Federal agencies recently passed the fifth anniversary of their first required submissions under the DATA Act, providing an opportune time to reflect on the progress that the government has made and where agencies should go from here.
The DATA Act—formally, the Digital Accountability and Transparency Act of 2014—was intended to make federal spending transparent with required government-wide standardization and publication, allowing the public free access and download. It also necessitates a linkage between award data in agency financial management systems and government award systems—namely, the Federal Procurement Data System (FPDS) and Financial Assistance Broker (FAB). Finally, the DATA Act requires each agency to designate a senior official who certifies the agency submissions to Treasury.
On May 9, 2017, every executive branch agency was required to begin reporting standardized spending data to Department of Treasury in order for Treasury to make it publicly available. Current data is available at usaspending.gov.
As part of the DATA Act implementation, the government reconciled differences between financial management systems and award systems (FPDS and FAB). Prior to the implementation of the DATA Act, many agencies had timing issues where award data was in either the financial management system or the award system, but not both. The DATA Act provided visibility into these discrepancies, and as a result, agencies have addressed most of them.
Where to next?
For the most part, agencies already have addressed the low-hanging fruit for data quality issues. Federal financial data quality has improved significantly; contract award data has especially benefited as a result of the financial management system and award system reconciliation. For example, many agencies struggled to get award data into their financial management and award systems simultaneously; they have eliminated these timing discrepancies by implementing quality assurance processes.
Another data issue that agencies encountered during their implementations was the lack of object classes on spending data, which is required by the DATA Act. Although many agencies still have historical balances without object classes, they have made the changes required to populate object class on new activity. With data quality standardized and improved, many agencies are ready to look for situations ripe for business process reengineering to address remaining issues.
For example, one customer regularly reported DATA Act discrepancies for assistance funding. The discrepancies arose from timing delays between recording grants in the award system versus the financial system. Drawing on our deep process reengineering expertise, we worked with the financial system owners and assistance system owners to analyze the agency’s current grant transactional flows. Our analysis helped identify how they could adjust their approval and transaction flows to better align the formal issue of the grant with recording the appropriate funding action in the financial Enterprise Resource Planning (ERP) system.
Agencies should also look for opportunities to further leverage their investment in DATA Act reporting. For example, could agencies identify additional agency-specific data elements tied to the agency mission and add to their DATA Act reporting platform? These additions could facilitate mandated performance reporting and also provide additional information for management decision making.
Another customer leverages DATA Act elements, such as object code, program activity and treasury symbols, in addition to agency-specific fields, to create a set of executive-level dashboards and visualizations that allow financial managers to effectively monitor business process discrepancies or anomalies, as well as review variance trends and sources. The statistics and metrics within the dashboards provide management with data-driven views and predictors, allowing more accurate budget and planning decisions to support agency programs, missions and goals.
Meeting the DATA Act goals, agencies now provide reliable, timely financial and award data. The benefits are tangible: Federal spending data is now higher quality, standardized and freely available to the public. Agencies can rapidly respond to new mandates, reporting data on spending-related to emerging situations such as a public health crisis, a war or natural disasters—thanks to a framework now in place to streamline the changes.
The COVID-19 pandemic proved the framework’s value, as agencies were able to modify their DATA Act submissions to identify COVID spending within three months of Treasury issuing the requirements. This provided timely insights into COVID spending across the government in a way that was not possible in prior crises.
This sets the stage nicely for agencies to continue making improvements, each one working within its own context—its own particular data flows, areas of concern and technical challenges.
Drawing on the combined decades of experience in our Management Consulting Practice, we can help agencies identify and address their most compelling opportunities for further improvement.
To learn more, contact Kate Hebert.