Despite two ongoing pilots for industry to use Extensible Business Reporting Language (XRBL) to make financial data more transparent and more easily used, agency use of this software language is limited at best.
Danny Werfel, controller of the Office of Management and Budget, and director of the Office of Federal Financial Management, told Federal News Radio in an interview after his speech at the recent Association of Government Accountants Internal Control and Fraud Conference, that the use of XBRL in agency financials is a work in progress
“I think we’re certainly committed to data standardization, and allowing for tools like XBRL to take hold and provide us with efficiencies in how we approach data management,” he said. “Our approach is not to look at it as should we be deploying XBRL, or this solution, or that. Our approach is how can we prepare the government more effectively to leverage the tools that are emerging in the private sector and other environments. So our focus is on the underlying data itself, how are our accounts structured, do we have an appropriate taxonomy, and the appropriate data definitions. And when we’ve talked to Congress and to other stakeholders, we’ve said let’s form a partnership around the underlying data structures, and then standardizing on them, and then let’s look at the other suites of tools that are available, and begin to leverage them effectively.”
XBRL already has proven it is a powerful tool that can make possible the display and manipulation of large datasets of financial and numerical information.
Both the Securities and Exchange Commission and the Federal Deposit Insurance Corporation are in the second year of a three-year pilot project to have large scale corporate financials tagged with XBRL. The tags make possible groundbreaking analysis of those financials to detect the economic health of a company.
Werfel said there are numerous logistical hurdles still remaining on the road to wide-spread adoption of XBRL in agency financial reports.
“It’s really about looking at those areas where the robust data structures are already in place, as a best practice, and looking for other areas to expand those robust data standards, and data taxonomy, and in places like basic accounting and financial statement reporting. We’re not there yet,” he said. “We have more work to be done. In the area of collecting information from grantees and how they’re spending their money, and the performance with their money, that with greater data standards, it will open up our ability to manage our data portfolio more effectively.”
Werfel said the move to tag federal financials with XBRL is a “continuously moving process,” because no agency is starting from scratch.
He said that there are numerous agencies already exploring data tagging solutions with XBRL, and many are incrementally modifying their data structures to make use of the tools currently available and improved applications now on the drawing board.
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