Why tracking federal spending is more complicated than ever, and how to fix it

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The trillions Congress printed to respond to the pandemic were supposed to come with a tough regime of oversight and transparency. But that only partially came true. Our guest says the COVID spending only exaggerated existing weaknesses in spend reporting. Sean Moulton is senior policy analyst at the Project on Government Oversight and joined Federal Drive with Tom Temin with details.

Interview transcript:

Tom Temin: Sean, good to have you back.

Sean Moulton: Thanks for having me back, Tom.

Tom Temin: And you have looked at USAspending.gov and just found simply that even 10 years after this became kind of the law of the land, it’s still very hard to know where federal money goes. Give us the top line here.

Sean Moulton: You would think we would have the ability to reliably answer some very basic questions about where is this money going. What communities are getting missed? Which industry sectors are we reaching or missing? One of the big questions the new administration is talking about with COVID, is it being spent equitably? And the reality is, the answer still very often is, we don’t know. Because the system itself is broken, we’re collecting erroneous data or useless data, or we’re not collecting the data at all.

Tom Temin: And what is it that agencies use? What is the system they’re using for the most part to get that information into USAspending.gov. Because each agency has a little separate version almost of its financial controls.

Sean Moulton: That’s true. And so the main databases that USA spending is built on are two, there’s a contracts one called the Federal Procurement Data System. And then on the assistant side, which is everything else, even though some of its very different loans, grants, direct assistance to households, and individuals – that all goes through something called the Federal Awards Data System, FADS. And one of the big problems with that, I mean, especially under COVID, so much of the money is coming out through assistance, you’re assisting businesses, we’re assisting households, we’re assisting state governments and local governments. And so that money is just kind of pouring out, we’re doing loans, we’re doing grants that people don’t have to pay back. And the reality is, we don’t collect nearly as good information on the assistance side about who’s getting it, who exactly they are, where exactly they are, how they use it, who they spend it with, state governments, where exactly that money goes after the state governments get it. We do a bad job collecting all that information.

Tom Temin: Because here we are a year and a half running on to two years since the CARES Act came out, and only now our oversight reports starting to trickle out. For example, the GAO has a pair of reports, just recently within days, on some of the other transaction authority spending that HHS did to drug companies and so forth to get things going in the vaccination front and so on. But that’s a year and a half afterwards, that we know. And with Congress contemplating spending so much more money if this all happens for infrastructure, and you name it, it seems like, what do they say, the money you’ll get spent before the oversight gets out of bed and puts its shoes on.

Sean Moulton: That is the big concern here. I mean, while the COVID spending and the recovery spending from the pandemic is prompting our greater interest here. The reality is the reforms that we’re asking for, we’re recommending would pay benefits for years down the road, whether it’s infrastructure spending, or following up on a hurricane or just regular year to year spending, we should be able to answer these questions. And the fact that we can’t, it means that we are unable to do the proper oversight. Congress can, the agencies can, and more importantly, the public can, they should have some level of trust and certainty that all these tax dollars that we give the government each year are being spent well.

Tom Temin: We’re speaking with Sean Moulton, senior policy analyst at the Project on Government Oversight. And in your latest report, you’ve got a detail here, 1.7 roughly billion dollars through the Community Services Block Grant Program, but sub grants under the same program report 2.5 billion. So there’s an $800 million difference in this one program. And that seems to be emblematic of what’s going on. Tell us about that detail.

Sean Moulton: So the reporting of sub awards, we’ve had that in place for years now. Just one tier, so state governments get money and then we’re supposed to know if they’ve sent out awards to anyone, who exactly got them and how much. And unfortunately, there’s a glitch and has been for years in the system where if a sub award is reported and then updated, they change something about it, award description or some other factor, the dates change and they extend how long this project is for. Whatever the change, if they go back into the system and they change that, it doesn’t just update the record, it creates a new record. And so you start getting duplicate sub awards that start appearing on the system, same recipient, the same date, same amounts over and over and over again. I’ve seen it, where you’ll see three or four, five sub awards of the exact same amount. And so you start getting this duplication effect. And you get this kind of situation that we see in the Community Service Block Grant where the sub award is more than the original awards totaled, which is impossible, no one’s adding money to this, so give it to the state agencies. It is a massive error that’s going on, and it makes the rest of the data, I mean, it makes it so that you can’t trust it. If you see data and you don’t see these duplicates, you’re still not sure if you can trust the data.

Tom Temin: Sure. And another issue you point out is the vagary in the fields that describe award descriptions in the FADS program, FADS database, that you really can’t tell where the money is going. And there’s no uniformity to the way programs or recipients are designated or described in that data field.

Sean Moulton: Yeah, I mean, award description, you would think most people would just expect it to be a couple of sentences describing what that money was used for. It’s not rocket science. And yet, for assistance, we often see the name of the program, flood insurance payments, it just says that for every transaction, or CARES Act, the bill that the money came from, it will repeat that thousands of times. And while it gives you a little something, it doesn’t really tell you about the individual award in a way. And the reality is that on the contract side, we have problems with the award description as well. I’ve seen award descriptions that are nothing, they look like practically gibberish because they’re a series of procurement codes that the government knows. But for most of us on the outside, we would look at it and say it’s a string of numbers and letters and dashes, doesn’t tell me anything.

Tom Temin: All right. And then the third issue here, I wanted to ask you about this is a long standing issue, and this would be on the federal procurement database side, the corporate identification codes. And I guess the GSA is starting to move away from DUNS numbers. But even with the DUNS numbers, it’s supposedly universal numbering system for who is getting contracting money. That has never been all that clear, because of the numbers of companies that have subsidiaries and similar names and so on.

Sean Moulton: Yeah, there’s been some long standing problems with the DUNS numbers. I mean, first off, it’s a privately run system. And so the government has to pay for the privilege of using this identification number and posting it to the public. And it’s just kind of absurd that the government wouldn’t have its own numbering system, they number everything else, they love numbering things. And one of the other problems was, it was so easy to get a DUNS number that you would wind up with companies that have multiple DUNS numbers. And so you will get this fragmentation in the data, or Boeing would have 30 different DUNS numbers that you would have to keep track of. And so it was always a difficult system. And I’m very glad that the government is moving away. But we’re not there yet. We don’t have a government numbering system yet, not really. So we’re still relying on DUNS. And yet we have these ongoing problems. And you’re right that we’re talking about the Procurement Data System is a part where there’s this is problematic. But the other big gap is that on the assistant side, we did a lot of loans. And for some reason a few years ago, we stopped reporting DUNS numbers for people getting these loans. And so when we ramped up with PPP loans, and the disaster assistance loans, we had millions of transactions loans going out to businesses, where we don’t get DUNS numbers. And so it’s very hard to figure out if that company’s getting, multiple loans or multiple awards, because all you have is their name, and their address, you don’t have an easy to use number to track them through the other award.

Tom Temin: So essentially, it sounds like the government has a long standing technical and managerial process problem, but not really a requirements problem, because in the law, spending is supposed to be transparent.

Sean Moulton: It’s true. And some of these problems we’ve even tried to address through other legislation A few years ago, we did something called the DATA Act, the Digital Accountability and Transparency Act. And the whole goal of that was to try and get the spending data to be reliable and dependable and accurate. And we’ve made some progress. I don’t want to make it sound like it’s all doom and gloom. But there are some really critical pieces here that remain unfixed that remain missing. And until we address them. We’re always going to be left scratching our heads about some of these important questions about federal spending.

Tom Temin: Sean Moulton is senior policy analysts at the Project on Government Oversight. Thanks so much.

Sean Moulton: Thank you Tom for the pleasure.

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