Congress Looks to XBRL Reporting Requirements to Track Federal Spending

January 9, 2012

Congress is beginning to view XBRL as a way to track federal spending and to improve transparency.  Language calling for implementation of data standards, such as XBRL, was included in nine separate U.S. House of Representatives and Senate bills during 2011, and the potential exists for several others in 2012. The American Institute of CPAs is working with the sponsors of each of the bills to support their efforts to enact these XBRL provisions and to educate other lawmakers about the importance of using XBRL.

Most recently, in December, the XBRL language was included in the “payroll tax cut” legislation (H.R. 3630) in the U.S. House of Representatives, but was removed from the U.S. Senate compromise that shortened the tax cut to two months.  Because the Congress will have to take up the payroll tax cut in early 2012, the potential still exists for the XBRL language to be included in the longer-term fix. 

The same XBRL language was included in a smaller bill (H.R. 3659) that calls for reauthorization of 2012 block grants for TANF (temporary assistance for needy families).  The TANF bill was passed by voice vote in the House, but because the TANF provisions, minus XBRL reporting requirements, were included in the two-month payroll tax cut bill (H.R. 3765) the XBRL provisions could resurface in any measure Congress negotiates to extend the payroll tax cut to a full year.

Another bill, the Standard Data and Technology Advancement Act or Standard DATA Act (H.R. 3339) was introduced in November by Congressman Geoff Davis, a Kentucky Republican, and Lloyd Doggett, a Texas Democrat.  Their bill requires the Office of Management and Budget to establish an interagency work group to designate nonproprietary data standards, such as XBRL, for any information reported under a number of health and human services  programs. As of now, there is no companion to the legislation in the Senate.

Earlier in 2011, the AICPA supported a bipartisan bill that became law on Sept. 30, 2011 that included a provision calling for data standardization, and specifically requires the Secretary of the Department of Health and Human Services and the Office of Management and Budget to work to establish non-proprietary data standards, such as XBRL.  While the primary purpose of the bill was to extend child and family services programs, the use of XBRL for reporting information by states will improve data matching.  The Child and Family Services Improvement and Innovation Act passed the House of Representatives on Sept. 21, 2011 and the Senate on Sept. 22, 2011. Congressmen Davis and Doggett were the bill’s champions in the House of Representatives and Senators Max Baucus, a Montana Democrat, and Orrin Hatch, a Utah Republican, were the key Senate sponsors. 

AICPA President and CEO Barry Melancon, CPA wrote letters to both the House and Senate sponsors on Sept. 20, 2011, that said “including provisions to require reporting of information under the Child and Family Services Improvement and Innovation Act will make the reporting process more efficient and enhance comparability of such information for DHHS, the Congress, and other stakeholders who need to monitor and analyze the use of these funds.”

Additionally, the Digital Accountability and Transparency Act or DATA Act was introduced in June 2011 in the House of Representatives by Congressman Darryl Issa, a California Republican, and in the Senate by Senator John Warner, a Virginia Democrat.  That legislation calls for the creation of a Financial Accountability and Spending Transparency Board or FAST Board.  It requires that all Federal agencies and recipients of Federal funds report their spending using nonproprietary standards, such as XBRL, to the FAST Board.  The House bill was favorably reported out of the Oversight and Government Reform Committee in June. 

The AICPA sent a letter in support of the DATA Act prior to the Committee’s consideration noting that “utilizing consistent data standards for the information submitted, such as XBRL, the FAST Board will be able to compare information from the Federal agencies to information from recipients, providing an unprecedented level of transparency for Federal spending.”  Congressman Issa has said he hopes the full House will take up the bill in early 2012.

The AICPA is also working to encourage other members of Congress to consider legislation that would include XBRL reporting provisions.  With the kind of interest seen in 2011, 2012 will hopefully be another good XBRL year.

For more information, go to the XBRL page on the advocacy section of the AICPA website.