Publicly Released: November 10, 2021
Objective
The objective of this audit was to determine whether the DoD complied with Public Law 113-101, “Digital Accountability and Transparency Act of 2014” (DATA Act). We assessed the accuracy, completeness, timeliness, and overall quality of the DoD’s fourth quarter FY 2020 financial and award data submitted for publication on USAspending.gov. We also assessed the DoD’s implementation and use of the Government-wide financial data standards (data elements) established by the Office of Management and Budget (OMB) and the Department of the Treasury (the Treasury).
Background
On May 9, 2014, the President signed the DATA Act into law, expanding the requirements of the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA required the OMB to establish a single searchable public website (USAspending.gov) to disclose information on Federal contract and grant awards to enable members of the public to track how their tax dollars are spent. The DATA Act expands the FFATA by requiring Federal agencies to submit their financial data quarterly, and to link that data to contract and grant award data to enable taxpayers and policy makers to track Federal spending more effectively. OMB and the Treasury developed financial data standards that define the data elements that agencies must report under the DATA Act. Data elements categorize Federal spending information displayed on USAspending.gov.
Federal agencies submit their financial and award data to the Treasury’s DATA Act Broker application, which compiles agency data for publication on USAspending.gov. Agencies are required to use the DATA Act Broker to upload three files containing data from their internal financial systems and records.
- File A – Appropriations Account. File A contains the fiscal year cumulative appropriations account summary data.
- File B – Object Class and Program Activity. File B contains the appropriation account data listed in File A further defined by object class code and program activity name.
- File C – Award Financial or Financial Data for Procurement and Grant Awards. File C contains transaction-level financial data for all procurements and grants processed during the quarter.
The DATA Act Broker extracts spending data from Government-wide award reporting systems that contain data on Federal contracts, grants, and award recipients.
- File D1 – Procurement. File D1 contains procurement award and awardee data extracted from the Federal Procurement Data System-Next Generation.
- File D2 – Grants. File D2 contains grant award and awardee data extracted from the Financial Assistance Broker Submission system on grant and other financial assistance awards.
- File E – Additional Awardee Data. File E contains information extracted from the System for Award Management on the award recipients.
- File F – Sub-award Data. File F contains information extracted from the FFATA Sub-award Reporting System on awards made to sub-recipients under a prime contract or grant award.
Federal agencies are required to designate a Senior Accountable Official (SAO), who is responsible for providing reasonable assurance that the agency’s internal controls support the reliability and validity of the data reported for publication on USAspending.gov. The Under Secretary of Defense (Comptroller)/ Chief Financial Officer, DoD, designated the Deputy Chief Financial Officer as the DoD SAO.
Findings
The DoD did not comply with all DATA Act requirements. Although the DoD implemented and used the Government-wide data standards and the DoD SAO certified the DoD fourth quarter FY 2020 DATA Act submission by the DoD deadline, some data elements included in the submission were not accurate, complete, or timely. Specifically,
- File A included variances because the Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, officials manually removed data from File A to match File B to prevent an error that would block submission of Files A and B;
- File B was not complete because an internal DoD system was unable to generate File B data;
- File B contained 1,645 transactions with an inaccurate object class code because the DoD intentionally used a code not in OMB Circular No. A-11;
- File B contained 188 transactions with an inaccurate program activity name or code because the DoD did not submit timely new or revised codes to OMB MAX Collect; and
- Files C, D1, and D2 projected error rates were 6.5 percent for accuracy, 0.7 percent for completeness and 13.6 percent for timeliness. The errors were primarily attributable to errors in the File D1 submission and were the result of information being improperly input into the Federal Data Procurement System‑Next Generation.
Furthermore, of the 21 reported coronavirus disease–2019 (COVID-19) outlays we reviewed, none of them used COVID-19 supplemental funding. According to the Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, the automated process used to generate the Disaster Emergency Fund Code to report COVID-19 supplemental funding from the CARES Act contained an error. In addition, the DoD Data Quality Plan was not updated before the fourth quarter FY 2020 submission to address the new reporting requirements related to reporting the Disaster Emergency Fund Code for outlays in the File C submission.
Based on the calculation required by the “CIGIE FAEC Inspectors General Guide to Compliance under the DATA Act” (CIGIE Guide), the overall quality of the DoD data was in the “moderate” range. Although the quality of the financial and award data that the DoD submitted for the fourth quarter FY 2020 had improved when compared to the DoD’s DATA Act submission for the first quarter of FY 2019, the DoD’s DATA Act submission on USAspending.gov cannot be fully relied upon. The moderate quality of the data submission does not allow taxpayers and policy makers to track Federal spending effectively and undermines the DATA Act objective of providing quality and transparent Federal spending data published on USAspending.gov.
Recommendations
We recommend that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, update the DoD’s DATA Act Data Quality Plan to include a process for documenting and disclosing changes to any DoD DATA Act submission, including the removal of any information from data elements as well as changes related to exceptions and errors received from the DATA Act Broker, in the monthly and quarterly DATA Act submissions certification comments in the DATA Act Broker.
We also recommend that the Defense Pricing and Contracting Principal Director review the data element error rates as presented in this report, identify controls to improve the accuracy and completeness for the data elements, and revise the Procurement Data Improvement and Compliance Plan to include those controls.
Management Comments and Our Response
The DoD Deputy Chief Financial Officer, responding for the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, and for the Defense Pricing and Contracting Principal Director, agreed with the recommendations. We will close the recommendations once we verify that the agreed upon actions are complete.
This report is the result of Proj. No.D2021-D000CS-0039.000.