Ohio House Pushing for Transparency in Financial Reporting on House Bills 321-324

Ohio House of Representatives Duffey and Hagan are sponsoring Bills 321 - 324 with the goal of Transparency and Accountability in Governmental Financial Reporting.

Along with the bill co-sponsors Representatives Amstutz, Blair, Henne, Landis, Roegner, Schuring, Sears, Stinziano, Terhar, Bishoff they are garnering support for their bills.  As a 'Citizen Auditor' have submitted the following proponent support letter.

As a retired Finance Director (other positions included Assistant Finance Director, Payroll/Income Tax/Utility Billing Administrator, and Zoning Clerk/Inspector) of multiple local municipal and township government(s) in Ohio and Michigan for 22 years and over 13 years in marketing/consulting/implementation of computerized financial accounting, payroll, utility billing, and income tax management computerized software systems in Ohio, Indiana, Kentucky, and Michigan; I hereby submit for your consideration the following thoughts and ideas pertaining to HB’s 321 – 324.  The following statements are based upon my actual working experience(s) pertaining to the concept(s) of ‘transparency’ in providing fund accounting/budgetary financial reports and other public records in an electronic format on the internet:

A.    The following quotes from our forefathers are appropriate to the bills under consideration:

 1.     Thomas Jefferson: “Information is the currency of democracy”.

 2.     Patrick Henry: “The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them . . . To cover with the veil of secrecy the common routine of business, is an abomination in the eyes of every intelligent man.”

 3.     James Madison: “A popular government without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy, or perhaps both.  Knowledge will forever govern ignorance, and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”

 B.    There are a few local government units that make an effort to provide both public records (minutes, agendas, public hearing, etc) and basic financial/budgetary report(s) on-line which deserve the title of pioneers in openness and transparency.  Unfortunately the majority, I am sorry to say, are providing either a poor or nonexistent attempt in presenting basic financial/budgetary reporting and/or public records on-line.  The most often used excuse heard is ‘there is no requirement (or Law) to provide this information on-line”, therefore, most local government units simply make no effort to do so!  Thanks to the foresight and determination of the bill sponsors and co-sponsors, Ohio legislators have a tremendous opportunity to provide legislation requiring a uniform standard format for providing on-line accessibility with the goal being ‘transparency’ for accessing public records and uniform accounting rules resulting in comparable financial reports and databases for performance evaluation and comparative financial analysis by the public.  We the people in law and fact are the owners of these public records and HB’s 321-324 represent a new beginning in the realization of ‘transparency’ of public records and I applaud and support this effort.

 C.    The HB’s under consideration provide the mechanism for local government units to prepare, transmit, and release standardized financial reports like the Annual Tax Budget, Annual Operating and Capital Budgets (someday these reports should be done on a five year basis like our School Districts), Monthly and/or Quarterly revenue and expenditure financial reports, wages/salary reports, vendor/accounts payable reports, check registers, as well as public records like adopted resolutions/ordinances, codified ordinances, and other public documents like public meeting agendas/minutes/hearing calendars.  These bills further provide grant funding so that local government units will not have an unfunded mandate but a financial incentive to move into the modern electronic data exchange world of the internet. 

 D.    This legislation will further the need for ‘record retention schedules’ to be implemented and maintained on an on-going basis.  Placement of public records and financial/budgetary reports on-line will aid local government units in not having employees spend countless hours maintaining public record logs and countless employee hours in finding and disbursing public records requests.  Tax dollars saved can be allocated to providing for the public health, safety, and welfare and productive time returned to administrative staff for other duties.

 E.    The need for a uniform chart of accounts structure within local government units of government is in line with many neighboring States (Michigan and Indiana) who have both provided uniformity for comparable presentation of budgets, accounting, and other financial reporting.  The advantages are many and a few of thoughts follow:

 1.     Reduction in audit time thereby cost savings.  Since auditors and finance/treasury personnel with become familiar with an expected account structure as opposed to learning multiple account coding structures;

 2.     Smoother transitions for new finance/treasury administrators and personnel due to retirement(s) or turnover(s) that take place in the financial department(s);

 3.     A statewide policy/procedure manual can be prepared which is often cost prohibitive for many local government agencies or unobtainable with in-house staffing.  Auditing efficiency and additional cost savings would be positively impacted along with improvements in standardized training and maintaining of a consistent and accurate chart of accounts to allow uniform financial/budgetary reporting;

 4.     The public and performance management database managers will have simplified analytical and comparable databases from which to perform financial analysis trending and averaging among local government units.  There should be innumerable benefits to the databases for performance auditing and reporting that can only benefit Ohio taxpayers and the public ‘army of citizen auditors’ which State Treasurer, Josh Mandel has spoken often of and in which I am a proud enlistee proven by the investment of my time and talents for the benefit of the public and taxpayers whom are often referred to as the ‘forgotten man’ by many.

If there are any questions or comments, please visit http://www.citizenauditorohio.com , the 'Citizen Auditors of Ohio' website and visit the 'Contact Us' tab.

I encourage all my fellow citizens to support House Bills 321-324 and contact Representatives Duffey, Hagan, and Roegner.

Citizen Auditors of Ohio

Loren Sengstock, Citizen Auditor

2704 Arbor Glen Drive, Suite 105

Twinsburg, OH 44087

Phone: 330-888-9459