DATA Act, Pushing Spending Transparency, Regains Steam

Legislation sets transparency standards for all federal spending data, making it easier for business and the public to follow government money.

September 13, 2013

4 Min Read

Congressional leaders are voicing renewed optimism for a bill promoting the use of open data standards to help track federal spending more efficiently. If the legislation, known as the Digital Accountability and Transparency (DATA) Act becomes law, it would greatly benefit firms and individuals doing business with the government because it would make it easier to track and follow where federal dollars are going and to be more informed when bidding on government contracts.

The bill's sponsor, Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, and other proponents, including House Majority leader Eric Cantor (R-Va.), believe that the DATA Act will provide the federal government with a degree of financial transparency, similar to how financial accounting practices are enforced in the private sector.

The legislation is part of a broader push to institute standards for making data easily readable by machines and widely available to the public as way to unlock the value of federal information to benefit the economy.

"Looking out five to ten years, I think we will see not just new companies but whole new industries created from open data," said U.S. Deputy chief technology officer Nick Sinai, during a forum on data transparency Sept. 10 in Washington, organized by the Data Transparency Coalition. Sinai reiterated the White House's commitment to open data, pointing most recently to President Obama's Open Data Policy, which requires each executive department to inventory all data it collects and generates, apply standards and make it available to the public.

[ Agencies are gaining ground in automating the exchange of information. Read Information Sharing: Feds Cite Progress. ]

Lawmakers, however, are focusing on open data practices as a way to expose and reduce wasteful federal spending.

The bill, H.R. 2061, would, among other things, require all spending data for federal funds to be tagged by appropriation, agency, sub-agency, account and program activity; government-wide financial data standards to be established for federal money; and a website to be set up to inform the public about activities to spot waste, fraud and abuse in federal spending. It would also have the Recovery Accountability and Transparency Board (RATB) develop and test information technology resources and oversight mechanisms to enhance transparency and to detect waste, fraud and abuse.

The RATB earned widespread praise for establishing a model for transparency in tracking the disbursement of federal funds as part of the Recovery Act. Earl Devaney, RATB's former chairman, urged support for the bill. "I think a law is the only way to ensure the government moves quickly to make data machine readable," said Devaney, during remarks at the data transparency event.

The road to data transparency hasn't been easy. Rep. Issa introduced a similar bill, which passed in the House but ultimately failed in 2011, due to objections from the White House that it would place a burden on grant recipients and vendors. Issa introduced a stripped-down version of the DATA Act in May.

The new bill has been modified to require only organizations receiving more than $1 billion in federal money to report that funding using metadata. The DATA Act also calls for a federal data transparency pilot program that will display the full cycle of federal funds, improve the accuracy of government financial data, and develop recommendations for reducing reporting requirements by consolidating and automating financial reporting rules across the federal government.

Issa, who also spoke at the data forum, expressed confidence that the bill has enough bipartisan support to become a law, possibly this year. "Organizing and structuring data will save countless hundreds of millions of dollars in the short run -- and in the long run, will save billions of dollars." Issa added that besides providing citizens with more access to information, business would benefit from more complete knowledge of the federal bidding process, which would result in more products being available for less money.

Passing the DATA Act will be an important step to improving government efficiency, he added, noting that there are currently many flaws in public reports because they are manually loaded into government databases, which leads to many errors. It's also difficult for government agencies to share information because of incompatible standards. There are automated ways to do this task, which the bill highlights. "Structured data isn't complicated, it's common sense," Issa said.

Because the bill focuses on creating uniform data standards, it would help citizens and businesses to track federal standards. For example, it would require the Treasury Department to set up government-wide standards for federal financial spending disclosures, said Peter Warren, a staffer on the House Committee on Oversight and Government Reform.

House and Senate staffers who do much of the heavy lifting in moving bills forward also expressed confidence that the bill could pass this year. Jonathan Kraden, counsel for the Senate Committee on Homeland Security and Government Affairs noted at the forum that committee chair Sen. Tom Carper (D-DE) and Ranking Member Sen. Tom Coburn (R-OK) will consider the DATA Act at the committee's next business meeting in October.

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