Municipalities of all sizes share a common goal when it comes to making financial data transparent: just do it. Administrators know citizens and elected officials alike want to see for themselves how tax dollars were spent and how city programs are funded. It’s a great way to demonstrate financial integrity and build trust.

Transparency is often implemented by opening up the books and making them available for anyone to see. But simply posting financial reports on a website can lead to confusion and misunderstandings.

It’s time to redefine what transparency means and help stakeholders better understand how municipalities manage their budgets.

That’s not what that means

For example, let’s say as part of its transparency efforts, Anytown posts its general ledger on the city website. Joe Citizen reviews the public works budget and notices that the line item for road salt increased 50% from the previous fiscal year. He finds that curious and worries that the city isn’t getting the best bid from its vendor. 

Without additional information to put the higher expense into context, Joe Citizen doesn't have the complete picture to understand why road salt costs are significantly more than the previous year.

Instead of just posting the raw data, the city has an opportunity to visually tell its citizens the full story. Instead of comparing line items with no context, Anytown can present a multi-year view of road salt expenditures and quickly communicate key variable such as reduced usage during a mild winter as well as the need for more salt in the current budget because the city is now responsible for 11 additional street miles from a recent annexation.

By redefining what transparency means - adding context to data – we can infuse meaning into the information we share with stakeholders. Fortunately, it’s not hard to do.

Read The Municipality's Guide in Mastering a Financial Projection

Tell the right story

Currently, most municipalities’ financial data is housed in an accounting system or a series of spreadsheets. Administrators don’t have an easy way to build narratives that illustrate the impact of changes in one line item on another. So, they end up simply showing transactions, which are open to interpretation.

The easy fix is to add analytic capabilities to municipalities’ toolboxes. With the ability to connect line items and inputs from other departments, suddenly administrators are able to craft messages around why they made certain decisions. Now, information can easily be shared in a visual format in way stakeholders can understand without a degree in accounting. Questions about the budget can be anticipated and administrators can proactively produce reports that tell a consistent story over time.

The best part is adding context to financial data enhances the value of information shared with stakeholder. That’s the true goal of transparency.

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Jody Smith is a Senior Account Advisor for the Municipality market with Forecast5 Analytics. Jody has been involved with local government for more than 38 years. He has served as Deputy City Manager and Director of Finance for the City of West Des Moines, served as a member of the ICAP Board of Directors, and is Chairman of Community Relations for West Des Moines Water Works. He received a Bachelors in Politico-Economic Systems and History from Buena Vista University and an Associates Degree in History from Iowa Lakes Community College.