Rep. Darrell Issa, R-Calif., talks to a crowd of reporters after leaving a House GOP conference meeting in the basement of the U.S. Capitol July 15. (Chip Somodevilla / Getty Images)
At the Interior Department, workers manually key financial reports into governmentwide accounting systems. The Department of Homeland Security relies on manual processes to ensure all of its assistance programs are included each year in a catalog of federal domestic assistance programs. And the Defense Department enters data manually from its financial reporting system into a Treasury Department financial system and another multiagency system.
These are a sampling of numerous examples cited by a new congressional investigation that found at least 21 agencies still process vast volumes of data by hand, often causing errors as they do so.
"Manual processes are inherently problematic, but agencies did not report significant efforts to eliminate them," said a staff analysis by the House Oversight and Government Reform Committee, which conducted the study by sending detailed questionnaires to more than two dozen large agencies.
Kaitlin Lee, a senior developer at the Sunlight Foundation, which promotes greater transparency of government information, said she is not surprised by the findings. Her group conducted an extensive review last year of data posted on USAspending.gov, a website containing federal contracting and grant data.
The foundation's review found the data on the site contained gaps and errors.
"Most agencies use antiquated and fractured systems, requiring manual data entry between systems, which almost always results in errors," Lee said. "People are people, and they will make mistakes."
Agencies are required to report their contract and grant information to the website's database within 30 days of when money is set aside — but that often does not happen because the process of transferring the data is so labor-intensive for some agencies.
For its part, the Interior Department plans to switch to a new financial system, which will replace numerous customized systems that do not communicate with each other and cannot be accessed at the department level.
In 2007, when Interior began reporting data to USAspending. gov, about 66 percent of its grant dollars were included on the website. Those numbers dropped to 15 percent of grant dollars in 2010.
Ali Ahmad, spokesman for the House Oversight and Government Reform Committee, said mandatory standards for financial reporting will help to eliminate manual processes.
Bipartisan legislation pending before Congress would create the Federal Accountability and Spending Transparency Board, which would "establish common identifiers and consistent reporting standards for all federally collected data."
Also, the Digital Accountability and Transparency Act, introduced by Rep. Darrell Issa, R-Calif., in June, would create a single electronic platform where the public could compare data reported by agencies and recipients of federal funds. Issa is chairman of the committee that did the investigation.
DoD ran into major coding errors while reporting contract obligations performed in the U.S. and overseas. A July report by the Congressional Research Service found that DoD mistakenly entered codes into the wrong data field, which led to millions of dollars being classified as money spent in places like Turkmenistan and Moldova instead of Texas and Maryland, which share the same two-letter code.
"These failures are costly because they prevent Congress and the public from getting a complete and accurate picture of federal spending, making it considerably harder to responsibly cut the budget," Ahmad said.
By making the study public, Ahmad said the committee has taken the first step to ensure agencies automate more of their financial reporting processes.
The Obama administration says it is working on the problem.
"We agree with the need to update federal financial systems, and the Obama administration has made great strides to do so while cutting a billion dollars from troubled projects," said OMB spokeswoman Moira Mack.
In June 2010, OMB halted spending on all large financial management modernization projects to review dozens of projects considered "high risk."
OMB terminated modernization projects at the Veterans Affairs Department and Small Business Administration and reduced the size of projects at eight other agencies, including the Health and Human Services, Transportation and Homeland Security departments. Overall, project budgets were decreased by $1.6 billion.
As the number of federal workers decrease through attrition and early retirements, agencies will be forced to rely on more automation for financial reporting, said Relmond Van Daniker, executive director of the Association of Government Accountants. But change will happen slowly.
Meanwhile, there is sure to be increased demand for different federal data that will require modifications to current financial systems, said Jeffrey Smith, chief financial officer for the Equal Employment Opportunity Commission. As requirements for various types of data evolve, "there has to be an orderly process for the systems to catch up."