Data Key to Ensuring Pandemic Funding Accuracy

Improved data sharing and analytics are two of the recommendations issued by the U.S. Government Accountability Office on how to increase transparency surrounding the allocation of COVID-19 emergency funding.

Outlined in a new report examining federal agencies’ applications of funding dispersion released by the CARES Act, officials noted several problems with the allocation of federal funds across various public offices, specifically regarding the prevention of misallocation and fraud. 

Among other suggestions, the GAO noted that quality data can help prevent incorrect apportioning of public financial resources. 

The report suggests the “maintenance of timely, reliable spending and other data to support the internal control system” is needed to prevent improper spending. 

Using research methodology, including reviewing federal law, agency documentation and procedures, budgetary data, and other operational information, the GAO was able to gauge if and how clearly agencies could verify the legitimacy of federal funding requests and grants recipients. 

GAO authors posit that improved data collection can in turn improve fraud detection and risk management to ensure COVID-19 relief funding is used and distributed appropriately. 

In one example, the report noted that the Small Business Administration failed to comply with the GAO’s request for Paycheck Protection Program and Economic Injury Disaster Loan information, which prevented the GAO from guaranteeing accountability in the agency’s dispersal of pandemic relief funds. 

Another example was the U.S. Department of Treasury’s incomplete data submission for quality checks on its affiliate site USAspending.gov.

“Quality federal spending data is key for management to help assess whether agencies are meeting program objectives,” the report said. “In addition, providing clear and transparent information about limitations and inconsistencies of data can help users understand the extent to which the data are comparable and reliable.”

GAO authors noted, however, that accurate data reporting is critical for using analytics to prevent financial misappropriation. But access to that data is no longer guaranteed. 

The report said that following the expiration of a provision outlined in the Digital Accountability and Transparency Act of 2014, agency inspector generals and the GAO are no longer required to control data quality reporting and analysis.

Given this, the report strongly advocates timely and accurate data reporting to prevent wasteful public spending. 

“Focusing on fraud prevention can help most effectively manage risks,” the report reads. “Agencies can leverage detective controls, such as through data collection and analysis, to help identify potential fraud more readily and to assist in response and recovery.”