Feedback: Obligation

[bsweger]

As of May 8, 2015, the data element below has been finalized and can be found here.

• Obligation

[JimHarperDC]

In our study (pg. 37), we defined obligation as you see below. It's an entity with many properties, and it's important that the (non-optional) ones be included so that obligations can be recognized and placed in context, and so that their content is available. In addition to what's below, a copy of the obligation's text itself is a part of this data element. AmIright?

Obligation An abstract class representing a binding agreement or statutory requirement that will result in outlays immediately or in the future. ●«Identifier» (obligationId) ●obligationId: string {uniquely identifies the obligation} ●authority: Authority ●allocation: Allocation {optional} ●apportionment: Apportionment {optional} ●summary: string {description of the obligation} ●amount: int ●obligor: ExecutiveAgent

[halsteinberg]

I cannot foresee any problems in the definition of Obligations for establishing standards. The issue will be in the use of the standard term.

Currently, usaspending.com and the Statement of Spending report as spending, the amounts obligated. This is not true. Obligated amounts might never be spent. Furthermore, the term Obligation is not understood by persons not cognizant of the Federal budget process. They do not realize that obligations is not spending. Hence, the reporting resulting from the DATA Act must address this difference and eliminate any possibility of misleading information.

[bsweger]

@halsteinberg Thanks for pointing out the potential confusion around obligations. In addition to obligations, the current list of DATA Act elements also includes appropriations and outlays to better provide information about the lifecycle of federal spending. Hopefully this addresses your concern above, but please chime in again if it doesn't.

For reference, here's the entire list of DATA Act data elements: http://fedspendingtransparency.github.io/dataelements/

I believe that the definition of outlays is among the next batch being released for public input.

[halsteinberg]

Yes, appropriations and outlays will provide additional information about the life cycle of federal spending. However, there is still another element that would have to be added. I suspect you realize that while the government has outlayed cash for a government service/program, there could be costs for which cash payments are not yet required. Thus, for persons to obtain the total cost of a government service/program, a data element in which either accrued cost or total cost will be needed.

Also, as I said, I have no problem with the definition of obligation. The problem is the way in which the amounts are used to report something else, i. e., spending. Thus, it is the reporting of the obligation information that will need to be addressed.

[halsteinberg]

Yes, appropriations and outlays will provide additional information about the life cycle of federal spending. However, there is still another element that would have to be added. I suspect you realize that while the government has outlayed cash for a government service/program, there could be costs for which cash payments are not yet required.
Thus, for persons to obtain the total cost of a government service/program, a data element in which either accrued cost or total cost will be needed.

Also, as I said, I have no problem with the definition of obligation.
The problem is the way in which the amounts are used to report something else, i. e., spending. Thus, it is the reporting of the obligation information that will need to be addressed.

Becky Sweger mailto:notifications@github.com Monday, April 06, 2015 9:31 AM

@halsteinberg https://github.com/halsteinberg Thanks for pointing out the potential confusion around obligations. In addition to obligations, the current list of DATA Act elements also includes appropriations and outlays to better provide information about the lifecycle of federal spending. Hopefully this addresses your concern above, but please chime in again if it doesn't.

For reference, here's the entire list of DATA Act data elements: http://fedspendingtransparency.github.io/dataelements/

I believe that the definition of outlays is among the next batch being released for public input.

— Reply to this email directly or view it on GitHub https://github.com/fedspendingtransparency/fedspendingtransparency.github.io/issues/20#issuecomment-90065607.

Sent with Postbox http://www.getpostbox.com

[MJB-NIH]

The definitions used by OMB for "obligation" (and "outlay") are satisfactory as they stand. The recommended definition in the draft DE#77 and the background information are reality based.

What was missed is that presentation of accounting information needs to make distinct transactions that involve multi-year and no-year availability budget authority from appropriations. With annual appropriations -- the new obligation is incurred in same fiscal year period as the enacted appropriation (or Continuing Resolution). But the site will also have to accommodate new obligations incurred against a the unobligated balance from prior-year, e.g. a 3-year availability appropriation totaling $1 billion was made in FY 2013 where $0.8 billion was obligated in same FY 2013, another $0.1 billion obligated in FY 2014, with the remaining $0.1 billion incurred in FY 2015. Agency enterprise systems cover the requirement using a"budget FY" to identify year of enactment and second "FY" field to provide for obligation/outlay reporting. Web site data elements need to mimic that capability.

Page 27 of Section 20 of OMB Circular A-11 talks to the phased obligation situation: "Outlays during a fiscal year may liquidate obligations incurred in the same year or in prior years. Obligations, in turn, may be incurred against budget authority provided in the same year or against unobligated balances of budget authority provided in prior years. Outlays, therefore, flow in part from budget authority provided for the year in which the money is spent and in part from budget authority provided in prior years."

Previous comments have noted that the term "spending" -- which resonates with the general public and those unfamiliar with Federal government budgetary resource tracking -- has blurred the environment so that requires the site host to display "front and center" what the "numbers mean". A similar term also complicates matters, namely, "expenditure" or "expended". The stated formal definition of "obligations" warrants an accompanying 'plain English' equivalent such as "legally binding promise to make payment for goods or services". Same approach should apply for term "outlay". An outlay is same as a payment made (and incorporate synonym 'disbursement' perhaps that is popular with DOD elements and has some adherents in private sector).

An intermediary measure mentioned by another commentator, namely "Cost", makes sense -- and could be used as a substitute for "expended" measurement. Some agency financial systems recognized and tracked as invoices submitted by vendors or grant recipients were processed--(Energy Department did in year's past) but had not yet been paid out.

All of these measures can be interpreted by the USSGL, which is what I believe is the "business process recommendation" articulated in DE#77.. I'm not a systems accountant but my exposure indicated that codes 4801, 4802, 4901 and 4902 capture total obligations. Two of those SGL codes, 4802 and 4902, track the subset of payments made against overall obligations including delivered and undelivered orders. (I will ignore the adjustment codes). Relating SGL codes to "cost" I leave to someone with more expertise than I possess in execution accounting.

Excerpt of SGL for paid and unpaid obligations is furnished below.

[HelenaSims]

AGA established a work group charged with responding to inquiries by the federal government, regarding implementation of the DATA Act. The following response is being submitted on behalf of AGA's work group, which is comprised of state, local, tribal and university practitioners from across the country. In commenting on specific data elements, our work group thought it important to indicate that - while the work group supports the standardization of definitions and reporting across federal agencies, - we are uncertain as to whether data standards will apply to entities receiving federal funds. Section5 (b)(7) of the DATA Act states that the Director has a year after submitting a report on the pilot program to "...issue guidance to the heads of Federal Agencies as to how the Government-wide financial data standards shall be applied to the information required to be reported by entities receiving Federal awards..." This provision makes it appear that, after the pilot program, some financial data standards may not be applied to information reported by entities receiving federal awards.

In addition, in order to clarify the reporting and posting responsibilities of recipients, and which data elements will be reported at the awardee and subawardee level, it would be helpful for the federal government to provide the data source for each data element. This information was included in the data model for FFATA reporting in Appendix C of the OMB Guidance for Federal Spending Transparency: Subaward and Executive Compensation Data Reporting Requirements, dated August 27, 2010.

Comment on Obligation Depending upon which federal agency is requesting information, the reporting requirements for obligations by non-federal recipients using the Federal Financial Report, Standard Form 425, can be inconsistent between programmatic and financial reporting. The inclusion of the words "legally binding agreement" in the recommended definition may reduce the inconsistencies, if the definition of obligation is consistently applied across all agencies. In addition, the recommended definition does not address timing requirements for liquidating obligations, which does not align with closeout procedures that state obligations should be liquidated within 90 days of closure.

[HerschelC]

Wow! Lots of good comments. My comment is easy by comparison. Don't use pronouns when establishing data definitions. For example, "When you place an order..." Use proper nouns in all cases for readability. (I'm not in government, so I don't place orders.) It may seem a bit picky, but it helps with readability of the definitions. It could lead to outright confusion in more complex examples; it's a good general practice.

[bsweger]

Update 4/20/15: Thank you for your feedback on the data element obligation. We will consider your feedback as we continually assess how we can improve data definitions. You may still contribute the discussion for other data elements. Check http://fedspendingtransparency.github.io/dataelements/ to find data elements with open feedback pages.