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Saturday, December 3, 2022

OIG: DHS Making Progress on DATA Act but Challenges Remain

A new report from the Office of Inspector General (OIG) says the Department of Homeland Security (DHS) has continued to make progress in meeting its Digital Accountability and Transparency Act of 2014 (DATA Act) reporting requirements, since the watchdog’s first audit in 2017. 

OIG noted the Department’s improvements, including reducing misalignments in its procurement and financial assistance award data from nearly $1.9 billion (38 percent) in FY 2017/Q2 to $264 million (4 percent) in FY 2019/Q1. OIG says this occurred because DHS implemented a quarterly process that targeted such misalignments through spending data quality reviews. OIG nonetheless identified opportunities for DHS to strengthen its quarterly reviews and further reduce misalignments to enable more effective tracking of federal spending. 

Using the Inspectors General Guide to Compliance under the DATA Act, OIG found the quality of DHS’ spending data was moderate for a statistically valid sample of 375 procurement and financial assistance awards. Specifically, OIG reports that the data was complete and accurate, but not timely. Due to system limitations, DHS did not report 67 percent of the sampled financial assistance award elements within 30 days of award date as required. Although DHS works to mitigate this risk through its quarterly review process, the timeliness of financial assistance reporting remains a recurring challenge. 

OIG found that while DHS generally implemented and consistently uses governmentwide data standards, it could improve reporting for certain data elements to fully achieve the DATA Act’s objective of making federal spending information more transparent to the public. DHS developed a data quality plan to manage risks to data quality as required. 

OIG’s report makes five recommendations:

  1. The Chief Financial Officer should improve the alignment of DHS’ budgetary data with the authoritative sources that the Treasury Broker uses for DATA Act validation by: updating the Department’s program activity data in the OMB’s MAX Collect list to align $3.4 billion in award obligations from DHS’ FY 2019/Q1 submission with the President’s budget; issuing guidance clarifying that DHS components should only use program activity code “0000” and program activity name “Unknown/Other” when there are no obligations reported in the appropriation account; and developing a solution to ensure DHS components maintain awareness of and comply with any changes the Office of Management and Budget makes to the reporting deadline for the quarterly MAX Collect exercise. 
  2. The Chief Financial Officer should strengthen the internal controls within DHS’ quarterly corrective action plan process by: requiring DHS components to research and correct, as needed, matching award identification numbers with non-matching obligation amounts; requiring DHS components to identify root causes for misalignments so the specific reasons for timing issues and the corrective actions needed to address them are clearly understood; requiring DHS components to submit corrective action plans addressing misalignments on a monthly basis rather than once a quarter; and developing an effective solution to continuously track misalignments from month to month until corrective actions are completed. 
  3. The Chief Financial Officer should improve the quality of the financial assistance award information reported in DHS’ DATA Act submissions for publication on USAspending.gov by: implementing and testing the new system for managing and reporting National Flood Insurance Program (NFIP) awards until it addresses the limitations of the legacy system and becomes DATA Act compliant; developing standard operating procedures to document aggregation procedures for NFIP awards, including controls to ensure that awards to organizations are not aggregated with individuals, and data elements for aggregate awards are traceable to source documentation; and correcting the root cause associated with the systems integration issue that resulted in more than $500 million in grant award misalignments within the Department’s FY 2019/Q1 DATA Act submission. 
  4. The Chief Financial Officer should develop and apply effective solutions to improve the implementation and use of the government-wide financial data standards for data elements associated with the award description, place of performance, unique record identifier, legal entity information, program activity data, and financial assistance aggregate reporting. 
  5. The Chief Financial Officer should strengthen the DHS Data Quality Plan to achieve the DATA Act reporting objective by: completing testing of high-risk elements identified by the Risk Management and Assurance Division, and updating the control structure in the Data Quality Plan as necessary based on the test results; and updating internal controls in the Data Quality Plan to address the audit findings and recommendations in this report. 

DHS concurred with all five recommendations. It expects to complete all work to meet these by the end of 2020, with two exceptions. The first concerns part of the fourth recommendation to identify the root cause of the abbreviation, truncations, and concatenation issues in legal entity fields, which it expects to complete by March 31 2023. And in line with the fifth recommendation, DHS said the DATA Act team will update the control structure of the Data Quality Plan to address the audit findings and recommendations in OIG’s report by March 31, 2021. 

Read the full report at OIG

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The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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