The Digital Accountability and Transparency Act (DATA Act), which was passed unanimously in both the House and Senate and signed into law May 2014, is a positive step forward for the open data movement. The law creates standardized data elements, formats and processes, making possible the reporting of aggregated federal spending data. This translates into greater taxpayer visibility, stricter federal funding oversight and smarter resource allocation.

However, the DATA Act foreshadows top-down spending reforms that will require cities and counties to find new and better ways to track and report on federal funds.

The DATA Act rollout timeline

The DATA Act puts the Office of Management and Budget and the Treasury Department jointly in charge of creating standard data requirements for reporting federal dollars. They have one year from the law passing to review current processes and data, and to develop consistent formats and identifiers.

Once complete, government agencies will have two years to apply data standards to information reported to the Treasury, White House and federal grant and contract databases. A pilot program, expanding on the learnings of the Grants Reporting Information Project (GRIP), will test grantee and contractor requirements. However, grantees can voluntarily adopt standards before they are mandated.

Eventually, there may be a single portal for federal award reporting. When this happens, grantees will be able to submit reporting data to multiple government agencies simultaneously.

Local government implications and preparation

The DATA Act’s passage means big changes ahead for city and county governments that depend on the $541.9 billion in federal grants awarded in 2014. Municipalities must adopt the infrastructure and processes necessary for compliance with data reporting requirements. Here are some ways that local governments can ready themselves for reforms:

• Prepare for machine-readable data formats. The DATA Act makes machine-readable formats the standard for federal government data in order to eliminate data entry redundancies. As demonstrated in the GRIP pilot, this will likely be in the form of online web forms, XML single submissions or XML bulk submissions. Grant management software can significantly increase reporting efficiency through bulk or batch XML filing. With it, multiple grant reports can be submitted in a single XML file transfer, saving grant managers time by pulling directly from grant recipients’ existing management systems.
• Make grant performance outcomes data-driven. Municipalities that are not already reporting quantitative and qualitative outcomes may struggle to secure funding once grantors require measurable results and proof of ROI. Grant managers should assign tasks directly related to grant goals, and track projected versus actual revenue and expenditures to make sure programs stay on course and meet objectives. Regular performance snapshots ensure there are no surprises at the end of the grant cycle.
• Streamline grant management processes. Under the DATA Act, federal grantees will report the same information as before, but data will be gathered in more efficient ways. That said, aggregated spending data will shine a spotlight on mismanaged funds, upping the competition for already sought-after federal dollars. Local grant managers will need to reduce waste in grant management, reallocating administrative time and resources to more mission-critical program initiatives. Lead recipients have the added responsibility of delegating grant program tasks to sub-recipients and rolling up performance and spending data for consortia grant reporting.

The early mover advantage

As municipalities plan for years ahead, they must invest in the adoption of new processes and technology to support the open data imperative. There is an early-mover advantage.

Compliance will require greater technology and operational infrastructure, such as adequate computing power, data storage and processes to track funds and programs throughout the grant lifecycle. Municipality grant managers will need to improve both program performance and their ability to demonstrate improved performance and measurable outcomes to grantors.

The potential is promising, but the city governments that stand to benefit from spending reforms will be those that pivot their operational, technology and talent infrastructure toward digitized grant management and data-driven award performance measurement.

Adam Roth (aroth@streamlinksoftware.com) is the founder and CEO of StreamLink Software. The company’s flagship product, AmpliFund, is designed for managing every stage of the grant lifecycle, from pre-award research and planning to post-award performance and reporting.

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