Open Data and Oversight: How Data Standards Empower Anti-Fraud Analytics

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Open Data and Oversight: How Data Standards Empower Anti-Fraud Analytics

Today the House Oversight Committee’s subcommittees on management and IT will hold a hearing on the DATA Act of 2014.

Committee members want to make sure the nation’s first open data law is on track. The DATA Act requires the Treasury Department and the White House to jointly decide on a government-wide data structure for federal spending information – and obligates every agency to report its spending using that data structure by May 2017. Once all the information is standardized, the Treasury Department must publish it on an expanded version of the data portal.

When it passed the DATA Act two years ago, Congress cited the need for the federal government to be more transparent to its people. That’s quite correct: once federal spending is published as fully-standardized, open data – instead of documents – it’ll be easier for taxpayers to understand what their government is doing.

Today’s hearing (which will be livestreamed on the Oversight Committee’s website) will likely feature plenty of questions from Members of Congress about whether the DATA Act is going to fulfill this goal.

But transparency wasn’t the only reason for the DATA Act. Congress was also motivated by a desire to turbocharge the fight against fraud.

The Data Coalition and Esri will be exploring this story over breakfast on Tuesday, April 26, at 1776 Crystal City. Tickets are available here. Join us!

But in the meantime, here’s how the DATA Act could make it easier to find federal fraudsters.

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Esri’s interactive web map of federal spending in 2013.


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Esri’s interactive web map of federal spending in 2013.


The Stimulus Standards Success Story: Illuminating and Eliminating Fraud

When first introduced in 2011, the DATA Act had a clear blueprint. Congress wanted to replicate what the Recovery Accountability and Transparency Board – the temporary entity in charge of overseeing the 2009 fiscal stimulus package – had been doing.

The Recovery Board, under chairman Earl Devaney, decided to adopt a standardized data structure for stimulus spending. The Recovery Board decreed that grantees and contractors reporting to the government on how they were using stimulus dollars had to use the same data format for those reports – regardless of which federal agency had awarded the money.

The Recovery Board showed us what open data can do for spending.

Thanks to Chairman Devaney’s insistence on standards, the Recovery Board’s website became the best example of spending transparency. delivered taxpayers a complete picture of how the stimulus program was spending their money. This wouldn’t have been possible without the government-wide data format grantees and contractors were using to report on their stimulus awards.

But transparency wasn’t the only benefit.

The Recovery Board also set up a government-wide analytics platform, known as the Recovery Operations Center, that combined the standardized stimulus spending data set with other databases, some nonpublic: criminal conviction records, Social Security’s master death file, and much more. The Recovery Board offered access to the Recovery Operations Center to the inspector general of every agency.

Each IG could sign into the Recovery Operations Center, track its own agency’s stimulus spending, compare it to other agencies’ stimulus spending, and uncover suspicious patterns.

The Recovery Operations Center proved a smashing success. Inspectors general using the Recovery Operations Center were able to recover (or prevent from being paid out in the first place) over $100 million from questionable grantees and contractors, a far larger number than the cost of the platform.

The original version of the DATA Act would have set up a government-wide version of the Recovery Operations Center, capable of surveying all federal spending data, not just within the stimulus.

But because this would have required a new federal entity, some members of Congress objected. The final version of the DATA Act didn’t preserve the Recovery Board’s analytics platform.

As a result, although Treasury and OMB are adopting government-wide data standards for spending, there is no government-wide analytics platform to use the newly-standardized data to find fraud.

What’s Ahead for Anti-Fraud Analytics?

It’s too bad that Congress couldn’t give us a government-wide anti-fraud analytics platform. But the DATA Act still promises to benefit anti-fraud analytics in more localized ways.

Every agency, once it standardizes its spending information by May 2017, will have a new foundation for anti-fraud analytics.

The DATA Act standards connect financial information, like accounting line items, with award information, like the terms of contracts. Before the DATA Act, it was very hard to match a particular grant with the accounts from which the grant was funded. After the DATA Act, that match will be automatic.

Agencies like the Small Business Administration are discovering that the DATA Act standards allow new mash-ups of spending information. For instance, as SBA deputy CFO Tim Gribben told a Data Coalition gathering last year, once the SBA translated its spending information into the DATA Act structure, he was able to visualize all his agency’s grant spending – accounting details included! – on a map.

Even without a government-wide anti-fraud analytics platform, the possibilities for agencies and their inspectors general are exciting.

The Data Coalition and Esri are going to start exploring these possibilities over breakfast next week. We hope to see you there.

What: Data Breakfast: Open Data for Oversight

When: Tuesday, April 26, 7:30 am – 9:00 am

Where: 1776 Crystal City, 2231 Crystal Drive, Suite 1000, Arlington, VA

Who: Panelists include former Postal Service Inspector General Dave Williams, GAO Center for Enhanced Analytics director Vijay D’Souza, and MITRE Principal Gordon Milbourn

Tickets: Available here; complimentary for federal employees and Coalition members.

Details: Event website