The Digital Accountability and Transparency Act of 2014 (DATA Act), signed into law earlier this year, calls for the adoption of a data standard that is “a widely accepted, nonproprietary, searchable, platform-independent computer-readable format” to report federal contract, loan and grant spending information by federal programs. The implementation process is underway and the U. S. Department of the Treasury Bureau of the Fiscal Service sought input on the establishment of financial data standards. The American Institute of CPAs (AICPA) commented on the Department’s Request for Information.
The AICPA’s November 24 comment letter expressed support for the application of data standards and the requirements of the DATA Act to bring the benefits of data standards to government reporting. The eXtensible Business Reporting Language (XBRL) is the data standard used for reporting financial information to banking regulators, tax authorities, and securities regulators around the globe. The CPA profession is committed to the transparency and usability of reported information, and has been a strong supporter of the use of structured, standardized data, specifically XBRL, to report business information. The AICPA believes that XBRL is the only available data standard to adequately meet the requirements of the DATA Act.
The use of data standards applied consistently to all federal spending data will allow the information to be fully accessible and publicly available. The DATA Act will require transactional-level data to be submitted using data standards and, as a result, changes to internal controls or the financial reporting process may be required because many manual processes to reconcile and accumulate data may be eliminated. CPAs who work in government and those who interact with federal government entities should begin to consider the impact of applying data standards to financial information and how these changes may impact the audit process and approach.
House Holds Hearing
In a related action, the House Oversight and Government Reform Committee held a hearing on December 3, 2014 regarding the implementation of the DATA Act. Senate sponsors Mark Warner (D-Va.) and Rob Portman (R-Ohio), testified at the hearing about the bipartisan cooperation and importance of having passed the DATA Act. A second panel – Gene Dodaro, Comptroller General of Government Accountability Office, Dave Mader, Controller at the Office of Management and Budget, and Dave Lebryk, Fiscal Assistant Secretary of the Department of the Treasury – also testified, noting the status of each agency’s activities regarding implementation of the new law.
Chairman Darrel Issa (R-Calif.), Ranking Member Elijah Cummnings (D-Md.) and many other members of the Committee spoke about the bipartisan nature of the law and the level of transparency they hope the use of data standards will achieve for understanding the federal government’s spending. The AICPA submitted a letter, which will be included in the hearing record, reiterating “that the use of standardized data will enhance the accessibility and transparency of federal spending information which will benefit members of Congress, federal agencies, taxpayers, and those doing business with or receiving benefits from the federal government.”