Various Challenges Exist from All Angles for the DATA Act

Published: May 03, 2017

Government PerformanceInformation Technology

Ahead of the DATA Act’s May 2017 reporting deadline, the GAO issued two reports detailing the challenges agencies are facing in the quality and implementation of the spending information called for under the legislation.

A government-wide implementation to report congruent spending data, the Digital Accountability and Transparency (DATA) Act, was signed in May 2014 with OMB and Treasury tasked in leading the effort. The legislation requires agencies to have spending data in compliance with the law ready to report on by May 2017. With this impending deadline, the GAO issued two reports centered on challenges in data quality as well as issues in agency readiness and implementation of the DATA Act. 

In a report on the challenges in the quality of data, the GAO found four central issues in agencies implementing the required information under the DATA Act:

  • Internal control weaknesses and other challenges pose risks to data quality
  • Challenges with guidance will impact data quality
  • Limitations exist with data quality assurance processes
  • Efforts to establish a data governance structure are still at an early stage

Of these challenges, three broad areas in challenges were identified under the first point that presented significant hindrances for agencies to report complete and accurate data by May 2017.

Agencies reported problems in internal controls over financial reporting and financial management operations in producing properly accounted balances, transactions and practices. Moreover, aging financial management systems, including system infrastructure and integration issues, presented challenges for numerous agencies. Due to the age of these systems, attempting to pass data through the Data Act broker system to validate the information proved difficult, causing risk and incomplete data.  Lastly, outdated system software, patch management and lack of compliance with internal policies caused risk in security over IT systems. These problems increase the risk of fraud and disruption of financial operation and places the reliability and authenticity of agencies’ data at odds with the mission of the DATA Act.

The following chart provides a list of which Chief Financial Officer (CFO) Act agencies are facing the above mentioned deficiencies:

In an assessment of various Inspector General (IG) Reports on agency readiness for the DATA Act, ranging from June 2016 through November 2016, the GAO found a variation in agency preparedness for the looming deadline. Of the CFO Agencies, 7 IGs found that their agency is able to meet DATA Act requirements; 5 did not specify whether the agency would meet requirements but stated they may face challenges; 2 agencies were not on track to meet Data Act requirements; and 2 agencies would not be submitting complete data by May 2017.

HUD and Interior are the two CFO agencies in which their respective IGs found were not on track to meet the reporting deadline, both citing inadequate IT. For example, a combination of limited resources, differing technologies and data elements, and dated financial systems has prevented HUD from submitting the required data. Interior, on the other hand, was relying on a software upgrade in order to create the files to submit the data. Due to vendor delays, the agency was put well behind 6 months in the DATA Act schedule.

Already declaring incomplete data reporting on time, the Defense Department will use 4 out of the 5 required data files for the May submission. The agency has opted to use 2 out of the 3 six-month extensions provided under the DATA Act in order to develop a system designed to consolidate its transaction-level financial data, with expected readiness by November 2017. The IG reported that Defense is also consistently plagued by inadequate financial statements and unsound mission and operation decisions to further hinder its ability to comply with the law. EPA will not submit complete data by May 2017 due to issues in linking awards data from its financial and procurement systems. Thus, object class and program activity data will be missing from its reported spending.

The below tables are provided from the GAO with the list of CFO agencies and their readiness factor as well as the challenges -predominantly systems integration- in implementing DATA Act requirements according to their individual IGs: 

Despite these quality and implementation challenges, government officials are optimistic about the DATA Act outcomes and what it represents. As reported by Federal Computer Week, Matt Lira, the special assistant to the president for innovation policy and initiatives was cited as stating, “From the perspective of the administration, it's difficult to exaggerate how excited we are about what the Data Act represents in terms of the opportunity to transform government institutions." And as reported by FedScoop, preparations are being made for the reporting ahead of the deadline, including a group of IT professionals working on securing the preliminary data.