By Larry Jones
May 14, 2012

By voice vote, the House approved on April 25 the Digital Accountability and Transparency Act, H.R. 2146, legislation that would require all recipients of federal funds, including state and local governments (and their sub-recipients), to submit standardized reports on the use of such funds. Under the proposed legislation, reports must be submitted to a newly established Federal Accountability and Spending Transparency Commission (FASTC), which would be responsible for closely monitoring federal spending to protect against waste and abuse. The bill would also limit to one, the number of annual meetings sponsored by organizations that federal agencies would be permitted to participate in.

State and local recipients of federal funds would be required to report at least once quarterly to FASTC on how they used all federal funds. As the primary recipient of federal funds, a state or local government that awards federal funds to sub-recipients or subcontractors would be permitted to report on their behalf. Each federal agency would also be required to report all federal obligations and expenditures to the FASTC, identifying programs and budget functions. Federal agencies may also impose a maximum civil penalty of $250,000 on recipients for noncompliance with data requirements.

The FASTC would be responsible for developing data reporting standards and establishing a website for the publication of all information submitted by recipients and federal agencies. The commission would be comprised of 5 commissioners, who would be appointed by the President with the consent of the Senate. One of the members would also be appointed by the President to serve as chair of the commission. The intent of the bill is to simplify and centralize spending reporting standards so that every federal agency reports on spending in the same way.

The FASTC is modeled after the Recovery Accountability Transparency Board, which established successful reporting and accountability standards for monitoring federal spending under the 2009 economic stimulus law. Because of its success, the Digital Accountability and Transparency Act is intended to apply similar reporting and accountability standards to all federal funds.

While the Conference of Mayors and other state and local groups are in favor of reporting, accountability and transparency standards to protect federal spending from fraud, waste and abuse, there is widespread concern among state and local groups because there is no provision in the bill to pay for the additional reporting requirements. This comes at a time when state and local governments are still facing severe budget shortfalls. There is also concern about the magnitude of the reporting requirements and the stated timelines for implementation.

In response to widespread criticisms of waste and abuse associated with the General Service Administration 2010 Las Vegas conference, which cost taxpayers $823,000, the proposed legislation would impose strict limits on federal agencies travel to organizations- annual conferences. The bill would limit to one, the number of annual conferences that a federal agency may expend funds on in any fiscal year. This would present a huge problem for the Conference of Mayors and similar organizations that hold several conferences each year and depend on federal officials from various agencies to meet with mayors on an ongoing basis to discuss regulatory issues and provide an update on grants awarded to local governments.