The Office of Inspector General (OIG) has found that the Department of Homeland Security (DHS) continues to make progress meeting its reporting requirements under the Digital Accountability and Transparency Act of 2014 (DATA Act).
Using the Inspectors General Guide to Compliance under the DATA Act, OIG found that the quality of the Department’s DATA Act submission for FY 2020/Q4 was moderate at 84.7 of 100 points, including non-statistical and statistical testing results. When excluding third-party errors outside of DHS’ control, the quality increased from moderate, which ranges from 70 to 84.99 points, to high at 85.3.
OIG noted that DHS has implemented the watchdog’s prior audit recommendations to improve the completeness of budgetary and award data in its DATA Act submission to make the spending information more transparent.
However, OIG found that system limitations hindered the Federal Emergency Management Agency’s (FEMA) ability to track spending associated with the Department’s response to the Coronavirus Disease 2019 (COVID-19) pandemic. Because FEMA received 98 percent (approximately $45.4 billion) of the Department’s COVID-19 funding in FY 2020, OIG concluded the reported spending data was not reliable.
DHS officials told OIG that FEMA’s systems lacked the automated capability to report cumulative, year-to-date outlay totals at the award transaction level on a monthly basis. FEMA’s systems could only report outlay totals occurring within a specific month.
Despite the overall moderate quality of DHS’ submission, the audit ultimately found the quality of its spending data was high for a statistically valid sample of 103 procurement and financial assistance awards. However, the system limitations continued to hamper the timeliness of FEMA’s financial assistance data. OIG found that FEMA did not report one-third of the sampled financial assistance award data elements within 30 days of award as required.
In March 2021, DHS started disclosing in its monthly attestation statement on USAspending.gov the issues regarding the inconsistency of FEMA’s Disaster Emergency Fund Code assignment process and FEMA’s inability to report cumulative COVID-19 outlays.
The watchdog also said DHS needs to implement and consistently use the government-wide financial data standards to improve the accuracy of reporting for certain data elements to fully achieve the DATA Act’s objective.
As a result of the audit, OIG has made three recommendations to DHS. First, that it develop and apply solutions to ensure FEMA fully complies with the new DATA Act requirements for reporting cumulative COVID-19 outlays on a monthly basis and linking spending to emergency and disaster appropriations through the Disaster Emergency Fund Code data element. OIG said DHS should ensure the solutions produce complete and accurate data elements that can be independently traced and verified to an auditable file.
DHS concurred and stated that limitations in FEMA’s legacy financial and grant feeder systems adversely affect FEMA’s ability to fully comply with Disaster Emergency Fund Code reporting requirements. For example, several of the grant feeder systems that process the disaster allocations, commitments, and obligations have “hard coded” reports that only accept certain elements in the line of accounting. DHS said FEMA will make changes to certain systems and/or modules to enable the use of multiple disaster fund codes by December 30, 2022.
DHS also concurred with the second recommendation, to develop and apply solutions to address the challenges hampering the timeliness of FEMA’s financial assistance data, including any limitations in FEMA’s modernized National Flood Insurance Program system and the recurring systems integration issue caused by backdating grant awards.OIG added thatDHS should ensure the solutions enable FEMA to comply with the 30-day standard for reporting financial assistance awards.
Beginning in FY 2022, DHS will use the date of FEMA’s Office of the Chief Financial Officer review and approval as the Action Date for insurance transactions. DHS asserted this date would align with DATA Act requirements and allow DHS insurance records to comply with the 30-day standard for reporting financial assistance awards. Accordingly, FEMA officials will update the DATA Act data pull routine. In addition, FEMA will document a resolution to the recurring systems integration issue caused by backdating grant awards.DHS expects this work to be complete by November 30, 2021.
Finally, OIG recommended that DHS develop and apply solutions to improve the implementation and use of the government-wide financial data standards for procurement and financial assistance data elements that had an accuracy error rate of 10 percent or more.
DHS said it will take action for the procurement and financial assistance data elements OIG reported as having an error rate of 15 percent or more, which is the threshold for “High” quality data. By the end of this year, DHS will issue guidance to improve the implementation and use of the data elements that have an error rate of 15 percent or more, have a significant impact to users of the data, or are statistically different from “Excellent” quality.