Tech Brings Budgets to Light, but Do People Understand Them?

Online financial transparency tools have become increasingly common for local governments. They make budgets and other data more accessible, but some are skeptical that making them easier to find makes them useful.

by Michaelle Bond, Philly.com / March 11, 2019

(TNS) — A decade ago, Radnor Township, Pa.’s manager gave himself nearly $130,000 in unauthorized bonuses — right under the noses of township commissioners.

After that, officials vowed to be more transparent about how they ran the government.

With that goal in mind, the Main Line township has rolled out its “Open Finance” website, an interactive tool that lets the public — residents, investors, business owners — and government employees explore the township’s budget through charts and graphs. As of late last month, users could look at broad data or drill deep into certain funds to the point of seeing individual check amounts to vendors.

Lisa Borowski, president of the township’s Board of Commissioners, said transparency helps officials govern and engage the community.

“Residents need to know how their money is being spent and where it’s being spent and have a say," she said.

Nearly all governments share budget information online, but the extent to which they share varies. They increasingly are moving beyond uploading static PDF versions of financial statements and lists of revenues and expenses.

There’s a growing appetite among local governments to be more transparent, especially about finances, as citizens demand that information be more readily available, said Mark Mack, a manager at the research and consulting center of the Government Finance Officers Association. Strides in technology have enabled smaller governments to offer the same types of online tools some of their larger counterparts started using years ago, he said.

“This is something that’s definitely on the rise," Mack said. “A lot of governments are wrestling with how to do it and do it right.”

Some are wary of posting too much detail online and risking the security of that information, he said. And most residents don’t regularly check their governments’ websites and don’t have backgrounds in finance, so officials need to address these challenges. The association is developing best practices around online budget tools.

Interactive websites are used by Philadelphia; Montgomery County; Chester County; Pittsburgh; the state of Delaware, and other governments around the country to share financial data with the public. They can customize the tools to fit their needs and level of information they choose to share.

Each week, Radnor’s financial system automatically sends data to the Socrata Open Finance platform — which, like the financial system, is made by the public-sector-software company Tyler Technologies. The township pays a $12,000 annual subscription fee.

But do people know what they’re looking at?

Christopher Berry, faculty director at the Center for Municipal Finance at the University of Chicago, said he is skeptical about how useful these budget tools are for average people who don’t understand the ins and outs of municipal budgets, “which virtually nobody does.”

“I think you’ve got a lot of work to do to even get the average person to want to come to the website in the first place,” he said.

Berry said he hasn’t seen great models for making financial information accessible to the typical citizen. At a basic level, people want to know whether their government is doing a good job and the value of their tax dollars, he said. That’s not something they can get from looking at straight numbers — no matter how prettily governments display them — without context and comparison.

“This buzzword of transparency gets hold of people and they think it means just dump everything on the web,” he said.

Radnor officials hope eventually to add more explanation behind the numbers, said William White, Radnor’s assistant township manager and finance director.

Chester and Montgomery Counties have used the OpenGov platform for their interactive budget tools since 2015. The counties include information that residents have continued to request through the years about the counties’ finances, such as the amount of money spent on employee wages and benefits, annual tax revenue and county staffing levels.

Simone Brody, executive director of What Works Cities — a four-year-old Michael Bloomberg-funded, data-driven philanthropic program — said governments should use online tools as part of a larger plan that includes meeting people where they are and creating bite-sized ways for residents to engage with financial data, which is what Los Angeles does.

Brody said she doesn’t think most governments are using online tools to their full potential.

“It’s not enough to just put information out there," she said. "You really need an engagement strategy.”

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