TOIG Required Review Approach June 8, 2017 DATA Act Required Review Updates Pauletta P. Battle, Deputy Assistant Inspector General for Financial Management and Transparency Audits Treasury, Office of Inspector General

What We’ll Talk About Today DATA Act Brief Overview Oversight Mandatory Requirements Type of Engagement Audit Objectives and Scope Audit Approach Audit Steps Assessing Internal Controls Document Requests Managing the Challenge and Complexity of the DATA Act

DATA Act Brief Overview Digital Accountability and Transparency Act of 2014 Expands Section 3 of the Federal Funding Accountability and Transparency Act (FFATA) of 2006 to increase accountability and transparency in Federal spending. General Requirements: By May 2015 – OMB/Treasury to issue Government-wide financial data standards By May 2017 – Agencies to report financial data on USASpending.gov in accordance with OMB/Treasury established data standards By May 2018 – OMB/Treasury to ensure that the established data standards are applied to the data reported on USASpending.gov

Oversight Mandatory Requirements Agency Inspectors General, in consultation with GAO Review a statistically valid sampling of the spending data submitted by the Federal agency Submit to Congress and make publically available, a report assessing completeness, accuracy, timeliness, and quality of the data sampled implementation and use of Data Standards by the Federal agency 3 reviews originally due November 2016, November 2018, November 2020 Now due November 8, 2017; November 8, 2019, and November 8, 2021

Type of Engagement TOIG is conducting: A performance audit in accordance with the requirements of GAGAS as described in Chapters 6 and 7 (performance audits)

Audit Objectives & Scope (1) Determine the completeness, timeliness, quality, and accuracy of fiscal year 2017, second quarter financial and payment information submitted for publication on USASpending.gov; and (2) Assess Treasury’s implementation and use of the data standards.

Audit Approach Coordination with TIGTA Treasury made a single submission for publication on Beta.USASpending.gov for all Treasury bureaus and offices, including the IRS TOIG audit assesses the implementation and use of the Government-wide financial data standards established by the OMB and Treasury for Treasury bureaus/offices, except the IRS TOIG meets with TIGTA weekly to coordinate its audit and responsibilities with TIGTA, which has direct responsibilities for IRS  

Audit Steps Conducted a walk through with Treasury Treasury’s reporting entities DATA Act submissions Broker validation checks – warnings or errors Agency certification process – for completeness, timeliness, accuracy and quality

Audit Steps Statistical Sampling We stratified Treasury’s certified data submission for File C (second quarter Treasury financial and award data) as IRS and non-IRS transactions We then selected our sample using: Confidence level – 95 % Expected error rate – 50 % Sample Precision – +/- 5 % Resulted in approximately 366 transactions TIGTA auditors will test IRS transactions and TOIG will test non-IRS transactions Definition of an error and any variances will be closely coordinated and noted

Audit Steps Reconciliation TOIG performed reconciliations for files A and B File A to SF 133 File B to Object Class Codes Following up with Treasury on variances and will assess the reasonableness of Treasury’s process to resolve variances

Assessing Internal Controls As part of its review, TOIG intends to assess Treasury’s internal controls: over financial management systems (e.g. grants, loans, procurement) from which the data elements were derived over its data management process used to extract financial and award data reported under the DATA Act TOIG is responsible for internal control testing of Treasury systems and processes TIGTA is responsible for internal control testing of IRS systems and processes

Document Requests Inventory of source systems – to confirm Treasury's submission inventory is up-to-date SSAE 18/SOC 1 reports related to DATA Act source systems Internal Control Testing performed by management as outlined in OMB A-123 (management responsibility for internal control) Validation for 2nd Quarter submitted data – Treasury-wide and bureaus Reconciliation for 2nd quarter submitted data – Treasury-wide and bureaus

Document Requests 2nd quarter validation reports for the following systems: FPDS – Federal Procurement Data System (D1) ASP - Award Submission Portal (D2) SAM – System for Award Management (E) FSRS – Federal Sub-award Reporting System (F) Treasury's most recent Federal Managers’ Financial Integrity Act of 1982 (FMFIA) Statement of Assurance/Report

Managing the Challenge & Complexity of the DATA Act Common mistakes to avoid for a successful Required Review: Not Being Directly Involved with the Project Not Adequately Selling the Problem Inconsistent Messaging/Poor Communication Not Providing Adequate Resources Shifting Focus or Changing Priorities too Soon Ignoring Organizational Culture Ignoring or Underestimating Impact on Employees

DATA Act oversight questions can be sent to DATAAct@oig.treas.gov