Accountability, Transparency, &
Integrity In Government
Improving the Digital Accountability and
Transparency Act, H.R. 2146 IH
Volume I Summary
July 20, 2011
Transparency, Accountability, & Integrity In Government
Improving the Digital Accountability and
Transparency Act, H.R. 2146 IH
Volume I Summary
Table of Contents
Purpose:........................................................................................................................................... 3
Background: .................................................................................................................................... 5
Results to be Achieved in Brief:................................................................................................... 6
Principle Findings: ........................................................................................................................ 7
Exhibit 1 Data Act Modifications and Enhancements Overview .............................................. 9
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Volume I Summary
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Transparency, Accountability, & Integrity In Government
Improving the Digital Accountability and
Transparency Act, H.R. 2146 IH
Volume I Summary
Purpose:
Over the past decade, Federal financial management has encountered severe impacts related
to deficit spending, federal debt management, unemployment, and accountability,
transparency & Integrity in Government financial accounting, reporting, and analysis. In
response to meeting the foregoing challenges, legislation has been enacted that has increased
spending levels and implemented new accountability and transparency regulations to
stimulate economic growth. Unfortunately, the results achieves have been: 1) an increase in
unemployment from 4% to 9.2% labor rate, 2) increase in the Public Debt of $7.9 Trillion,
outstanding of Federal Social Insurance Liabilities of $43 Trillion (closed group current
participants, 3) increase in the cumulative deficit of to $1 Trillion for Fiscal Years 2009,
2010, & 2011 over surplus and deficits recorded for each of the Fiscal Years 2000 - 2008,
and 4) implementation of three new websites, USASpending.gov, Data.gov, and
Recovery.gov that present different viewpoints of the spending and are inconsistent with
one another regarding reporting expenditures verses obligations, are in disagreement with
federal accounting principles and standards, and Official Department of the Treasury
accounting and reporting results published in the United States Combined Statement of
Receipts, Expenditures, and Balances of the United States in accordance with Article 1,
Section 9, Clause 7 of the Constitution and the Budget and Accounting Procedures Act of
1950, 31USC3511-13. The below chart presents historic impacts for the above financial
management indicators.
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Department of the Treasury, Bureau of the Public Debt
Public Debt Outstanding
Source: Bureau of the Public Debt, Historical Debt Outstanding
Office of Management and Budget
Historical Budget Table
Source: Office of Management & Budget, Historical Tables – Page 26
The Congress, Executive Branch regulators, and the Public are concerned that although
attempts have been made to improve accountability, transparency, and integrity in
government much needs to be accomplished to further improve the foregoing in order to
provide consistent information, at both summary and detail data levels and as well provide
access to as both structured and unstructured data that can be used for financial analysis to
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improve financial management decision making.
To this end, on June 13, 2011, Representative Darrell Issa, Chairman of the House
Committee on Oversight and Governmental Reform introduced House Bill H.R. 2146,
Digital Accountability and Transparency Act of 2011 “To amend title 31, United States
Code, to require accountability and transparency in Federal spending, and for other
purposes.”
This document presents a brief summary of modifications and enhancements that can be
incorporated into H.R. 2146 Bill to further improve the Bills’ objectives. These modifications
represent enhancements that provide for consolidating Federal financial management
accounting and reporting responsibilities into a new Independent Agency that supports the
requirements of: Article 1, Section 9, Clause 7 of the United States Constitution, the
Budget and Accounting Act of 1921, and the Budget and Accounting Procedures Act of
1950. By incorporating these modifications into the Data Act, the new Independent
Agency envisioned by the Act will provide for a single repository of Federal financial
management data, authority to promulgate Federal accounting and reporting policies and
procedures, and prepare and publish Official consolidated Federal financial results of the
United States Government on the cash and accrual basis. In addition the proposed
modifications will eliminate the duplication of reporting produced by financial reporting of
the Executive Branch Department of the Treasury, Office of Management and Budget,
Federal Departments and Agencies, and the Accountability and Reinvestment Act Recovery
Board and Legislative Branch Congressional Budget Office and Government Accountability
Office.
Background:
The modifications and enhancements to the Data Act propose to establish the Federal
Financial Management Board as a new Independent Agency extending the tenure of the Data
Act’s original Federal Accountability and Spending Transparency Board that effectively
established another competing Financial Reporting Entity in addition to the Official
financial management results reported by Department of the Treasury, Financial
Management Service. The new Board authority is also enhanced by:
1) consolidation of several additional existing Departments and Agency entities
including: a) the Office of Management and Budget (OMB) Office of Federal
Financial Management (OFFM), b) Department of the Treasury, Financial
Management Service (FMS) Governmentwide Accounting and Reporting (GWA)
entity, and c) Financial Literacy and Education Commission,
2) requiring the Board Chairperson to be: a) either a Certified Public Accountant
(CPA) or Certified Government Financial Manager (CGFM) and b) to be appointed
for single 15 year term in office, and
3) authorizing the Chairman of the Board to hold the title of Chief Financial Officer
and Controller of the Federal Government.
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In additions, the following modifications and enhancements have been identified regarding
additional Board’s “functions” that include management of:
1) a “Single Repository” of consolidated Federal financial information system
supporting: a) the Treasury Governmentwide Accounting system, b) all Agency
Core Accounting system financial data, c) Government Accountability Office (GAO)
and Executive Branch Agency financial audit, performance, and Inspector General
investigation reports, and d) Legislative Branch authorization and appropriation
legislation, including related committee and conference reports, testimonies, and,
oversight reports;
2) the single official source of Federal financial reporting on the cash & accrual
basis;
3) a single source of Federal financial regulations regarding accounting and reporting
processes,
4) a new function for central financial analysis and related reporting that is also
coordinated with the reporting of the Congressional Budget Office, and
5) a central financial management education program that can work with private sector
colleges, universities, and other education organizations to improve the public and
private sectors understanding of Federal financial management and to produce future
Federal financial management entry level employees and executive leadership for the
public and private sector.
Results to be Achieved in Brief:
The foregoing modifications and enhancement to the Data Act will improve accountability,
transparency, and integrity in the Federal Government by:
1) Accountability: Reporting federal financial transactions in a timely manner, with
accuracy of data being reported, and efficiently and effectively reducing system
maintenance costs. Providing education to public sector journeymen and managers
to properly understand financial management requirements to speed processing,
provide capabilities for managing system changes, and improving financial security
through understanding of internal control requirements.
2) Transparency: Implementation of a single source of Federal financial management
data to reduce redundancy of operation and related costs and to offer to the public
and private sector access to detail financial transaction data to be able to analyze
financial data to improve decision making capabilities.
3) Integrity: Provide consistency in terms of accounting and reporting policy,
procedures, and regulations, establishment of data standards for data element
definitions, establishment of Information Technology eXtensive Markup Language
(XML) and eXtensive Business Reporting Language (XBRL), and establishing a
single point for maintaining a single repository for Federal financial management
information.
The foregoing functions will enhance the current Data Act requirements related to by
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establishing standard taxonomies and consolidating the multiple financial reports of the
following organizations: 1) Recovery.gov, 2) USASpending.gov, 3) Data.gov, 4)
FPDS and 5) FAADS with the Official Federal financial reports of Board’s
Governmentwide Accounting and Reporting (GWA) systems that will be transferred
from the Department of the Treasury. In addition the new consolidated Financial
systems of the Board will also produce agency financial statements to insure
consistency in reporting from a single source of Federal financial data that will: 1)
eliminate intragovernmental receivable and payable differences, 2) reduce improper
payments, 3) reduce operating cost, 4) use information technology and eXtensible
Markup Language (XML) and eXtensible Business Reporting Language (XBRL)
capabilities, and 5) consolidate and reduce the number of Federal budget and
accounting systems that are financial management apolicy goals of OMB and Budget
and the Department of the Treasury.
Finally, in addition to the foregoing actions and functions, the new Independent Agency will
also provide the central financial leadership for:
1. the Chief Financial Offices Council that is currently the responsibility of the OMB
OFFM Controller that is being transferred to the new Independent Agency,
2. Joint Financial Management Improvement Program (JFMIP) and Federal Accounting
Standards Advisory Board (FASAB), and
3. work with the Government Accountability Office and Office of Management and
Budget in relation to the foregoing and the functions of the former JFMIP that was
terminated by OMB in 2010 are reinstated under the management of the Federal
Financial Management Board’s Chief Financial Officer and Controller who will also
act as the Chairman of the JFMIP.
The foregoing enhancements effectively returns Federal financial management leadership to
the original management structure established by the Constitution, Article 1, Section 9, Clause
7, the Treasury Act of 1787, the Budget and Accounting Act of 1921, and the Budget and
Accounting Procedures Act of 1950, 31USC 3511-3513 that are discussed in the Volume II
Detail document that supports the Digital Accountability and Transparency Act Volume I
Summary document and the modified Data Act contained in Volume III, although not
assigned to the Department of the Treasury.
Exhibit 1 below presents an overview of the foregoing Data Act Modifications and
Enhancements. The modified and enhanced Data Act is contained in Exhibit 2 of this
document.
Principle Findings:
The proposed results produced by enacting the Data Act without modification will provide
another layer of duplicative financial reporting that is not synchronized with the Official
financial results of the Federal Government. In addition, the results produced by the
Recovery.gov, USASpending.gov, and Data.gov websites do not provide a consistent
accounting base for the websites reported financial results or provide for the transfer of
consistent financial management knowledge to future public and private sector financial
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managers and analysts. These risks ultimately impact critical decision making regarding
identifying expenses and investments as well as identifying sources of funding that will be
used to meet the foregoing expenditure/spending requirements of the Federal Budget.
A solution Federal financial management solution is presented below is a processing flow
diagram that illustrates the various data component that can be “ingested” into a single data
repository that can manage structured, semi structured and unstructured data. All of the
identified data elements are available today and many are maintained in an XML technology
form required to support the illustrated data to be maintained by the server.
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Exhibit 1
Data Act Modifications and Enhancements
Overview
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