Controller Danny Werfel

Controller Danny Werfel Caitlin Fairchild/

OMB not enamored of House-passed data transparency measure

Controller has different view than former Recovery Board colleague.

The DATA Act, the government spending transparency bill that passed the House in April, has ruffled some feathers at the Office of Management and Budget, signs of which were on display Tuesday at a panel discussion of lessons learned from implementation of the 2009 Recovery Act.

Controller Danny Werfel, addressing a workshop put on by the nonprofit Partnership for Public Service and sponsored by Grant Thornton LLP, clashed with Obama administration colleague Earl Devaney, recently retired as chairman of the Recovery Accountability and Transparency Board, over whether new legislation is needed to advance their shared goals of improving transparency and accountability in agency spending.

The legislation known as the DATA Act (H.R. 2146), which is pending in the Senate, would impose a universal reporting requirement for recipients of federal grants, loans and contracts. It would require all agencies to use the same formats to publicly share their internal and external obligations and expenditures. A five-member Federal Accountability and Spending Transparency Commission would oversee the measure’s implementation.

Its components were heavily influenced by the online reporting and data consistency tools the Recovery Board pioneered during the financial crisis, and Devaney calls himself the DATA Act’s biggest fan.

The concern, said Werfel, is the “DATA Act takes guidance writing away from OMB and gives it to a newly stood-up entity, the commission, which creates a new layer of regulation, two sets of rules and additional regulatory complexity.”

During the urgent push to get stimulus money out the door and into the economy, Werfel said, he had an “epiphany” in realizing that OMB is “really good” at writing the guidance because it has the skill sets and network of processes to work with agencies to incorporate their more specific, supplemental guidance.

The DATA Act’s commission, he added, would not be subject to the 1946 Administrative Procedure Act or the 1980 Paperwork Reduction Act, “so it’s not clear when the public gets to see the sausage being made and interact” in the form of publication in the Federal Register and comment periods, Werfel said.

He said a new set of procedures could distract agencies, burden the public and cost more money precisely when President Obama is seeking authority to reorganize the government to reduce duplication. The administration is leading in the open government area, Werfel added, and given the 2006 Federal Funding and Accountability Transparency Act, the 2010 Government Performance and Results Modernization Act, and the 2010 Improper Payments Recovery Act, “I don’t think new legislation is needed.”

Devaney countered by citing “a crying need” for data standards in government because agencies spending Recovery Act funds were using different formats and number systems. “When I think of transparency, I think it’s for the general public. I don’t think of it as making sausage over at OMB,” he said. The question “is who has ownership of this thing. A board? An individual body? The inspectors general council? If we do too many pilots and testing, it will slow this thing down,” he said.

The Recovery Board’s use of a website to enlist help from citizens living in areas where Recovery Act funds were being spent “gave the public a taste of this,” Devaney added. “The government moves fastest when Congress acts and there are concrete data sets. If we leave it up to the agencies, it will never get done.”

Devaney said lessons he learned from implementing the Recovery Act included “how bad the government data was” as well as the way transparency can be a “force multiplier for accountability” because so many parties get involved. “We had so much sunlight on that money,” he said, “the bad guys probably said, ‘I won’t go for that, I’ll just continue to steal from Medicare.’ ”

The “great experiment” in spending what originally was $787 billion -- Devaney said he confessed that he never understood how it rose to $840 billion -- could have used more agency performance metrics and more focus on preventing fraud at the pre-award stage, rather than merely detecting it.

Both Devaney and Werfel spoke of how awed they were at the quality of the White House and agency leaders as well as the “unprecedented” scope of the task of creating data systems that depend on input from recipients. Executing the Recovery Act was “the most illuminating and challenging and energizing moment of my career to date,” Werfel said. “Earl and I clashed occasionally, but complemented one another,” Werfel’s orientation being toward management and Devaney’s toward leadership.

“Danny and I shared the goals,” Devaney said, “but differed on how fast we can get there.”

OMB’s objections to the DATA Act were “encouraging” to Ali Ahmad, communications adviser to the House Oversight and Government Reform Committee, who told the panel that he believed that differences could be worked out by getting “all these great civil servants” together in a room. He noted House leadership embraced the DATA Act in large part because of Devaney’s role as a bipartisan salesman, even though his boss, Rep. Darrell Issa, R-Calif., does not “believe that the Recovery Act fulfilled its mission.” The key to progress will be a need for transparency and urgency in this time of austerity, Ahmad said.

Howard Dickenson, assistant director for recovery operations at the Energy Department, said the best thing about Energy’s experience spending stimulus money was the creation of a weekly financial report. “It forced the department to use a single consolidated set of data,” which allows for increasing transparency at the management level to minimize the need for auditing, he said. By creating a “sophisticated dashboard for day-to-day discussions,” Energy was able instantly check progress on whether money was being spent and jobs were being filled, and to call project managers if something was falling behind, he added “The more transparency on the inside, the less of a problem with external reviews.”

Amy Edwards, a Senate Budget Committee aide to Sen. Mark Warner, D-Va., (Warner sent over a video to address the workshop) said, “It speaks to the success of the Recovery Act that Warner and Issa speak openly of its success.” She said interest in the DATA Act is growing in the Senate, and she expressed hope that compromises could be worked out on such issues as the threat of duplicating what agencies already are doing. She expressed hope it will pass later this year.

In introducing the panel, Partnership President and Chief Executive Officer Max Stier said the Recovery Act and the intergovernmental working group that made the spending happen is one of the major success stories, and he expressed regret that some of that “infrastructure has since been allowed to atrophy.”

Moderator Robert Shea, a Grant Thornton principal who worked at OMB during the George W. Bush administration, referenced the recent spending scandal at the General Services Administration, joking that Werfel, now virtually running the management side of OMB, is “personally approving every conference trip -- I know that keeps you busy.”