4 Possible Agency Responses to the DATA Act

Demek Adams is a partner at Grant Thornton and a member of the board of directors of the Data Foundation. Hudson Hollister is the founder of the Data Foundation and the Data Coalition.

The federal government’s new era of financial management is now six weeks old.

On May 9, the DATA Act’s main deadline arrived. Every federal agency began reporting spending information to the Treasury Department using a new data format.

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The new format—known as the DATA Act Information Model Schema, or DAIMS—provides a durable framework that creates, out of many agencies’ spending details, one picture. Once all the agencies provided information encoded in the DAIMS, Treasury combined their submissions to publish a single, unified data set representing all of the executive branch’s spending.

In 1802, President Thomas Jefferson was the first to call for the government’s finances to be brought into “one consolidated mass,” so Congress and the people could “comprehend them … investigate abuses, and consequently … countroul [sic] them.” 

Two hundred and fifteen years later, our government has finally managed to do that.

Treasury’s new spending data portal shows every expenditure account, tracks that account’s balances, and electronically connects that account with the grant and contract awards for which it is used.

For example, explore how the new website breaks down balances, categories and awards of the Environmental Protection Agency’s $2.3 billion grant assistance account. For the first time, even a nonexpert can “comprehend, investigate, and countroul” this important public spending information.

Federal agencies, especially chief financial officers, have worked very hard to bring us to this point. Assembling spending information together, rolling it up from the sub-agencies, translating it into the DAIMS, matching accounts to their corresponding grant and contract awards, submitting data files to Treasury with the required characteristics—all of these new tasks require our systems to do things they were not originally built to do.

We’ve noticed agencies have responded in four ways:

1. Non-compliance. A few agencies have failed to submit some of the required information. The Defense Department still has not submitted the crucial data file that links its accounts to its awards. Non-compliers may justify their failure by pointing to their uncommon hurdles. But non-compliers are going to face political, public and regulatory scrutiny. That scrutiny will be justified.

2. Compliance. Many agencies have used manual processes to assemble and translate their spending information, and successfully managed to submit the right data files before the DATA Act’s big deadline last month. Compliers divided and delegated the work to decentralized teams. Compliers may have met the first requirement by investing long hours and issuing special data calls, but if they keep doing DATA Act work manually, it will strain their organizations in the long run. They will not have any time or energy left to use DATA Act data for decision-making, as Congress (and Jefferson) intended.

3. Communication. Some agencies, realizing the DATA Act is here to stay, built more durable, automated processes centralized within the organization. They consulted the prospective users of their spending information—internal management, Treasury, Congress and the public—to learn how standardized data can be made most useful. Communicators won’t just avoid scrutiny and strain. They will have the time and resources to employ the new data sets for their own benefit.

Building automated processes and reaching to data users required an additional investment, to be sure. Communicators expect a return on that investment: better analytics and better decisions.

4. Leadership. A few agencies have not just automated DATA Act compliance. They have already plugged the new data into analytics modules. Leaders like the Small Business Administration and the Commerce Department standardized their spending data well before the DATA Act deadline, and have been helping other agencies learn how to use their own data to support decision-making.

Congress intended the DATA Act to be more than a compliance exercise. Modern organizations need instant access to their operational information as standardized data, not disconnected documents.

Even in these early days, we’ve heard, over and over, that the first reporting exercise has helped agencies uncover inconsistencies that should have been corrected anyway.

The DATA Act’s new reporting process will eventually become the main way, and then the only way, your agency reports its spending. In time, the DAIMS will not just bring together spending data, but performance metrics and grant reports and payments too.

So what is your agency’s response to all this?

It is still possible to leap from the non-complier or complier level up to the communicator or leader level. In fact, it is not that difficult.

Integrate the production and the consumption of standardized spending data into your systems. Connect your financial professionals with analytics experts and get them talking to each other. Communicate with the users inside and outside your agency. Read what the Data Foundation publishes. Attend this week’s DATA Act Summit to learn what other agencies are doing.

By becoming a DATA Act leader, your agency won’t just comply with a mandate and support transparency. As Jefferson predicted 215 years ago, your finances will become “as clear and intelligible as a merchant’s books.”

Like the private sector is doing already, your agency will be able to leap ahead with data analytics, solving stubborn problems and defeating difficult decisions.