The U.S. Treasury Department is proposing changes in how record keeping is handled for several financial assistance programs, but the Government Finance Officers Association believes the changes aren't needed.
"We urge you to use the information provided through mandatory expenditure reports and the well-established audit requirements outlined in the federal uniform guidance to ensure compliance rather than establishing a new reporting system," said Emily Brock, director of the Federal Liaison Center of the GFOA.
The comments come in a letter from the GFOA to Ryan Law, deputy assistant secretary for privacy, transparency, and records at the Treasury Department. The changes would be enacted by amending the Privacy Act, a federal law which dictates many recordkeeping requirements at the Treasury.
Treasury is requesting comments about the proposed changes that would affect prime recipients and sub-recipients of federal funding through the State and Local Fiscal Recovery Fund, Emergency Rental Assistance, Homeowner Assistance Fund, Local Assistance and Tribal Consistency Fund, Capital Projects Fund, and State Small Business Credit Initiative programs.
The rationale behind the proposed changes includes evaluating "compliance with program requirements, including compliance with applicable federal laws, regulations, and executive orders; to support other audit and program oversight activities; to identify potential waste, fraud, and abuse; and for research and statistical purposes."
GFOA maintains that, "Upon engagement through award letters, state and local prime recipients have already been legally required to report the use of federal funds to Treasury since the inception of these programs."
The four-page letter lays out several arguments for not tinkering with the existing rules, including the possibility of repetitious reporting duties and added expense for state and local governments.
"Requiring the upload of such a large volume of documentation into a new system not only demands substantial time and effort but also heightens the risk of minor data inconsistencies introduced during migration, even when all procedures are properly followed," said the GFOA.
Making the new rules retroactive is another bone of contention.
"Compliance information was collected according to the policy when the policy decision – the obligation or the expenditure – was made and applied," said the GFOA.
"Any retroactive reporting requirements associated with a new system of records could be duplicative and could fail to recognize the evolving nature of Treasury regulations for these programs."
GFOA also maintains the new rules lack clarity about who is responsible for submitting the new data as funding flows to both "prime recipients," and "sub-recipients."
Comments on the proposed changes were due and sent in by the GFOA March 6.
The proposed new rules have also attracted attention from organizations with privacy concerns, including the National Consumer Law Center.
They say the new rule would "allow Treasury to collect, maintain, and share information, including bank account information, social security numbers, and employment and income information, from eight separate Treasury-run programs."
"The federal government's overbroad and imprecise proposal opens the door to the invasion of privacy of millions of people," said Steve Sharpe, senior attorney at NCLC.
"The proposed system could capture data on people who have little to no relationship to Treasury programs."
