(The Center Square) – New York tied for the top spot in a recent independent analysis that looked at each of the 50 states’ efficacy in reporting financial data. It earned perfect scores for seamless independent auditing processes and reporting retirement liabilities on its balance sheet.
Truth in Accounting, a Chicago-based nonprofit focused on government spending, on Nov. 17 released its 2020 report on states’ financial transparency scores.
The organization combed through states’ comprehensive annual financial reports, or CAFRs, and prescribed scores in eight metrics that touched on accessibility, timeliness and minimizing use of confusing jargon.
In September, Truth in Accounting dinged New York with a low score for its overall fiscal health. According to the organization, New York lumbered over a $118.2 billion shortfall before the onset of COVID-19.
Sheila Weinberg, CEO and founder of Truth in Accounting, said states’ financial conditions and reporting of information are not inherently synonymous with one another.
“Despite New York’s poor financial condition, the state tied with Utah for the first place in our transparency score,” Weinberg said in an email interview with The Center Square.
While New York received 89 out of a possible 100 points, Weinberg said the state has areas to improve. She singled out challenges in accessing specific pieces of information and the reporting of some funds within the broader ledger.
“The state could improve its transparency even more if it expanded its use of bookmarks in the electronic (PDF) version of its financial report and reduced the use of confusing deferred outflows and inflows.”
Other areas where the state had points taken off from its overall score included the timeliness of publishing fiscal year-end data. In the metric of publishing information within 100 days of closing the books, New York received eight out of 10 points.
But New York earned a perfect score in the most heavily weighted metric in Truth in Accounting’s analysis. Noting the state received from independent auditors a “clean opinion” – a phrase meaning no red flags were raised – New York received 50 out of 50 points.
Weinberg and others within Truth in Accounting said a goal of the organization’s annual transparency reports is to shine a light on the broader reporting of financial data.
“While there is a great deal of focus on state budgets, the results of those budgets are found in a government’s CAFR,” a statement within the report reads. “The criteria used to develop our transparency score provide a ‘best practices’ framework for government officials and citizens that can be used to improve their government’s transparency and accountability.”
The average score in this year’s report was 79 out of 100 points. In general, states were docked points for the time it took to report data and using outdated pension information.
Connecticut notched the least transparent score in this year’s Truth in Accounting analysis, receiving a score of 49 points.