasury/OMB blog post announces that the pilot program has started, with the Department of Health and Human Services (HHS) deputized to lead it. And HHS is busy already, having published another set of data elements – far more extensive than the 57 official ones – on USASpending.gov. This special set of data elements is meant to cover all the information that grantees must typically submit to the agency that awarded them their money. HHS will be using this set of data elements to test whether grantees’ reports can be made searchable, consolidated, and automated.

But Treasury and OMB have engaged in a bit of trickery here: the blog post announces that the pilot program will “test and explore ways to simplify the reporting process for recipients of federal grants.” There is no mention of contractors, even though the DATA Act requires the pilot program to test the DATA Act data standards for all types of awards.

The Good, the Bad, the Vague

Treasury and OMB’s announcement reflects a whole year of work, and it shows. To define the data elements, construct the schema, begin testing new reporting methods, and recruit HHS to lead a government-wide pilot program, Treasury and OMB have invested a great deal of effort. Treasury and OMB must provide strong leadership if the DATA Act’s promises of fully-searchable federal spending data and automatic reporting are to be realized. And they are:

  • Treasury and OMB have acknowledged that existing collection systems, like Treasury’s Government-Wide Treasury Account Symbol (GTAS) system and OMB’s MAX system for budget reports, will change, perhaps to automatically ensure that information submitted to them conforms to the new data standards. This acknowledgment alleviates the danger that the DATA Act might set up two parallel reporting systems – an old-fashioned one and a new, standardized one – a future that the Securities and Exchange Commission has proved dysfunctional.
  • The whole point of the DATA Act is to make federal spending information searchable across the separate reporting requirements that divide it: financial, budget, award. Treasury and OMB have shown they understand this goal by requiring agencies to establish the award identification numbers as the crucial linkage between financial and award information.
  • Treasury and OMB are going to bat for dedicated funding to get all this work done. The Treasury/OMB blog post reports that the President’s budget requests $86 million for DATA Act implementation in Fiscal Year 2016.

However, there’s one important change Treasury and OMB haven’t chosen to make, and their failure to make it will impede the transparency and usefulness of federal spending information, even fully standardized, for years to come.

The most controversial of the 57 DATA Act data elements are the ones that identify entities receiving federal awards – grantees, contractors, and other types of recipients. These elements are among the ones that aren’t finalized yet. But Treasury and OMB’s current proposal is to continue using the proprietary DUNS Number – an identification code that is owned by Dun & Bradstreet, itself a private contractor – as the official identification number for recipients and for their parent entities. Federal leaders, inspectors general, program managers, non-governmental transparency organizations, media, and watchdogs cannot use such information without purchasing a license from Dun & Bradstreet.

Unless Treasury and OMB make a drastic change in response to comments on these data elements and decide to “dump DUNS” and adopt some other identifier for recipients and their parents, Dun & Bradstreet will keep its government-supported monopoly on the identification of recipients. That’s bad news for anyone hoping to use award-related information for transparency or management. Our Coalition hopes to continue pressure to replace the DUNS Number with a nonproprietary one.

Finally, Friday’s announcement leaves at least two important questions unanswered:

  • Most agencies submit payment requests to Treasury. This payment data is the most detailed information available on federal spending, could be tremendously useful for public accountability and internal management, and isn’t currently available outside Treasury’s Fiscal Service. Three years ago, in testimony before the Senate Homeland Security and Governmental Affairs Committee, Treasury promised that payment data would one day be published, but hasn’t yet taken that action. Nor does Friday’s announcement say whether payment data will be standardized and published as part of the DATA Act effort.
  • The DATA Act requires a pilot program to test the use of data standards in both grantee reporting and contractor reporting. Yet Friday’s announcement unveils a pilot program that is only about the former and ignores the latter. Unless OMB clarifies that the HHS pilot program covers all sorts of recipient reporting – it is not complying with the law.

Our Coalition is going to keep asking these questions – because agencies, Congress, transparency advocates, and the open data industry all need to know the answers.

What You Can Do

After absorbing the announcement, the standards, the guidance, the playbook, the pilot, and this blog post, anyone could be forgiven for feeling a bit overwhelmed.

The DATA Act, even though Treasury and OMB are striving to implement it without forcing agencies to make expensive system changes, represents a huge undertaking. The law is our best chance of enabling the world’s largest, most complicated organization – the U.S. government – to report its spending in a way that makes the whole operation visible and understandable. The entire corpus of federal spending information has to be transformed into open data. The transformation starts with data standards.

But assuming you agree with the DATA Act’s mission, you don’t need to commit to years of labor. Here are three things you can do today.

 

  • Make a comment on a DATA Act data element, or the schema, on the Federal Spending Transparency DATA Act and FFATA Collaboration Space. With the federal spending community only just beginning to learn how to use GitHub and absorb the meaning of elements and schema, your early suggestions can have a disproportionate impact.
  • Write down one goal for what you’d like to do with federal spending information, once it’s fully standardized and publicly available, and plan to keep pursuing that goal. Want to be able to match a prospective grantee to all the grants that entity has received from any federal agency? Want to take a Congressional appropriations line item and see the whole life cycle of Treasury accounts, agency obligations and disbursements, awards, and subawards it triggers? Want to follow all the spending activity – external grants and contracts, internal items like total salaries – for a particular program, month by month? The DATA Act says those things should be possible. You can make them happen by insisting on them.
  • Register for the Summit. The DATA Act Summit will bring together everyone who cares about transforming federal spending, on Capitol Hill June 9th and at the Washington Convention Center June 10th. If you’re one of those people, you’ll want to be there. Registration – free for federal employees, discounted for nonprofit advocates and academics – is here. Join us!