In response to the COVID-19 pandemic, the U.S. government is spending $2 trillion on federal support through the CARES Act. However, the current form of reporting on government spending is inconsistent, inaccessible and ultimately of limited use.
The promise of applying structured data, tagged in iXBRL, is the ability to leverage machine learning and AI to measure funding and its efficacy. So, when future crises arrive, whether financial, environmental or health-related, our decision on how to allocate resources can be data-driven and evidence-based.
The good news is we are now one major step closer to that capability. That’s because on April 15, 2020, USAFacts made public its first-ever, full-length 10-K tagged in iXBRL. The complicated financial workings of the US public sector have just become more transparent and accessible to anyone with an Internet connection.
While public companies are now comfortable publishing 10-Ks and 10-Qs in a machine-readable, iXBRL format, governments have been far slower at reporting their own financials in data rather than documents. The financial activities of governments at all levels— from the federal to the state to small municipal and local governments—have therefore remained murky. Information has been available in PDFs and sometimes in handwritten documents after a one-to-two-year lag.
In collaboration with DFIN and XBRL US, USAFacts is hoping to change all that. USAFacts just completed a ground-breaking project to make government data widely available by presenting its 2019 10-K in a machine-readable format. Specifically, data within the 10-K is being tagged in iXBRL using elements of the US GAAP taxonomy and portions of the demonstration release of the Comprehensive Annual Financial Report (CAFR) taxonomy, which was designed exclusively for state and local governments interested in reporting financial data.
“One excellent way to help with credibility and promote data standards projects is to develop pilots or case studies on early adopters,” says Craig Clay, President of Global Capital Markets at DFIN. “Now that USAFacts has taken this bold first step in demonstrating how government data can be tagged in iXBRL, we are hoping that governments, small and large, will consider doing the same.”
Why Provide Machine-Readable Government Financial Data?When former Microsoft CEO Steve Ballmer decided to deepen his commitment to philanthropy, he began by researching how the government raises and spends money. He soon realized that this data wasn’t easy to come by. Ballmer hired financial analysts and researchers to gather the data he needed, and then issued a report to share the findings. Out of this undertaking was born USAFacts, a not-for-profit, nonpartisan civic initiative providing comprehensive and understandable government data, including accessible analysis on US spending and outcomes with the goal of grounding public debates in facts. In 2017, USAFacts began publishing a 10-K for government financials— much as public companies have done for decades.
The decision to publish a 10-K for government spending “starts with the belief that government data should be readily accessible to the public,” says Poppy MacDonald, President of USAFacts. Tagging the 10-K in iXBRL, she says, represents a leap forward: “Structured data will improve speed, reliability, and consistency, and make people’s lives easier when it comes to accessing data.” She continues: “The more accessible we can make this information, the better.”