A review of the Department of Homeland Security’s spending data for Q2 of fiscal year 2017 revealed $1.9 billion of the department’s transactions were not linked to their corresponding award-level transactions through unique identification numbers, one of several accuracy issues cited in a recent inspector general report.
While acknowledging DHS is improving its data reconciliation procedures to reduce these misalignments, the IG determined the department needs to have greater oversight into the quality of data submitted by its component agencies under the Digital Accountability and Transparency Act of 2014 (DATA Act).
“DHS’ internal controls over its DATA Act processes were not sufficient to support the submission of accurate, complete and timely spending data for FY 2017/Q2. Until DHS strengthens its existing controls and applies additional controls over its DATA Act processes, the quality and transparency of its published spending data remains questionable,” the report said.
“Although DHS directed each reporting component to develop and apply internal procedures to reconcile these and other types of data errors prior to submission, it did not ensure that the components complied with that directive.”
For example, the report said that because the National Protection and Programs Directorate, a subcomponent of DHS, did not have procedures in place to address known discrepancies in spending data, it could not assure DHS that such data was fully validated. DHS would then not be able to fully certify the accuracy of that data to the Department of Treasury’s DATA Act Broker.
In fact, only the U.S. Secret Service had taken significant steps to develop a plan, assess risks and establish controls for its DATA Act program, according to the report.
According to the report, DHS’ primary focus approaching the act’s May 2017 deadline for submitting Q2 2017 financial data was to resolve the critical data issues that would have prevented them from meeting the deadline, and that misalignments in the data were not addressed until after the first submission.
“Despite its inability to align almost one quarter of its procurement obligations, DHS still certified that the data was accurate and complete. Because the Broker does not accept agency submissions without a SAO certification, to not certify would have resulted in DHS’ failure to comply with DATA Act requirements,” the report said.
The IG investigation found that nearly 64 percent of DHS’ financial procurement and awards data was inaccurate with financial-related errors represented almost $1.7 million in DHS’ total obligations for the quarter.
The IG’s methodology for testing, assuming that a transaction was incorrect if one attribute in that transaction did not match the source data, was disputed by DHS, which argued that comparing the total number of attributes to the number of erroneous attributes would result in an inaccuracy rate of 18 percent.
The DHS IG made six recommendations for improving the accuracy of DHS DATA Act reporting:
- Strengthen DHS’ internal controls to reconcile misalignments among its spending data files and verify which data errors are due to legitimate timing issues;
- Verify finalization of NPPD’s DATA Act validation procedures;
- Develop a quarterly performance metric that measures the number and total value of misaligned transactions that cannot be traced to award files;
- Develop and apply an effective solution to correctly assign program activity names and codes to ensure complete File B data;
- Develop a control process that ensures all changes made to data fields are appropriately approved and logged;
- Incorporate DATA Act-specific controls into existing OMB Circular A-123 processes at the departmental and component levels.
DHS disagreed with one of the six, arguing that Office of Management and Budget and Treasury awards and a clean audit opinion indicate that its spending data is of good quality.