Bills seek to make more government financial reports publicly available

Requiring local governments to post audited comprehensive financial reports or the equivalent information on their websites would make it easier for citizens to see how tax dollars are spent, a state lawmaker said.

HB 2572, authored by Rep. Brenda Barton, R-Safford, deals with comprehensive annual financial reports, often referred to as CAFRs. They detail a governmental unit’s overall financial condition for the fiscal year, including receipts and expenditures, fixed assets and the balance of accounts such as pension funds.

“This report is the gold standard for transparency in government spending,” Barton said. “It has to do with showing the taxpayers, and anyone who is interested, all the sources of revenue that comes from these government entities.”

The bill would require local government entities to publish their comprehensive annual financial reports online for a minimum of three years.

The bill would expand a 2008 law requiring the state as well as local governments such as cities and school districts with more than 600 students to develop websites detailing receipts and expenditures greater than $5,000. The state’s website launched this year, while local governments are required to have theirs in place by 2013.

Two bills sponsored by Rep. Kimberly Yee, R-Phoenix, also aim to help taxpayers review local governments’ financial information online. HB 2422 would require local government websites to link prominently to approved budgets and estimated expenses. HB 2421 would require school districts’ websites to link to a state Department of Education site that aggregates districts’ proposed budgets, approved budgets and audited financial statements.

Both of Yee’s bills received House approval. HB 2421 received preliminary Senate approval, and HB 2422 was heading to the Senate floor.

Barton’s bill, which won House approval and was awaiting a final vote in the Senate, would allow the few local governments without websites to have the League of Arizona Cities and Towns post their financial information on its website.

Rene Guillen, the group’s legislative associate, said most local government entities already post financial reports online and that Barton’s bill is aimed at those that don’t.

“From the cities’ perspective it’s more of a technical issue than anything else,” Guillen said.

While cities and towns commonly use CAFRs, school districts file financial reports differently. However, Andrew LeFevre, a state Department of Education spokesman, said policy officials there consider districts’ financial reports that already will be posted on the department’s website sufficient to meet the bill’s requirements.

In December, Arizona Department of Administration launched the state’s online searchable database that allows the public to review in detail state government receipts and expenditures.

Byron Schlomach, an economist with the Goldwater Institute who advocated for the law requiring financial databases, said Barton’s bill complements that mission.

“The more transparency you have, the less corruption you will have,” said Schlomach, whose group promotes free enterprise and limited government.

Serena Unrein, a public interest advocate with the Arizona Public Interest Research Group, said the state has made huge strides in promoting government transparency.

“People on all sides of the political spectrum think government transparency is important,” Unrein said. “And the public has really started to clamor for more information about how their tax dollars are being spent.”

Facts about government transparency bills

• HB 2572 requires local governments to include comprehensive annual financial reports on their official websites.
• HB 2422 requires a city or town to post estimates of revenues and expenses and final budgets in a prominent place on an their official websites.
• HB 2421 requires school district to submit financial reports to the Arizona Department of Education and to post a link on their website to where their information is posted on the ADE website.