OMB Taking Steps to Increase Transparency and Accuracy in Federal Assistance

3 min

On November 12, 2020, the Office of Management and Budget (OMB) issued M-21-03, Improvements in Federal Spending Transparency for Financial Assistance. In light of the government's expectation that it will provide more than $3 trillion in financial assistance in fiscal year 2020, this memorandum builds on earlier efforts to increase publicly available information regarding the use of federal assistance spending.

First, OMB requires that "all information in signed and legally binding grant award agreements" will be published on USASpending.gov. The memorandum notes that such publication will not include information that would be exempt from disclosure under the Freedom of Information Act, such as proprietary and business sensitive information. However, citing the recent revisions to the Uniform Guidance, OMB notes that federally negotiated indirect rates, distribution bases, and rate types must be published. This memorandum makes that requirement effective for fiscal year 2022 and designates USASpending.gov as the government site for publication. OMB also intends to display existing recipient data and information available on the System for Award Management on USASpending.gov. OMB will also convene a working group to identify other sources of existing recipient data that it can display on the website.

Second, OMB intends to standardize various details relating to grant awards. Within fifteen days of the memorandum's issuance, OMB will convene a working group to provide recommendations on developing a standard set of data elements for notice of awards, with the goal of moving toward a standard format for award agreements. At a minimum, the memorandum directs the working group to consider the terms and conditions, the notice of funding opportunity, indirect cost rate, intended performance results, and any other data elements relevant to the Uniform Guidance. Through this process OMB expects to publish revised Grant Standard Data Elements, which all agencies must adopt and implement.

Third, effective in fiscal year 2022, agencies must report all Assistance Listings (formerly the Catalog of Federal Domestic Assistance) and associated funding for all new awards reported to USASpending.gov. Currently, agencies report only the predominant Assistance Listing, even though multiple Assistance Listings may fund an award.

The memorandum also directs agencies to use "strong award descriptions." Such descriptions avoid acronyms and federal or agency-specific terminology and include plain-language descriptions of the purpose of the award and the intended beneficiary or recipient.

Last, OMB reminds agencies of existing guidance on reporting information to USASpending.gov and the requirement that agencies have controls in place to ensure that the reporting of federal funds is reliable. Specifically, agencies are required to have a DATA Act Data Quality Plan (DQP) through FY2021 that includes a testing plan and identification of high-risk reported data, including specific high-risk data that is referenced by the Transparency Act, as amended by the DATA Act. That said, OMB requires a DQP through the full expense of COVID-19-related funding.

*A special thank-you to Anna Kaye for her contributions to this article.