Whether the government’s $787 billion economic stimulus plan has actually worked may be the stuff of contentious political debate, but even partisans seem to agree that the processes and systems designed to track that money are helping to lay the foundation for better transparency and accountability in government spending.
Case in point: Rep. Darryl Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform and a vociferous advocate of transparency and accountability in federal spending, said that while he continues to have concerns about “the effectiveness and prudence” of President Obama’s trillion-dollar stimulus, the Recovery Accountability and Transparency Board [RAT Board] has provided “a commendable model of transparency…the tremendous success of the RAT Board is worthy of replication throughout the federal bureaucracy.”
Indeed, Issa has introduced legislation, the Digital Accountability and Transparency Act of 2011 (DATA Act), that incorporates the best practices emerging from recovery-act processes, such as mandatory recipient reporting. On the Senate side, Sen. Mark Warner, a Virginia Democrat, has sponsored a nearly identical companion bill, S-l222.
The American Recovery and Recovery and Reinvestment Act became law in 2009 and was intended to create jobs and promote economic recovery. The act also created the RAT Board, whose mission is to foster transparency of recovery spending by giving the public accurate, user-friendly information, as well as to prevent waste, fraud and mismanagement.
It’s not as if recipients hadn’t reported spending data back to agencies in the past. What’s new is the brute transparency of the process, facilitated by Web technologies that support highly structured data input and output.
The centerpieces of the board’s transparency and accountability effort are recovery.gov, a Web site designed to let citizens track how and where recovery money is spent, and federal reporting.gov, the central government-wide data collection system through which recipients of federal recovery funds are required to submit detailed reports on their spending activities.
The synergy between the transparency offered by recovery.gov and the accountability created by federalreporting.gov has “raised the standard for transparency and accountability” in federal spending, according to Earl Devaney, chairman of the RAT Board (pictured above).
“Recipients have a parochial interest in getting the data they feed to the government right,” Devaney told Breaking Gov in a wide-ranging interview.
“I think one possible reason is they don’t want to be embarrassed. They know that if there is transparency present, their neighbors will see what they put into the system and they take the time to get it right.”
Transparency also caused the agencies responsible for disbursing recovery funds to try to report data more accurately, he said.
“The people who dole the money out also wanted to get it right because it was so transparent so they in turn took special care of the money they gave out. It didn’t go to crazy things like dog Frisbee parks or study of honeybee mating or something. What you end up with is that transparency plays a large role,” he said. (Devaney discusses how putting IGs and managers on the same team has also helped reduced fraud in a recent article for Breaking Gov.)
Recipient reporting in public view
Devaney believes that recipient reporting through federalreporting.gov is the most cutting-edge feature of the transparency process and should be an integral part of federal spending accountability.
“The government had never required recipients to report directly into a system where 30 days later the data was going to be put up transparently, warts and all,” he said. “Recipient reporting, from my perspective, should be the way the government goes in the future.” Recipient reported data is takes on prominent visibility on recovery.gov.
At the Government Accountability Office, the Congressional watchdog agency, Jeanette Franzel, managing director for financial management and assurance, agreed. “Certainly recipient reporting is very necessary,” she said. “And now that it’s also out there in the public, I think that adds another dimension of pressure to get it right and it’s more complete.”
But it’s not as if recipients hadn’t reported spending data back to agencies in the past. What’s new is the brute transparency of the process, facilitated by Web technologies that support highly structured data input and output.
“Frankly, it’s been done [in the past] from the recipients to the agencies as part of the oversight process and the auditing process,” Franzel said. “But it’s been used inconsistently. Some agencies paid more attention to it than others in the past.”
We need to find a way to link it to all the other processes rather than have it be a separate process.” – Jeanette Franzel
To be clear, the recovery act reporting process has had its rough patches, especially when as the program was getting under way. At the start, for example, the recipients’ data “had some inaccuracies in it but as time went on, recipients became more comfortable” with the system, Devaney said.
“In actuality, if you can order a book on Amazon you can do this. So the proof of concept has been done and I think as we move forward, the government ought to think about moving to recipient reporting.”
Franzel cautioned, however, that recipient reporting ultimately can’t work in isolation.
Overcoming different reporting standards
“We need to find a way to link it to all the other processes rather than have it be a separate process,” she said. “Recipient reporting should tie to the recipient’s accountability mechanisms and it should tie in with the agency’s oversight grantee oversight process. I think recipient reporting is a wonderful step and we need to effectively tie it into all the other oversight and accountability mechanisms, because we don’t want redundancy or overlap or conflicting types of data out there.”
More of a hurdle for the RAT Board than recipient reporting has been shortcomings in reporting from the agency side. Issa noted that “the errors that have been discovered in the data of recovery.gov are due, in large part, to flawed information sent by federal agencies.”
Devaney acknowledged that getting accurate data from agencies on spending has been a challenge. “Early on we had an awful time trying to get the agencies to be able to tell us where they gave the money out,” he said. “We were actually getting very detailed and accurate information from the recipients of the money but very limited detail and very sketchy and big holes in the data from the agencies as to who they gave the money to.”
Under pressure from the Office of Management and Budget, agencies have shown improvement, he added. “OMB blew their lids over this, and the agencies got better and put more people on it and smoothed that out a little bit,” he said.
But legacy processes and systems will remain a stumbling block to enhanced transparency and accountability in federal spending, sources concurred.
The fact is there were 29 agencies that got recovery money and all 29 had different numbering systems.” – Earl Devaney
Even with the strides made the RAT board, there are still discrepancies between data supplied by recipients and that reported by agencies dispersing the funds, Devaney said. The primary reason turns out to be the lack of data identification and other standards across systems.
At the end of every quarter there are mismatches when officials try to align recipient-reported award numbers on federalreporting.gov to what the agencies reported to OMB because each agency uses its own unique numbering system for awards. This makes tracking spending unnecessarily arduous and complicated.
“The fact is there were 29 agencies that got recovery money and all 29 had different numbering systems,” Devaney said. “We almost have to eyeball the grants, loans and contracts to see if they’re the same ones although they bear different numbers or they have dashes or letters where they really shouldn’t.”
Uniform numbering system considered
As a result, Devaney has called for a uniform, governmentwide alphanumeric numbering system for all spending awards. But he worries that agencies will “dig in their heels and cling to their old systems” so the uniform award ID solution will need to be mandated through legislation.
“Ever since Herbert Hoover these systems have grown up in house so the claim of course is, ‘Great idea but it would cost a zillion dollars to do because we would have to retrofit all of our systems to accommodate a new numbering system,’” Devaney said.
The RAT board has commissioned Mitre Corp., a nonprofit technology research organization, to study the feasibility-including cost-of implementing a uniform numbering system across the government.
Such standardization is crucial to the goal of complete transparency in spending, Craig Jennings, director of federal fiscal policy for OMB Watch, an independent, nonpartisan watchdog organization, told the House Committee on Oversight and Government Reform in June. “Without establishing a comprehensive, universal unique identification system, federal spending transparency will be hamstrung,” he said.
Others agree. “Right now there are 1,670 different grant programs out there so you’ve got a huge number and then if they’re being reported inconsistently or with different schemes, it gets even more complicated,” Franzel said. “So you’ve really got problems.”
But it’s not only ID methods that need to be standardized across the government. Franzel noted, for example, inconsistencies in the content of data fields make transparency difficult.
Mark Forman, former OMB administrator for e-government and information technology, said the key to improvement in government financial transactions, including grants programs, is a common data structure.
“The way it works today is when I’m doing an accounting transaction or a procurement transaction or a grants transaction for a conference [at a university]…if I’m in one system I may call it a ‘meeting.’ If I’m in another system, it may just show up as payment to a university,” said Forman, co-founder of Government Transaction Services Inc. of McLean, Va. “But it’s a conference. We all know it’s a conference. So if everybody called it a conference then we could really say, ‘Now, how much do we spend on conferences in this program?’”
Issa’s Data Act would establish consistent data elements and standards for federal financial information to assure comparability and reliability in reported information. An independent body, the Federal Accountability and Spending Transparency Board, modeled on the RAT Board and tasked solely with tracking all government spending, would set consistent data element and standards. “Over time, [common data] use will become an accepted best practice for the whole government,” according to Issa.
Devaney said he’s “excited” about the possibility of the bill becoming law because includes man of the reforms he supports, such as recipient reporting and common data standards.
Richard W. Walker is an award-winning journalist who writes regularly on the business of government.