Management & Labor

The Future of Federal Spending

A slew of different players are considering major changes to how federal spending is tracked and all of their efforts will likely impact state and local governments.
by , | February 2012

A slew of different players are considering major changes to how federal spending is tracked, and all of their efforts will likely impact state and local governments.

In December, a new body called the Government Accountability and Transparency Board (GATB), which consists of inspectors general and other top federal officials, published a report calling on the feds to develop a “succession plan” for how they will expand the Recovery Act’s reporting requirements. Its chief recommendation was a centralized system to monitor spending and improve data collection across all agencies in an effort to reduce fraud and waste. It also calls for the government to improve the way it displays spending data and to finally develop unique identification numbers for federal awards, which would help track spending across agencies. “The recommendations weren’t meant to be middle of the road, but [to] really effect some sort of positive change,” says Ross Bezark, GATB’s executive director.

In October, a new council was created to help oversee the best way to report and track federal grants. The first new notice on grant procedures could be issued this spring. Last summer, Republican Rep. Darrell Issa of California and Democratic Sen. Mark Warner of Virginia introduced the DATA Act, which would replace the 2006 law that created USASpending.gov with a new framework that draws on lessons learned from the stimulus. The legislation would create a single standard for recipient reporting of federal money and require that funds be reported directly to an independent database, much in the same fashion as the Recovery Act. To help watchdogs identify waste, the plan would also create a mechanism for syncing up each agency’s expenditure data to the corresponding recipient reports. It’s been endorsed by Earl Devaney, the widely respected former chair of the recovery board.

One concern states and localities have with the DATA Act is that it doesn’t necessarily require a central data portal, though it strongly encourages one. Without those teeth, state advocates argue, they could still be required to report data to multiple agencies. They’re also asking that the proposal be tweaked to allow them to set aside a portion of the federal funds they receive to cover the costs of IT systems and administrative work that will be required to fulfill the expanded reporting requirements. Groups like the National Association of State Budget Officers have met with congressional staff to discuss those concerns. But neither chamber is moving quickly on the DATA Act, which has become a casualty of a legislative session dominated by ongoing budget debates. At a time when Washington is so focused on spending cuts, the act’s price tag could be an obstacle. The Congressional Budget Office has estimated the cost at $575 million through 2016, but Bezark and others say there’s no way it will actually cost that much.

Meanwhile, the advocacy community has its own concerns about the legislation. Officials from OMB Watch, the nonprofit that helped drive the creation of USASpending.gov, are worried about a provision within the DATA Act that would allow it to sunset in 2018. As the group has said, “It is a bad idea to repeal a permanent law and replace it with a temporary law.”

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