Of Silk Purses and Sows’ Earmarks

In this election season, after lurid tales of hidden pork and “bridges to nowhere,” Congress now demands that our government be more open and accountable about how it spends our dough. But history indicates achieving fiscal openness doesn’t come easily, and accountability even less so. Through omission and commission, Congress and OMB tend to take their eye off the prize.

Two weeks ago, while the House amen chorus blessed a rule that earmark sponsors shall reveal themselves, both houses of Congress passed a bill with far greater breadth and potential import.

To acclaim among policy wonks, Congress said OMB must create a massive public website providing access to information on every federal grant award, contract, loan, and purchase order worth over $24,999, searchable by funding agency, program, recipient business or government, and geography; the web site would cover over $875 billion distributed annually through well over 1 million contracts, grants and loans.

The aims of the Federal Funding Accountability and Transparency Act of 2006 are several: enlist the public’s eyes in rooting out waste, fraud, abuse and dumb earmarks; increase the public’s appreciation for well-spent tax dollars; and give states, localities, and researchers a tool for tracking what monies go to which geographies and for what purposes.

Sounds great, this is classic goo-goo stuff. And it gets better—right and left actively worked together, across Congress (48 Senate sponsors), interest groups, and bloggers. The leaders of this bipartisan effort were unusual political allies, Sens. Coburn and Obama.

But, as Coburn and Obama acknowledge, passing the bill is the easy part. For nearly 40 years, Congress and OMB have sought to create comprehensive, accurate, and accessible databases of federal grants and contracts. Many laws and Government Accountability Office (GAO) reports later, they haven’t been successful. This lack of success has important lessons for the successful implementation of the transparency bill.

If you’re a wonk, dive in, if you’re not, hold on. (In any case, pay attention, it’s your money we’re talking about.)

OMB is currently responsible for two Congressionally-mandated databases for tracking grant and contract awards—the Federal Assistance Award Data System (FAADS) and the Federal Procurement Data System (FPDS). OMB delegates the management of FAADS to the Census Bureau and FPDS to the General Services Administration. Both systems are plagued with issues of incompleteness, inaccuracy, lack of timeliness and user difficulty. Since being created well over two decades ago, both have been the focus of periodic GAO evaluations (nine for FPDS alone) and numerous attempts at improvement. But long-standing hopes for reliable federal expenditure databases have not been achieved.

The reasons are clear. Most problematic, many reporting federal agencies lack the knowledge and willingness to report to FAADS and FPDS with completeness, timeliness and accuracy. GAO recently looked at 86 agencies submitting to FAADS, and found that 25 gave incomplete or inaccurate data and 19 didn’t bother to report at all. “The FAADS reporting requirement has been in place since 1982. But lack of knowledge among program officials about the requirement and poor oversight has affected compliance.” Also, GAO found “gross errors” in the FPDS data.

The reporting systems have additional structural problems. FAADS is not automated—agencies give their data to Census in any format they choose, such as a text file, spreadsheet, or e-mail. The burden is on Census staff to translate this material into something usable.

Ironically, the accountability systems are underfunded. The Census Bureau group responsible for FAADS and related reports has too small a budget to do its job well and quickly. One report mandated by Congress to be delivered six months after fiscal year’s end now comes out at 15 months after the books close.

Garbage in, garbage out.

Fundamentally, the OMB hasn’t provided adequate enforcement and incentives to ensure that agencies adhere to the reporting rules, and hasn’t seen that Census and GSA have the resources and proper incentives they need to do their job well. Congress itself has provided neither consistent nor thorough oversight of OMB or sufficient funding.

Which brings us back to the transparency bill. The bill makes aggressive demands of OMB—get the fiscal year 2007 data up by January 1, 2008, report new awards within 30 days, create an entirely new system for tracking subawards. The bill gives OMB the option to use, or not, FAADS and FPDS in building the web site. But building a new, redundant system from scratch in 15 months doesn’t seem like a good idea. OMB has to take on the difficult issues of FAADS and FPDS systems design, incentives, enforcement, training and resources head on, now and quickly.

Which could be a recipe for failure, again. But this time has the potential to be different. Sens. Coburn and Obama and OMB understand the issues and know that sustained follow-through is critical. OMB has publicly committed itself to effective implementation. Senator Coburn is determined to hold OMB’s feet to the fire in public hearings. Senator Obama believes that the web-enabled, vocal right-left political constituency that fought for the bill will howl if the web site’s incomplete or inaccurate, and the FAADS/FPDS systems have not had a whistle-blowing constituency like that before. (See porkbusters.org.)

The multi-partisan, good government value of the transparency web site is clear. Once the president signs the bill, realizing that value lies in the hands of Congress and OMB. If Obama and Coburn are correct, they’ll have an audience that won’t be shy about keeping the pressure on. Let’s hope so.