Funding disclosure in public communications

Full Title:
COST Act

Summary#

This bill would require federal agencies and people or groups who run projects with federal money to say how much of a project is paid for by the federal government and how much comes from other sources. It adds a new rule to federal law that covers statements, press releases, requests for proposals, bids and similar public documents (except very short messages of 280 characters or less). The bill also requires annual compliance checks by the Office of Management and Budget (OMB) and a public, anonymous way to report violations.

  • Main change: Agencies and recipients must list (1) the percentage and dollar amount paid with federal funds and (2) the percentage and dollar amount paid by nongovernmental sources in most public communications about a federally funded program, project, or activity.
  • Certification: Recipients must certify in performance progress reports whether they followed the disclosure rules for communications of 280 characters or less.
  • Oversight: OMB must annually review a random sample of public communications for compliance and publish the findings.
  • Reporting tool: OMB must provide a publicly available anonymous mechanism to report noncompliant communications within one year of enactment.
  • What is unclear: The bill does not explain how to calculate complex funding mixes (for example, indirect costs or shared overhead) or what penalties apply for noncompliance.

What it means for you#

  • Federal agencies: Must ensure their public documents about federally funded projects include the required percentage and dollar disclosures. Agencies will be part of OMB’s annual review sample.
  • Recipients of federal funds (including state and local governments, universities, research grant recipients, contractors, nonprofits): Must include the funding breakdown in most public documents that describe projects paid in whole or in part with federal money. They must also certify in performance reports about compliance with the short-message (<=280 character) disclosure rule.
  • Businesses responding to RFPs or bid solicitations: Solicitation documents must state the share and dollar amount of federal funding for the project. This could change how proposals are written and reviewed.
  • Journalists and communicators: Press releases and public statements about federally supported projects must include the funding percentages and dollar amounts, except for very short social media posts.
  • Taxpayers and the public: Public documents will more often show how much of a project is paid by federal funds and how much comes from non-government sources. OMB will publish review findings and provide a way to report noncompliant communications.

Expenses#

No publicly available information.

  • The bill requires OMB to do an annual review and to create an anonymous reporting mechanism. This will likely create administrative costs for OMB.
  • Agencies and recipients may need staff time, systems changes, and legal or communications work to add the required disclosures to documents and to collect the information.
  • The bill does not include a fiscal estimate or say who will pay for increased staffing, training, or IT work.
  • The bill does not specify fines or other enforcement costs.

Proponents' View#

  • The bill appears intended to make government spending more transparent by putting a clear dollar amount and percentage on publicly described projects.
  • Supporters may argue this helps taxpayers see how much of a project is paid for with federal money versus private or local funds.
  • This could be seen as improving accountability for how federal funds are used and reducing misleading statements about who pays for projects.
  • Requiring disclosure in solicitations and press materials could help private bidders and the public compare projects on a common basis.

Opponents' View#

  • One concern is the added administrative burden on agencies and on recipients, who must gather and publish funding breakdowns for many documents.
  • The bill does not clearly explain how to calculate funding shares in complex cases (for example, projects with indirect costs, matching funds, or layered grants). This could lead to inconsistent or confusing disclosures.
  • The certification requirement focuses oddly on communications of 280 characters or less, which is unclear and may be a drafting error; the bill does not explain why short messages are singled out.
  • The bill does not set out penalties or enforcement steps for noncompliance, so it is unclear how the rules would be enforced.
  • An anonymous public reporting tool could lead to a large number of reports, including frivolous ones, which may increase OMB and agency workloads.