SGF Networking Event Recap – Financial Transparency

On December 7, 2021, the Networking Events subcommittee of the SGF hosted an event focused on the discussion of Financial Transparency in Small Governments. The event focused on informal discussions regarding what their organizations do to increase or handle financial transparency within their entities. The discussion was led by Jeff Hansen, finance director for the City of Golden, Colorado, as a follow-up to an article he wrote for the SGF's Newsletter in 2021. Tom Raguz, deputy city administrator and Finance Director for Brooklyn, Ohio, and Kevin Greenville, Treasurer for Laplata, Maryland, also led breakout sessions.

Approximately thirty people joined in the discussion from various government entities. While the main focus was financial transparency, the underlying theme was numbers without context can be dangerous, and it is important to know your audience. Many of the individuals that participated in the discussion stated that while they put monthly, quarterly, and annual financial reports on their website for public viewing, many hadn't engaged in the process of working with a formal platform that would allow for real-time transactions to be posted for review. Many stated concerns that this type of information could lead to bigger issues and more confusion regarding transparency rather than being helpful. It also led to another topic of knowing your audience.

Knowing Your Audience

In small governments, elected officials often tend to change policies and practices because one or two individuals or small groups make a lot of noise about something. Often, rather than drilling down to see the true benefit of changing something - in this case, making entities more transparent - this isn't what the larger group of constituents are interested in. Small governments face this issue in many instances, whether it is financial transparency, a code change, or a resolution. Knowing the audience in which we serve is just as important as transparency.

Balancing Transparency, Privacy, and Community

Other topics of discussion during the event included how much is too much in terms of financial information. Some financial information on payroll, such as garnishments, is confidential. So by putting live time information out for public view, entities have to be careful to ensure that confidential data is redacted before going live.

The next topic led from this regarding the cost-benefit of this type of information. For those entities that participated in live time posting, one entity stated that only five individuals accessed this information in a city of approximately 21,000.

• So are the resources spent to create this data for one or two individuals a good use of taxpayer dollars when it takes special software and multiple staff hours to redact information?
• Is it a benefit?
• Is this type of implementation civic engagement, or was it implemented because one or two individuals voiced very loudly a concern to be more financially transparent without looking at the true cost-benefit of implementation? 

Financial transparency takes on a lot of different aspects and doesn't just center on making a financial report available for review. Each government entity has to weigh what type of information is most beneficial to publish for the public and how the public will interpret the information provided. Knowing and understanding the needs of a community regarding financial transparency, along with the cost-benefit of providing specific levels of transparency, are factors that must be considered when implementing financial transparency in any entity. 

The next SGF Networking events are scheduled for April 8 and July 22.