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A new report, “Following the Money 2017: Governing in Shadows” released by Connecticut Public Interest Research Group Education Fund found that special districts, like Hartford County Metropolitan District, are nationally failing to meet modern standards of spending transparency. The report looked at 79 special districts and graded them based on the accessibility of checkbook level spending data, budget information, and audited financial statements.
Hartford County Metropolitan District earned a “C-“, following the national trend but well ahead of many failing districts across the country.
Special districts are government entities established by a citizen vote or other legislation. They provide a specific service or set of related services for a designated area that would otherwise typically be provided by a government entity. Such districts are defined by their ability to exercise significant fiscal autonomy, including drafting their own budgets separate from the state or local government’s legislative review process.
“Special districts like Hartford County Metropolitan District play an important role in public life, providing valuable services,” said Kate Cohen, State Director with ConnPIRG. “However, they’ve often fallen off the map when it comes to transparency because of how these districts are structured. That makes it all the more vital that districts themselves and the states in which they operate are proactive in ensuring the work they do is transparent to the public.”
Here in Connecticut, there are over 447 special districts. In 2013, the last year for which data was available, those special districts managed over well over $1,419,612,000. These numbers are conservative because only a fraction of special districts in each state actually report to the U.S. Census.
“Government budgets are the most direct reflections of its commitments to the people they serve,” Comptroller Kevin Lembo said. “Public dollars belong to the people, and so the people deserve to know how every dollar is spent – whether at the local, state or federal level. The state’s checkbook is now online for everyone to view in real time, and that should be a statewide goal for all towns, cities and special districts that manage public dollars. My office will continue to work closely with towns, cities and quasi-public agencies to replicate the state’s transparency initiative statewide.”
Nationally, special district spending transparency is lagging. Of the 79 special districts reviewed, only seven special districts had a detailed spending checkbooks available online. These checkbooks allow citizens to see how their tax money is spent, dollar by dollar. The districts that performed best in this study were based in states like Texas and Illinois, which have taken action to pass legislation or enforce financial accountability standards for either all levels of government or certain districts.
"Across a diverse array of budget sizes, function types and geographic service areas, what most of these special districts have in common is their lack of financial transparency," says Rachel Cross of Frontier Group, co-author of the report. "And because special districts are the fastest growing form of local government in the country, what we don't know about them is also growing every day."
In Connecticut, the Hartford County Metropolitan District received a C - , with an overall score of 47. The district provides a procurements portal with past awarded contracts information, including contractor, payment amount and a brief description of service provided, earning the district partial points for check-book-level spending. The district earned 12 points in the category “checkbook-level expenditures”, 19 points under the category “budget”, and 16 points in “financial reporting”.
Quasi-public and semi-independent government bodies, like special districts, tend to lag behind the transparency standards that state governments are beginning to achieve. Last year, the Connecticut government earned an A+ for their spending transparency portal. Connecticut has a well-built and comprehensive site for its own spending data. The state should encourage special districts to incorporate their data in the central transparency portal.
The report offers a series of recommendations to ensure that special districts aren’t left behind as state and city governments move towards greater transparency.
● Connecticut should establish clear and uniform financial reporting guidelines for all special districts.
● Connecticut has already started a portal that details quasi-public agencies in the state, but should expand that to include more data on those and special districts
● States should open their transparency portals to local governments. Some states have already begun to do this, allowing local government bodies to upload spending data to a pre-built website.
● Special districts should prioritize establishing an online checkbook database of their spending. This could be as simple as an excel document, or could be as complex as uploading data to a state database. However, it is checkbook level spending information that most informs how special districts operate, and can most efficiently decrease costs and waste and increase public confidence and engagement.
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