Most states have websites where their state checkbook, budget, etc is posted online. Alabama’s version of that site is called Open Alabama. The problem is that Open Alabama isn’t all that open. Like the state’s online legislative information system, it is incredibly difficult for the average person to navigate and use. Most people without a degree in accounting aren’t going to be able to read and understand the data.
In an effort to address this problem and thus increase transparency regarding state spending, Rep. Paul DeMarco has introduced H.B. 25 the Fiscal Transparency Act. The press release below gives a good overview of what H.B. 25 does and why.
STATE REPRESENTATIVE PAUL DEMARCO
FOR IMMEDIATE RELEASE: MONDAY, MARCH 7, 2011
Rep. DeMarco Introduces Fiscal Transparency Act to Mandate Better Reporting of State’s Finances
BIRMINGHAM – State Representative Paul DeMarco today announced the introduction of the Alabama Fiscal Transparency Act, a bill that will require more accurate and timely reporting of the state’s fiscal situation by the state Finance Department.
Currently, reporting of the state’s finances lacks proper transparency, Representative DeMarco said.
“State Agencies, local school systems and the general public have no official source of information to monitor budget conditions and provide early warning whenever proration becomes likely,” Representative DeMarco said. “In other states, official monthly financial reports exist to meet this need. It’s time our state Finance Department provide transparent monthly reporting of budget conditions within state government.”
At the start of the annual budget process, the Finance Department and the Legislative Fiscal Office each estimate the revenues available for expenditure from the General Fund and the Education Trust Fund. These forecasts are used to developing the final budgets, which are required by law to be balanced. However, these estimates are not updated periodically thereafter to track whether actual revenues, and those expected, are sufficient to finance all of the appropriations enacted for the year.
House Bill 25 remedies this shortcoming by requiring the State Finance Department to produce monthly financial reports for the General Fund and the Education Trust Fund, and to publish them in a prominent place on the department’s website. This increased transparency will allow government agencies and the public to monitor the condition of the state’s budgets, making it easier to prepare for budget cuts, should they become necessary.
While this proposed legislation amounts to advanced accountability, it will not be expensive to administer, Representative DeMarco said.
“Appropriations are already monitored to maintain control over expenditure authorizations, and expenditures are monitored as they are made,” he said. “A number of these detailed reports already are posted monthly, but there is no straightforward report that brings the complicated details together to focus on the overall condition of the General Fund and Education Trust Fund. The Alabama Fiscal Transparency Act will cure this oversight by requiring such reports every month.”
The bill is scheduled to be before the House State Government Committee on Wednesday at 3:00 p.m. in Room 601 of the Alabama State House.