Finance

Federal Spending May Become More Transparent

Congress is calling for USASpending.gov to be replaced with a site that allows states and localities to report their earnings themselves.
by | August 2011

USASpending.gov started with promise. Created by bipartisan legislation in 2006, the site was intended to bring an unprecedented level of transparency to federal spending. The idea was that a single, simple, searchable database could give the public a clear picture of how taxpayer money is spent.

But that’s not exactly how it panned out.

The Sunlight Foundation, which advocates for transparency in government (and occasionally contributes to Governing.com), says the site is enormously flawed. At one point, the nonprofit identified nearly $1.3 trillion in spending on the website that was either late, incomplete or inconsistent. In one case, the site failed to report $9 billion worth of school lunch grants. In another, $340 million in firefighter grants was misreported due to a typo. The transparency portal, says Sunlight Executive Director Ellen Miller, is “almost completely useless.”

Now a bipartisan group of legislators is hoping to create a new website intended to try, yet again, to shine some light on federal spending. The bill, sponsored by Republican Rep. Darrell Issa and Democratic Sen. Mark Warner, would repeal the legislation that created USASpending.gov. In its place would be a framework based on the unique transparency requirements affiliated with the stimulus bill. That reporting system, which posts spending data at Recovery.gov, hasn’t been flawless -- who can forget the debacle over stimulus funds reportedly spent in nonexistent congressional districts? -- but it’s widely been viewed as a vast improvement.

Much like Recovery.gov, the proposed system would require self-reporting from the recipients of federal spending. That system would allow watchdogs to compare expenditures reported by federal agencies to data reported by recipients, and to identify discrepancies that may indicate fraud or waste.

But such a system could cause some headaches for state and local governments. Cornelia Chebinou, director of the Washington, D.C., office of the National Association of State Auditors, Comptrollers and Treasurers, says the reporting requirements would likely place added burdens -- including extra costs -- on state and local governments that receive federal funds. Chebinou, who has met with Issa’s staff to discuss the bill, said some of the additional reporting may also prove redundant for states and localities, since they already report back to federal agencies the details of some federal funding they receive.

Craig Jennings, director of federal fiscal policy at OMB Watch -- the nonprofit whose work helped lead to the creation of USASpending.gov -- says that if the bill requires changes to state financial reporting systems, the federal government should pay for it. Right now, though, there are no plans for extra federal aid.

There’s another positive upshot of revamping the way federal spending is reported: It could make the process much less political. The Sunlight Foundation, for example, has reported that the Office of Management and Budget (OMB), which runs USASpending.gov, has denied requests for its own internal reports on the quality of the data. That’s likely because in addition to managing the federal government, the OMB is also tasked with the more political task of implementing the administration’s policies, and negative publicity could undermine that effort.

Jennings’ organization opposes Issa’s bill because it sunsets in 2018. Since it also repeals the law creating USASpending.gov, the public would be left without any transparency site if Issa’s plan isn’t reauthorized by lawmakers in the future.

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