DATA Act Passes in the House—Here’s What It Means for Grant Recipients

Capitol BuildingToday, the U.S. House of Representatives unanimously passed the Digital Accountability and Transparency (DATA) Act.

This, in conjunction with the Senate’s unanimous approval on April 10, means the bill will now make its way to President Obama whose signature is expected.

The bill’s signing would be a giant step forward for government transparency, opening up federal spending data that was once locked behind disparate systems and formats. Government agencies, grant managers, congressional appropriators and inspectors general would have the data necessary to do their jobs better, and taxpayers and watchdogs would gain clarity into how funds are used.

In the words of Michael Wood, former executive director of the U.S. Recovery Accountability and Transparency Board: "The DATA Act is designed to provide the public with greater transparency on spending. Its emphasis on data standards, quality data, and more effective and less duplicative reporting should be positive for the grant community.”

In this post, we outline next steps and implications, as they relate to grant managers.

DATA Act Implementation Timeline

After the president signs the DATA Act into law, the Treasury Department and the Office of Management and Budget (OMB) will begin creating the data standards necessary to regiment grantee and contractor reporting, and enable the online publishing of data. They have one year to review what’s currently being reported, generate consistent formats and identifiers for that information, and solicit public comments.

Once that is complete, agencies have two years to implement the data standards into the information they report to the Treasury, White House, and government-wide grant and contract databases. The standards will apply on a mandatory basis to grantee and contractor reporting requirements only after OMB conducts a pilot program. However, agencies can voluntarily choose to adopt standards before they are mandated.

The Impact on Grant Recipients

So, how does agency adoption of data standards for grant and contract reporting impact grant recipients? According to Hudson Hollister, executive director of the Data Transparency Coalition, at first, recipients may see little-to-no change. Agencies may set up processes to take existing PDFs and spreadsheets, and manually translate that information into required data formats, or simply request that information be shared via a web form instead of email.

For those that use grant management software, standards would also allow compliance automation pretty early on. Internal reporting systems will be able to sync directly with those of the agencies who provide funds.

Farther down the road, Hollister explained, there may be a single portal for reporting by grantees and contractors to the U.S. government. The aforementioned pilot program will test the effectiveness of consolidated grant and project reporting.

When this happens, grantees will see big benefits, in that they will submit information to a centralized location, instead of to multiple government agencies. Again, grant management software could automate this process on the recipient end.

Keep in mind: the information collected will remain the same. It will just be gathered in more efficient ways. According to Wood, “The DATA Act’s strong push toward the use of machine readable data and its reporting pilot will provide information to ease the burden for those filing reports for both contracts and grants."

Hollister adds: “Be proactive about this. Processes are going to have change, but that change is good because it will make your existing processes more efficient, and it will simultaneously be better for management and taxpayers.”

The Early Mover Advantage

The technology is already available to employ big data analytics and compliance automation once standards are in place. Therefore, while the DATA Act will take several years to execute, proactive grant recipients can reap the benefits much sooner. By implementing grant management software now, organizations will be able to automate reporting as soon as new data standards are released—much earlier than others.

As Hollister explained, “Any grantee or contractor that invests in systems to connect financial reporting to grant or contract reporting will see that investment repaid once DATA Act standards are in place.”

With improved reporting coming down the pike, it’s never too early to position your organization to efficiently maintain compliance and build capacity. 

What steps are you taking in the wake of the DATA Act? What excites or concerns you? We’d love to hear from you in the comments!

For additional background information on the DATA Act, download our whitepaper

 Grant Reporting Whitepaper

Image Source: Cliff via Flickr