The DATA Act – What it can do for all Americans

April 19th, 2016

 

It is no secret that the federal budget is riddled with waste and errors. Tell us something we don’t know.

This fact is the type of thing most Americans have accepted with death and taxes. As our culture grows more cynical, there is an overwhelming sentiment of “There is nothing I can do to change the way things are.”

We must fight against our apathy and use technology to assist us in forging ahead into what we know to be better government and “a more perfect union.”

The DATA Act (Digital Accountability & Transparency Act) is one of the few opportunities we have to change not just some things – but everything about the way the government distributes money. I will be the first to admit that it is a long shot for any government agency to do something efficiently and effectively, but even if they get this legislation half-right it would be a great improvement.

Another piece of potential good news for the DATA act is that it has a very recent, major government implementation process to learn from and improve upon. The process I am referring to is the Securities & Exchange Commission’s implementation of eXtensible Business Reporting Language (XBRL) from 2009-2012.

This SEC action plan for implementation of XBRL into public company filings incorporated a two-year voluntary-filer pilot-program, followed by a gradual phase in of the biggest companies to the smallest public companies from 2009-2012. This roll out allowed both the SEC and small companies to learn from early mistakes and refine the process quickly. The phase-in also allowed for milestones to be achieved with regard to the level of detail in the data.

Where the SEC went wrong is not demanding enough standardization of data-tagging. It allowed for over 15,000 definitions public companies could choose from and also offered companies the ability to create their own customized definitions on top of the 15,000 options. So the reality was “infinite possibilities”. Not so surprisingly, customization was rampant in early XBRL filings and created high “extension rates”, which make it difficult to get apples to apples comparisons. What one company termed as “Sales” another could customize their definition slightly in order to not have their numbers directly compared for fear of looking bad against the competition.

This single point of failure can be avoided in the DATA Act implementation and in future transparency efforts. Minimizing the number of customized ways to say the same thing will increase the accuracy of comparison between municipalities, grant recipients, companies and agencies that receive federal money.

The good people at POGO have put together 10 questions that should be easy enough for even moderate transparency to answer. 

While what is below is an over-simplification of a complex tagging-service process using a complex software product, it will show how it should look to the lay person who wants to know where their tax dollar are getting spent. This way of looking at the data is, in fact, the end goal of transparency. All of us being able to see how the government is spending the money we (the citizens) agree to give.

Question: What small businesses in my community are receiving federal dollars?

How XBRL would allow for easy comparison:

<smallbusinessname>ABC Fictional Company</smallbusinessname>
<federaldollarsreceivedtotal>$100,000</federaldollarsreceivedtotal>
<federalagencyDoD>Department of Defense</federalagencyDoD>
<datereceived>1/31/2013</datereceived>
<expecteddateofuse>6/30/13</expecteddateofuse>
<intendeduse_militaryfacilityconstruction>Fort Fake Barracks Improvements</intendeduse_militaryfacilityconstruction>