Ohio received a mediocre grade for its financial transparency, with several areas for improvement, according to a new analysis.
Truth in Accounting gave Ohio a total transparency score of 75 (C).
The organization based its grades on eight criteria – what it calls “transparency indicators.” These indicators include whether states received a clean opinion from an independent auditor and whether they report all retirement liabilities on its balance sheet.
The organization gave Ohio a mark of one out of five for both accessibility – how easy it is for the general public to find the state’s financial report – and navigation – how easy it is for readers to navigate the document.
The organization also dinged Ohio for using pension liability data that is six months out-of-date. The state’s fiscal year ends on June 30, but the pension plan’s fiscal year ends on Dec. 31, Sheila Weinberg, founder and CEO of Truth in Accounting, said.
“Once we won the battle of getting the pension liability on the face of the balance sheets, the governments said … it might take the actuaries a long time to get us the number of the net pension liability, and we don’t want to delay our financial report, so we’ll go ahead and use the prior year’s number,” Weinberg said.
“The governments had a one-time selection. Do you want to use the current year numbers, or do you want to use the prior year numbers?” Weinberg added. “All of the states chose to use the prior year numbers. Our point would be, ‘excuse us, that’s the largest liability that you have. Would you not want that to be accurate even if you have to delay your financial report?’”
Idaho, North Dakota and Nevada topped the organization’s list, each racking up a score of 88, the report found. Vermont, North Carolina and Connecticut rounded out the bottom with scores of 58, 56 and 50, respectively.
Despite some room for improvement, the organization believes states overall are generally moving in the right direction when it comes to transparency.
“We definitely believe that they’re going in the right direction,” Weinberg said. “We’re thrilled to finally have the governments stop doing Enron-type of accounting, where they used to be hiding their pension and retiree healthcare liabilities off their balance sheets, and we’re thrilled to finally have those being reported by the governments.”
Separately, Truth in Accounting gave Ohio a grade of D for its finances. The state has $50.4 billion available to pay $77 billion worth of bills, the organization found.