The DATA Act: What it Means and How Agencies Can Prepare

February 4, 2014 5:00 am PST | Data as a Service, Effective Governing
Socrata Joins Data Transparency Coalition

By Hudson Hollister


The first time I tried to persuade Congress to move open data legislation was in early 2010. I was a staffer serving the House Oversight Committee, and my boss, Rep. Darrell Issa (R-Calif), hoped to transform federal grant reports from disconnected documents into open data. The majority of congressional staffers I spoke with didn’t even know what we meant by “data standards.”

But today, the idea that federal data should be consistently standardized and published is at the heart of the Digital Accountability and Transparency Act, or DATA Act. The House of Representatives recently passed the DATA Act by an overwhelming vote: 388 votes to one, and we expect the Senate to follow suit soon.

The DATA Act

First, a bit of background. The DATA Act does three main things.

1) It requires the Treasury Department to establish government-wide, machine readable data standards for federal spending.

2) It directs all the agencies to apply those standards.

3) It instructs the Treasury to publish the whole corpus online.

Some of the same staff members I first met in 2010, and the Senators and members of Congress they serve, are now champions of open data and the DATA Act.

Turning the Tide of Open Data

What explains this shift in understanding? People working on Capitol Hill are now familiar with the basics of open data. Although the terminology they use overlaps – data transparency, open government, open data – the need for comprehensively publishing government data for citizens’ use, encoded in machine-readable standard formats that make it useful, is obvious. The DATA Act’s success makes it clear that lawmakers and their staffs are listening.

Despite this shift on Capitol Hill, open data has a long way to go. President Obama released his Open Data Policy in May 2013, but we are still far from having the principles of the policy applied to the most important areas of the federal government’s data portfolio: federal spending, regulatory reporting and compliance, legislation, and judicial materials. So why can’t the President simply declare federal data open and command the agencies to make it so? The complexity of federal spending data provides an instructive example.

For over three years, I’ve been working to persuade the federal government to standardize and publish all its spending data. This includes financial statements and account information reported to the Treasury Department, also payment requests submitted to the Treasury, budget actions to the Office of Management and Budget (OMB), grant summaries to the Commerce Department, and contract summaries to the General Services Administration. The spending paper trail is complex, with multiple reports flowing separately to multiple entities. It could take a whole career to figure out how this data should be published and structured.

And very few people have such a career. Even within a single agency, unless that agency employs a chief data officer, it is nobody’s responsibility to trace the spending paper trail. And government-wide, no one entity – not the Treasury, OMB, or anyone else — has the authority to publish searchable, structured spending data covering the whole complex structure.

Other areas of the federal government’s data portfolio are similar. Throughout regulation, legislation, and the judiciary, just like in spending, open data is nobody’s job.

Filling the Gap

I’m optimistic that this gap will be filled. Because of the work of certain members of Congress, nonprofit watchdogs like the Sunlight Foundation, and the tech companies supporting the Data Transparency Coalition, there is, for the first time, a real chance we could get both a government-wide mandate for open data in spending and the leadership that will be necessary to fulfill the mandate. The DATA Act doesn’t just declare that spending data should be standardized and published. It makes the transformation of open data somebody’s job: namely, the Treasury Department’s.

Whether the current incarnation of the DATA Act ultimately becomes law or not, the trend of opening data isn’t going away. In December 2013, the Treasury Department told an audience at our Data Transparency Breakfast that the department intends to standardize and publish federal spending data whether Congress passes the DATA Act or not. Our Coalition will seek further mandates across regulation, legislation, the judiciary, and more. President Obama’s Open Data Policy, for the duration of his term in office, will empower advocates, inside and outside the agencies, to insist on better data standards, more publication, and incremental progress.

Always Be Prepared

There are three ways government agencies can best prepare for these changes:

1) Identify data compilations, map information flows. The first step toward open data is to figure out exactly what data an agency collects and generates, map out its flows, and identify where aggregations are imposed. (Hint: The better an agency is at open data, the fewer aggregations there should be. Summaries are on their way out.) A comprehensive data inventory is required in the President’s Open Data Policy; last summer the Office of Science and Technology Policy confirmed that the data inventory must include everything. Everything is a tall order; an agency has to start somewhere. Given the prospects of the DATA Act, it might be easiest to start with data related to spending (financial reporting, budget actions, grants, and contracts), and later move on to compilations related to performance, regulation, management, and other areas. Too often, this work is nobody’s job, which is why every agency needs a chief data officer.

2) Communicate with reporting domain leaders. Agencies should engage with the offices of the executive branch that are in charge of government-wide information reporting. For spending data, this includes the Treasury, OMB, Commerce, GSA, and others. Should the DATA Act pass, authority over the data standards for all spending reports will be centralized within the Fiscal Service at the Department of the Treasury. A proactive agency should already be reaching out to the Fiscal Service’s data transparency team! For domains other than spending, agencies should engage with OMB (performance), OMB’s Office of Information and Regulatory Affairs and the Archives’ Office of the Federal Register (regulatory reporting), Treasury’s Office of Financial Research (financial regulatory reporting), and others – always with a view toward helping those offices transform disconnected documents into standardized data.

3) Engage with open data experts. Open data experts can advise an agency how to approach this work. They can recommend solutions and platforms that will work with legacy systems — so there will be no need to swap out systems or hire a brand new IT staff. Our Coalition often points to private-sector experiences to illustrate this point. For instance, when Microsoft chose to adopt the eXtensible Business Reporting Language (XBRL) as a common format for all of its internal financial reporting, across hundreds of subsidiaries in scores of countries, it accomplished the transformation without replacing any of its existing financial management systems. Compared to the massive cost and dislocation of replacing legacy IT systems, the assistance of an expert like Socrata is cheap and non-disruptive.

Breaking Down the Benefits

The faster an agency prepares to open its data, the sooner that agency will see the benefits. Our Coalition categorizes those benefits thus: (1) improved democratic accountability, (2) better internal management, and (3) automated compliance. These benefits are easy to trace for spending data, and I’m sure you can analogize to other areas of the federal government’s data portfolio.

First, once spending data is consistently standardized and published, it’ll be easier for citizens to hold government accountable. Today it’s impossible to match a particular grantee or contractor to the payments it received, track a program’s internal spending on salaries alongside its external grants and contracts, or trace money from congressional appropriation through agency obligation to final disbursement. Government-wide data standards, coupled with government-wide publication of the whole corpus of federal spending, will make those analyses possible and give citizens and watchdog groups new tools to understand – and question – what their government is doing.

Second, open data can help agencies pursue their missions more effectively because it enables better management. Today, agency leaders cannot navigate from bottom-line finances to detailed transaction information without expensive, disruptive data calls. They cannot deploy analytics to automatically detect indicators of fraud and waste without at least some transformation and extraction. They cannot easily compare their dealings with contractors and grantees with other agencies’ experiences. Government-wide data standards for spending will change that.

Third, government-wide data standards for grant and contract reporting will allow grantees and contractors to configure their existing business software to generate required reports automatically. Some grantees know this firsthand already: under the 2009 federal stimulus law, the Recovery Accountability and Transparency Board created a government-wide format for grant reports, and software allowed state governments and their sub-grantees to handle the quarterly reporting process in five minutes, with a single click.

The bottom line: the federal open data movement is gaining momentum, no matter what happens with the current incarnation of the DATA Act. That momentum is a good thing – for citizens, for grantees and contractors, and for the government itself.


Hudson Hollister

Hudson Hollister is the founder and Executive Director of the Data Transparency Coalition. Prior to founding the Data Transparency Coalition, he served as counsel to the Committee on Oversight and Government Reform of the U.S. House of Representatives and as an attorney fellow in the Office of Interactive Disclosure at the Securities and Exchange Commission. Before his government service, he was a securities litigator in the Chicago office of Latham & Watkins LLP.

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