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Billions of Dollars in Federal Spending Not Reported

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A Government Accountability Office (GAO) audit from June found that federal agencies failed to report nearly $619 billion in grants, loans, voucher programs, and other forms of federal assistance to USAspending.gov during fiscal year 2012. In other words, nearly one-quarter of the $2.6 trillion spent on federal assistance that year went unreported.

The GAO report, titled Data Transparency: Oversight Needed to Address Underreporting and Inconsistencies on Federal Award Website, found that although agencies generally reported required information for government contracts, they did not properly report information on grants and other federal assistance. This federal spending information is supposed to be reported to USAspending.gov, a website created in 2007 by the Office of Management and Budget (OMB) to bring transparency to government spending. As of January 2013—two months after the deadline for reporting fiscal year 2012 awards—agencies had not properly reported 342 programs, 27 of which belong to the Department of Health of Human Services (HHS) totaling $543 billion. Another 5 assistance awards totaling $64 billion went unreported by the Department of Veterans Affairs (VA). In total, failed reporting by HHS and the VA make up 98 percent of the missing $619 billion in assistance awards spending. The GAO was not able to break the $619 billion down into discrete spending categories.

Further, the audit found that few federal assistance awards or contracts were reported with all the required information, which includes the award amount, program source, and the desired purpose of program funding. Some agencies claimed not to know what to report, while others ignored the instructions entirely. The GAO found that fewer than 7 percent of the awards had information “fully consistent” with agencies’ records. (To find the missing awards information data, GAO researchers consulted the Catalog of Federal Domestic Assistance and the Public Budget Database.)

The DATA Act, which was signed by President Obama in May, requires the Department of the Treasury and OMB to transform federal spending from “disconnected documents into open, standardized data, and to publish that data online.” Additionally, the DATA Act transfers full oversight of USAspending.gov from OMB to the Treasury. The Project On Government Oversight supported the DATA Act and thinks it will add much-needed clarity to federal spending, starting with the budget process and ending with the actual outlays.

Many Members of Congress, including Senators Tom Carper (D-Del.), Rob Portman (R-Ohio), and Mark Warner (D-Va.)—who are all co-sponsors of the DATA Act—were unhappy to learn of USAspending.gov’s failure to provide full and accurate data and OMB’s failure to properly oversee the accuracy of the site. Senator Tom Coburn (R-Okla.), who, along with then-Senator Barack Obama (D-Ill.), was an original sponsor of the Federal Funding Accountability and Transparency Act that called for the creation of USAspending.gov in 2006, was particularly displeased.

“This complete failure in spending transparency hurts our ability to assess the pros and cons of how Washington spends tax dollars,” said Coburn in a press release. “It is disappointing that the federal bureaucracy is so vast and unaccountable that the Administration cannot enact the president’s signature accomplishment as a senator requiring the government to disclose how and where it spends money. Without transparency there can be no accountability.”

In order to improve the accuracy of information on the USAspending.gov website, GAO recommends that OMB, before transferring authority to the Treasury, 1) clarify guidance on reporting federal assistance award information and maintaining support records and 2) develop a government-wide oversight process to regularly assess the consistency of information reported to the site. OMB spokesman Jamal Brown told USA Today that the Administration is already working to improve the accuracy of data following the passage of the DATA Act last year. “OMB is committed to federal spending transparency and working with agencies to improve the completeness and accuracy of data submissions,” he said.

A great deal of effort is dedicated to contract oversight and rightfully so, since in FY 2012 the government awarded over $518 billion in contracts. However, in the same year, the government awarded $541 billion in grants, in addition to the trillions of dollars awarded through other forms of federal assistance. More needs to be done to hold agencies accountable for accurate and timely reporting of spending on federal assistance programs in order to prevent waste, fraud, and mismanagement.

POGO has previously reported on the failings of USAspending.gov, noting its inability to answer 10 key questions about government spending, including how much money is spent in individual congressional districts and how much agency funding goes to compensating federal workers. After reading the GAO report, we would like to add two more key questions: How does federal assistance spending break down in terms of mandatory versus discretionary spending? Can the spending currently lumped under the “Direct Payments” and “Others” categories be broken down more precisely? Hopefully, the DATA Act will satisfactorily address all of these questions.

The Sunlight Foundation’s Clearspending Report of FY 2011 found that 94.5 percent of the obligations reported by USAspending.gov failed in at least one of three metrics: consistency, completeness, and timeliness. Clearly, this website has been faulty and inconsistent for years. POGO hopes that, with the implementation of the DATA Act and the transfer of authority of USAspending.gov from OMB to the Treasury, agencies will be held more accountable for reporting their grants, loans, voucher programs, and other federal assistance information in order to keep Americans properly informed about the destination of their tax dollars.

By: Max Johnson
Intern, POGO

Max Johnson photo At the time of publication Max Johnson was an intern with the Project On Government Oversight.

Topics: Government Accountability

Related Content: Miscellaneous

Authors: Max Johnson

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