	Much Work Remains to Improve the Quality of Federal Spending Data

		Congress and the Administration Have Acted to Make More Data Available and Accessible

The federal government spends more than $3.5 trillion annually, but data  on this spending lack transparency. Moreover, the data are often  incomplete or have quality limitations. That data are to be available on the  web in machine-readable and open formats. Lastly, to improve the quality of data submitted to USAspending.gov,  the act requires Inspectors General (IG) to assess the completeness,  timeliness, quality, and accuracy of the spending data submitted by  their respective agencies and the use of the data standards. These challenges  relate to the quality and completeness of data submitted by federal  agencies. We found that only between 2  percent and 7 percent of the awards contained information that was fully  consistent with agencies’ records for all 21 data elements we examined. DATA Act Implementation Efforts Under Way Need to Address Known Challenges

		Initial Actions Are Focused on Data Standards, Stakeholder Outreach, and Establishing Plans to Monitor Compliance

Across the federal government, initiatives are under way to implement  key provisions of the DATA Act. In response, Treasury and OMB convened a  data transparency town hall meeting in late September 2014 so the public  could provide input to Treasury officials responsible for developing data  standards. The Treasury IG is leading the IG community’s efforts to  develop a comprehensive framework of audit procedures, in consultation  with us, to ensure IGs meet their auditing and reporting responsibilities  under the act. The act requires us to review IG reports on agency  spending data quality and use of data standards in compliance with the  act, and IGs are to consult with us to assess the completeness and  accuracy of agency data. The first of these issues involves  developing and defining common data elements across multiple reporting  areas. To address this  issue for DATA Act implementation, the DOD and the Department of  Health and Human Services (HHS) are examining data elements used by  the procurement and grants communities to identify financial data  elements common to both communities that can be standardized.assessment focuses on 72 data elements that are linked to five data   Their  areas: (1) identification of award; (2) awardee/recipient information; (3)  place of performance; (4) period of performance; and (5) identification of  agencies. Another related issue is how to enhance data transparency while  protecting individual privacy and national security. Effective Implementation of the DATA Act Would Help Address Ongoing Government Management Challenges and Enhance Oversight

When fully and effectively implemented, the DATA Act holds great  promise for improving the efficiency and effectiveness of the federal  government, and for addressing persistent government management  challenges. Absent this information,  Congress and agencies cannot make fully informed decisions on how  federal resources should be allocated and the potential budget trade-offs. The lack  of program comparability hampers decision makers’ ability to identify  duplicative programs and accurately measure the cost and magnitude of  federal investments. Effective implementation of the DATA Act could also provide additional  data analytic tools for agencies to detect, reduce, and prevent improper  payments. as well as on the 2013 and 2012 Statements of Changes in  It is important to note, however, that since the enactment of key financial  management reforms in the 1990s, significant progress has been made in  improving financial management activities and practices. For fiscal year  2013, almost all of the 24 Chief Financial Officers (CFO) Act agencies  received unmodified (“clean”) audit opinions on their respective entities’  financial statements, up from 6 CFO Act agencies for fiscal year 1996. Addressing Impediments to an Opinion on the Accrual-Based Consolidated Financial Statements

Three major impediments continued to prevent us from expressing an  opinion on the U.S. government’s accrual-based consolidated financial  statements: (1) serious financial management problems at DOD that have  prevented its financial statements from being auditable, (2) the federal  government’s inability to adequately account for and reconcile  intragovernmental activity and balances between federal entities, and (3)  the federal government’s ineffective process for preparing the  consolidated financial statements. We have made numerous recommendations to DOD to address these  financial management issues. because only some of the General Fund is reported in Treasury’s  department-level financial statements. Long-Term Federal Fiscal Challenges

The 2013 Financial Report includes comprehensive long-term fiscal  projections for the U.S. government that, consistent with our recent  simulations, show that while the near-term outlook has improved—absent  policy changes—the federal government continues to face an  unsustainable long-term fiscal path. When  fully and effectively implemented, the DATA Act will improve the  accountability and transparency of federal spending data (1) by  establishing government-wide financial data standards so that data are  comparable across agencies and (2) by holding federal agencies more  accountable for the quality of the information disclosed.
Why GAO Did This Study

The federal government spends $3.5 trillion annually, but data on this spending are often incomplete or have quality limitations. Effective implementation of the DATA Act would help address the federal government's persistent management and oversight challenges by providing for standardized, high-quality data. The DATA Act also will increase the accessibility of data to benefit the public and the business community by requiring, among other things, that data be made available in machine-readable and open formats.
This statement focuses on (1) the condition of information detailing federal spending as reported in our June 2014 report; (2) efforts to date to implement and plan for meeting key provisions of the DATA Act, including potential implementation challenges as well as GAO's plan; (3) the importance of the DATA Act for addressing government management and oversight challenges; and (4) results of GAO's audit of the fiscal year 2013 U.S. government's financial statements, including efforts to improve financial management at DOD.
This statement is primarily based upon our published and on-going work covering GAO's work on federal data transparency, fragmentation, overlap and duplication, improper payments, and government efficiency, effectiveness, and financial reporting.
GAO has made numerous recommendations to OMB, Treasury, and other executive branch agencies in these areas, and this statement reports on the status of selected recommendations.

What GAO Found

GAO's prior work on federal data transparency has found persistent challenges related to the quality and completeness of the spending data agencies report to USAspending.gov. For example, GAO reported in June 2014 that roughly $619 billion in assistance awards were not properly reported. In addition, few reported awards—between 2 and 7 percent—contained information that was fully consistent with agency records for all 21 data elements GAO examined. GAO's work also found that a lack of government-wide data standards limits the ability to measure the cost and magnitude of federal investments and hampers efforts to share data across agencies to improve decision-making and oversight.
The Digital Accountability and Transparency Act of 2014 (DATA Act) was enacted to help address these challenges. Among other things, the DATA Act requires (1) the establishment of governmentwide data standards by May 2015, (2) disclosure of direct federal spending with certain exceptions, (3) agencies to comply with the new data standards, and (4) Inspectors General audits of the quality of the data made available to the public.
Initial implementation efforts are focused on obtaining public input, developing data standards and establishing plans to monitor agency compliance with DATA Act provisions. These efforts include, for example, a data transparency town hall meeting co-hosted by the U.S. Department of the Treasury (Treasury) and the Office of Management and Budget (OMB) to obtain public stakeholder input on the development of data standards, and Treasury Inspector General's efforts, in consultation with GAO, to develop a comprehensive audit framework to assess agency compliance and ensure new standardized data elements are effective once implemented. Effective implementation will need to address key technical issues including developing and defining common data elements across multiple reporting areas and enhancing data transparency while protecting individual privacy and national security.
Effective implementation would help promote transparency to the public and address ongoing government management challenges by expanding the quality and availability of federal spending data. Having better data also will make it possible to gauge the magnitude of the federal investment, help agencies make fully informed decisions about how federal resources should be allocated, and provide agencies and the audit community with additional data analytic tools to detect and prevent improper payments and fraudulent spending.
GAO also reports on its annual audit of the consolidated financial statements of the U.S. government. Almost all of the 24 Chief Financial Officers Act agencies received unmodified (“clean”) opinions on their respective entities' fiscal year 2013 financial statements. However, three long-standing major impediments, including serious financial management problems at the U.S. Department of Defense (DOD), prevented GAO from expressing an opinion on the U.S. government's 2013 accrual-based consolidated financial statements. In addition, while progress has been made to reduce the deficit in the near term, comprehensive long-term fiscal projections, consistent with GAO's recent simulations, show that absent policy changes, the federal government continues to face an unsustainable long-term fiscal path.