There has been a great deal of talk in Washington about federal spending. It is now time for Congress to take action and require data standards in the complex areas of federal spending. Currently, the U.S. federal government does not centrally organize the details of its spending data. This not only creates an environment that supports wasteful spending, but makes it extremely difficult to quickly identify wasteful and fraudulent practices as agencies execute the $3+ trillion federal budget.
The Treasury Department, the Census Bureau, the General Services Administration, the White House, and individual agencies each track different spending details independently—and they mostly use documents, not technology. Consider the difference between searching through the file cabinet in your garage for a copy of a cancelled check from last year, or going online to your bank’s web site and searching on the payee’s name. Now, imagine that effort at the volume of the federal government—simply overwhelming!
Significant gains for improved insights and reduced costs are being realized today by leading companies and advanced governments that have replaced inaccessible documents with searchable data. A critical first step in the direction for visionary and pragmatic leadership is to organize data by adopting data standards, such as common identifier codes and languages, across the whole enterprise.
The U.S. government has not done this for its spending data—because none of the agencies in charge of pieces of the puzzle—not Treasury, not Census, not the GSA, not even the White House—have the authority to impose data standards across the whole government.
Establishing data standards – creating searchable, integrated data repositories—makes it possible to take advantage of cutting-edge analytic technologies that have improved efficiency, saved millions of dollars and made processes more effective in private companies and within some state governments. By integrating transactional, operational and financial data by deploying analytics, companies can identify waste, isolate questionable transactions, reduce fraud and identify savings while improving service. Teradata has seen the benefits of these analytics tools firsthand.
For example, the State of Michigan, a Teradata customer, has been recognized by the National Association of State CIOs for its leadership and emphasis on value-based decision-making and outcome-based reporting. Michigan once stored its data in hundreds of separate locations across multiple agencies. The state’s many users now have immediate, broad visibility into the data across several agencies. What began as an IT cost savings effort has resulted in significant benefits for the state through streamlined operations, fraud reduction and cost avoidance—including saving the state one million dollars a day, mostly within the Department of Community Health and the Department of Human Services.
These insights have resulted in reduced lead poisoning among small children, cross-jurisdiction visibility to previously unconnected crimes, identification and collection of unpaid child support, improved foster child placement with the ‘best fit’ families, and increased accuracy in food and family benefit distribution. Michigan has a uniform data and knowledge management process which links data across multiple data sets in multiple agencies—and sharing it—bringing tremendous success and improvements to the state government and ultimately saving taxpayers valuable dollars.
At the start, Michigan was where the federal government is today: with a lack of a centralized view into its data across agencies. Fragmented views made it difficult to spot fraud from questionable contracts and double billing, unlawful dispensing of drugs, and fraudulent benefit claims. Lack of integrated insight also impacted social services, affecting thousands of welfare cases and diverting dollars from the state’s most vulnerable populations.
As the U.S. government continues to use an inefficient process to track spending – housed in siloed databases at different agencies – analytics cannot be deployed successfully. Waste and fraud will continue to go undetected. How much fraud and waste? It cannot be measured; only estimated.
Signs of Change
Teradata co-founded the Data Transparency Coalition in 2012, and today, the coalition is the foremost private-sector advocate for the DATA Act. With the coalition’s leadership, there are signs that the need for change is getting through to policymakers in Washington.
The executive order and policy memorandum signed by President Obama on May 9 was the first step taken making open and machine readable the new default for government information. This action essentially calls on federal agencies to make all their data searchable so that information resources are easy to find, accessible, and usable.
There are also moves in Congress. The House Committee on Oversight and Government Reform and more than 20 high-tech companies, including Teradata, gathered on Capitol Hill on May 16 to host the second DATA Act Demonstration Day. On May 21, a bipartisan group of members in the House and Senate introduced the Digital Accountability and Transparency Act (DATA), which then unanimously passed the next day in the House Government Reform and Oversight Committee. As of this writing, the bill is pending consideration by the full House of Representatives and the Senate Homeland Security and Governmental Affairs Committee.
The events of last month indicate positive change. The actions of the President, the Congress, and the House Committee were steps in the right direction. But they were the first steps of a long journey. It is now on the shoulders of the members of Congress to pass the DATA Act and mandate agencies to apply newer, smarter principles to complex, bureaucratic areas of the federal government’s operations; the most complex of these being spending. To suggest that billions of dollars in savings are possible at the federal level is not unreasonable. To do so, the members of Congress must first create data standards for the government’s own financial, procurement, grant and assistance data, as would be required by the proposed legislation.
While not on the front page of your local newspaper, the DATA Act is one of this year’s most significant pieces of legislation. The Act’s fast passage would mark an intelligent leap forward in government management and a meaningful reform that applies technology to remedy a pervasive problem.
The legislation also would pave the way for agencies to apply analytics tools to federal datasets in new ways – to create more transparency, opportunities for discovery, and more insight for decision making. These powerful analytic tools are now available from many technology companies as well as Teradata.
From a taxpayer point of view, the DATA Act will create new opportunities for all of us to access helpful information about our government and processes that affect our communities and fellow citizens. For example, with regard to federal grant dollars, citizens will be able to learn what state, city and county are receiving federal dollars by agency, grant type, by total amount and total volume. More importantly, citizens could discover details around how many grantees receive one or more grants. This includes grants to individuals, grants to foreign organizations, federal institutions and more, currently not possible with existing systems. Data standardization will transform government and allow taxpayers to hold the government accountable in ways never before seen or experienced.
I strongly urge readers of this column to contact your local member of Congress and urge them to support and vote in favor of the bipartisan DATA Act.
Tim Day is vice president of government affairs at Teradata based in Washington, D.C. He has led the company’s government affairs office since 2001. Prior to joining Teradata, he served as Chief of Staff to former U.S. Congresswoman Deborah Pryce (R-OH).