PSA for Local Governments: There’s Something Missing from Your Financials

Man working at computer thinking

(And you’ll never get public consensus without it)

At ClearGov, when we talk to local governments about transparency, we often hear a familiar refrain, ‘Thanks, but we’re already very transparent. We post our annual budget right on our website for everyone to see.’

They’re right, of course. With all the recent attention around OPEN data laws, most local governments dutifully post a PDF of their annual budget somewhere on their website — and that does technically check the transparency box. But, there’s a big difference between being transparent and being clear.

People today are awash in data — and simply piling more on isn’t helpful. That’s especially true when it comes to communicating budget information to taxpayers. There’s more to transparency than dutifully documenting and publishing line item after line item for posterity.

To be clear, you need to go beyond posting the annual 300-page PDF to your website, and actually distill all those numbers into something more digestible and more accessible to the average citizen. By “distill,” I mean that you have to extract the essential details and put them in context so people understand. If that sounds like a lot more work for you, it’s really not. Please hear me out.

Without context, what do all of those numbers really mean?

For example, you can tell taxpayers you spent $50M on education, but without a frame of reference, do they understand what that really means? Is $50M too much? Too little? Suppose you tell those same people that you spent 25 percent less than similar towns and your students scored 10 percent higher on assessments. That’s valuable context. Now they have a frame of reference and can begin to make an informed decision about what they value and how they want their tax dollars spent.

The goal of transparency is not only to inform citizens, but to foster understanding and in turn build trust. Your annual budget answers who, what, when, and where. Context adds the missing why and how. In the end, it helps you tell a more complete story — one that residents can appreciate and therefore may be more inclined to support.

Information overload won’t educate people about the truth, it will only obscure it.

Presenting your financials in a clear and compelling format is in everyone’s best interest. When citizens don’t understand where their tax dollars go, they lose trust and they get angry. They make phone calls. They show up at town meetings (the few that actually have time on a school night). They post on social media. They spread misinformation (often unintentionally, but the results are nevertheless destructive).

You work hard to plan for your community and make the difficult decisions about who gets what services, how much they get, and who pays. The public deserves to know the rationale behind those decisions. After all, without context, it’s unlikely they’ll arrive at the same conclusions you did. And, if you don’t give people the whole story, they’ll look elsewhere to fill in the gaps. That means someone else will tell your story for you and that rarely ends well.

In a word, “context” is the whole reason our CEO founded ClearGov in the first place. Four years ago, a simple attempt to cast an informed vote on a proposed tax increase in his town led him down a fiscal rabbit hole. After digging through the Comprehensive Annual Financial Report (CAFR) for answers, he came up empty handed. In frustration, he invented a platform that aggregates and translates complex fiscal data into clear, actionable intelligence for government agencies and the residents they serve. Most importantly, the platform allows government officials ample opportunities to easily add valuable context to their story.

Since then, ClearGov has created infographic-based transparency profiles for every civic entity in the U.S. — including yours. All told, our database now spans 40,000+ municipal profiles and displays $15.7 trillion in local government spending. Cities and towns can claim and customize their ClearGov profiles for free or subscribe to a premium model with all the bells and whistles. In the current age of misinformation, hundreds of local governments are already leveraging this model to drive transparency, improve public trust, and build consensus.

Let's be clear, claim your free transparency profile.

ClearGov lets you add essential context to your financials.

Because ClearGov has already built fully operational profiles for every local government, the hard part (translating your financials into compelling, infographics) is essentially done. You supply a simple report and we update your numbers for you. In fact, you can publish updated numbers more frequently than you do now. Instead of posting a PDF once a year, you can actually update the infographics every quarter or every month if you like.

ClearGov makes adding context easy too. Here are three ways you can use your ClearGov profile to fill in the gaps on your financials — and drive better understanding and engagement in the process:

1. Add benchmarking: Compare your performance against relevant communities that provide similar services. In the past, this was a time-consuming and costly venture that required expensive consultants. Not anymore. ClearGov’s proprietary system ingests accounting data from local governments and automatically standardizes the chart of accounts so you’re always comparing apples to apples.

2. Add commentary: Sometimes a simple sentence or two can clarify a figure and reveal the rationale behind spending, funding, and debt. Charts are great for illustrating trends, but they can’t explain the factors driving the trends. That’s when strategically placed commentary can shed valuable light on important background data that would otherwise be missing.

3. Incorporate non-financial metrics: Other factors, like the impact of changing demographics, can provide valuable insight into why revenues are down or why public school attendance is up. Use them.

In the end, we think transparency (with context) makes everybody’s job easier — yours as a public servant and your constituents’ as informed citizens. Just to drive it home, we made this nifty fact sheet for you: 10 Ways Fiscal Transparency Makes Everybody’s Job Easier. Download, print, share, enjoy.