By Lee Klumpp, CPA, CGMA
The 115th Congress has been busy with tax reform but has managed to introduce a proposed bill H.R. 4887 (“Grant Reporting Efficiency and Agreements Transparency Act of 2018” or “GREAT Act” or the “Act”) on Jan. 29, 2018, by Representatives Foxx (R-N.C.), Gomez (D-Calif.), Issa (R-Calif.), Quigley (D-Ill.), and Kilmer (D-Wash.). Three other members have signed on to the bill since it was introduced. The bill is currently before the House Committee on Oversight and Government Reform.
The sole objective of the Act is to modernize federal grant reporting by standardizing the information recipients submit to agencies. It is believed by its sponsors that the GREAT Act will transform federal grant reporting from disconnected documents into open data by directing the executive branch to adopt a standardized data structure for the information grantees must report to agencies. By replacing outdated documents with open data, the GREAT Act is intended to deliver transparency for grant-making agencies and the public and allow grantees to automate their reporting processes, thereby reducing compliance costs.
The GREAT Act would require the creation of a comprehensive and standardized data structure, or “taxonomy,” covering all data elements reported by recipients of federal awards, including both grant and cooperative agreements.
The sponsors of the Act believe that it can achieve and accomplish the following:
- Modernize reporting by recipients of federal grants and cooperative agreements by creating and imposing data standards for the information that grants and cooperative agreement recipients must report to the federal government.
- Implement the recommendation by the Director of the Office of Management and Budget, under Section 5(b)(6) of the Federal Funding Accountability and Transparency Act of 2006 (31 U.S.C. 6101 note), which includes the development of a “comprehensive taxonomy of standard definitions for core data elements required for managing federal financial assistance awards”.
- Reduce burden and compliance costs of recipients of federal grants and cooperative agreements by enabling technology solutions, existing or yet to be developed, by both the public and private sectors, to better manage data recipients already provide to the federal government.
- Strengthen oversight and management of federal grants and cooperative agreements by agencies through consolidated collection and display of and access to open data that has been standardized and, where appropriate, transparency to the public.
The proposed legislation tasks the Director of the Office of Management and Budget (OMB) and a leading grant agency, that will be designated when the bill has passed, with implementation. The implementation goals are as follows:
- Within one year: Establish government-wide data standards for information related to federal awards reported by recipients of federal awards.
- Within two years: Issue guidance to grant-making agencies on how to leverage new technologies and implement the new data standards into existing reporting practices with minimum disruption.
The bill directs OMB and a leading grant agency to publish grant reporting information, once transformed into open data, on a government-wide website, such as the existing grants.gov portal. It provides exceptions and restrictions, including:
- No personally identifiable or otherwise sensitive information will be published.
- Information not subject to disclosure under the Freedom of Information Act (Title 5, Section 552) will not be publicly disclosed.
- The OMB Director to permit exceptions on a case-by-case basis.
The Act would require each grant-making agency to begin collecting grant reports using the new data standards within three years.
The sponsors of the GREAT Act believe that the federal government, the funding agencies, recipients and the public will all benefit from the Act’s implementation in the following ways:
- Reduce recipient compliance costs by automating the compilation and submission of reports to federal agencies.
- Create a single consolidated data set of post-award reports for federal grant recipient information applicable to all grant-making agencies and programs.
- Foster increased federal and public oversight and transparency into the distribution of federal funding.
- Facilitate the adoption of modern technologies for grant reporting.
This article originally appeared in BDO USA, LLP’s “Nonprofit Standard” newsletter (Spring 2018). Copyright © 2018 BDO USA, LLP. All rights reserved. www.bdo.com