Great story from Denise Lugo from Bloomberg today on the status of U.S. Federal Agencies use of the eXtensible Business Reporting Language (XBRL) for increased transparency, accountability and analysis of both financial and business information used by the Federal Government. The article states that the federal government is positioned to “greatly expand their use of eXtensible Business Reporting Language (XBRL) after observing how XBRL has made inroads within the U.S. banking sector as a standardized way to submit data, according to a panel discussion in New York held by the American Accounting Association.”
According to a June 30, 2016 US Government Accounting Office (GAO) study :
"For fiscal year 2014, 15 of the 24 Chief Financial Officers Act (CFO Act) agency inspectors general (IG) determined that their agencies did not comply with criteria in the Improper Payments Elimination and Recovery Act of 2010 (IPERA). This is the largest number of CFO Act agencies reported as noncompliant under IPERA since the requirement for IGs to report on their agencies' compliance was implemented in fiscal year 2011, and represents an increase of 4 agencies from fiscal year 2013. In fiscal year 2014, IGs reported 38 programs accounting for $100.6 billion in estimated improper payments as responsible for instances of noncompliance."
$100.6 billion is a lot of taxpayer money and hopefully with the deployment of open, freely available technologies like XBRL – the federal government can begin to use more effective financial data analytics to track taxpayer dollars used by federal agencies to reduce improper payments and or evaluate and analyze potential financial/ business risk.
Why is XBRL important for the Federal Government financial oversight and better government?
XBRL is a machine-readable data format that can be used in spreadsheets for faster, cheaper and better data analysis and accountability of massive amounts of both business and financial data (Big Data/ Cloud Analytics). The IMA supports the use of the XBRL data standard for both public company financial statement and government financial statement disclosures and is one of the original members of the XBRL Consortium through the leadership of Ms. Liv Watson (at that time – an IMA Board Member) and early evangelist of the XBRL data standard for the IMA.
What is XBRL’s relevance to the DATA Act and What is the DATA Act?
The use of XBRL like technologies was mandated by the US Congress in 2014 through the DATA Act. The DATA Act, is an open government law that tasks US government agencies with unifying financial reporting in public, standardized, machine-readable format on the USASpending.gov website. The DATA Act is putting pressure on federal agencies to get their data in order and use the XBRL standard to reduce such things as improper payments made by federal agencies by tracking federal spending more effectively.
President Obama last year announced the use of XBRL for the Data Act.
The use of XBRL is a golden opportunity for management accountants who play a major role in preparing financial information for both government agencies and public/private companies and will also assist them with better forecasting and performance analysis.
Read Brad Monterio's article on XBRL and its benefits to management accountants in the April 2016 issue of Strategic Finance Magazine.
Join the IMA's Technology Solutions Practices Committee and learn more about XBRL and be a part of its implementation across the public and private sectors...