Three Tools for Good Citizenship

After accounting for all government revenues and expenditures, perhaps the greatest responsibility that I have as South Carolina’s Comptroller General is to ensure that our citizens, their government representatives, the media, and the financial markets have clear and easily understood information about our state’s financial activities and performance.

State government will spend more than $20 billion this year generated from taxes imposed on the citizens of South Carolina. Every dollar coming in and going out must be correctly accounted for. Voters must know how their elected representatives are spending their money, and legislators must have clear and reliable information about revenues, expenses, and trends so that they can make informed decisions. Since media representatives have the daily responsibility of reporting on the activities of government, they need information they can easily understand and incorporate into their reporting. And just as credit bureaus are continually determining the credit worthiness of each of us based on our history of paying our bills on time, financial markets are assessing the soundness of our state’s finances and credit worthiness each time state government seeks to borrow money.

The Comptroller General’s Office is responsible for ensuring that every department of state government correctly accounts for revenues and expenses, and we summarize and publicly report that information. National associations regularly evaluate how well we report this financial information to those who use it.

I am proud that South Carolina is annually awarded a Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association for our “Comprehensive Annual Financial Report” or CAFR. Our CAFR is an accountant’s dream, because it is a detailed report, numbering nearly 250 pages, loaded with highly technical information that accountants love to read and discuss. We complete and distribute this major report by Thanksgiving each year, much sooner than most states, for the fiscal year that ended the previous June 30. We not only receive commendations for the professionalism and thoroughness of our CAFR, but we are commended consistently for its timeliness because we produce and distribute it sooner than nearly any other state.

This past January we issued an entirely new report called a Popular Annual Financial Report or PAFR. We prepared this very readable and understandable 16 page report for the benefit of our citizens who are not accountants but who are interested in learning more about state government’s performance. Our PAFR reviews the state’s economy, focuses on key financial highlights, and looks at numerous programs and services like highways, prisons, state parks, education, and the state lottery. To date, only a few other states have produced similar reports, although many are now considering doing so. South Carolina is among the leaders in this pioneering effort.

The Association of Government Accountants (AGA), a respected national organization, is working to improve government accountability with better “citizen centric reporting,” that is, meaningful information about the financial condition and performance of government that can be easily understood by the average citizen. The AGA recently challenged our state to prepare a “citizen centric” annual report that would be even more streamlined and understandable than our new 16 page Popular Annual Financial Report.

South Carolina soon will be one of the first states in the nation to provide “A Report to Our Citizens” based on the AGA’s helpful guidelines. Our newest and most readable report is prepared as a four page pamphlet, and it provides citizens with simple charts and statistics on changes in our population, employment, per capita income, public school enrollment, number of state government employees, revenues and expenses, major developments in state government finances, and future challenges.

All three of these reports, ranging from very detailed to very summarized, will be available on our website at www.cg.sc.gov. I ask South Carolinians to email or call me with any questions or suggestions about these reports or any other aspect of the state’s finances.

It is important that we all take greater responsibility for what government does, to hold our elected representatives accountable for spending our money, and to remember that ultimately government is of, by, and for “we the people.” I’m committed to making government more and more transparent and accountable, and I believe these three important reports about state finances will be essential annual tools for good citizenship and conscientious voting. As the great World War II General Omar Bradley once reflected, “If you will help run our government in the American way, then there will never be danger of our government running America in the wrong way.”

Cost of Posting State Agencies' Spending Online Overstated

(The following was published in the Commentary section of The Post and Courier on April 3, 2008)

By Richard Eckstrom

State government spending has grown tremendously over the last several years, and the public realizes that personal income levels have not grown anywhere near as fast as government spending. For example, spending by state government jumped twelve percent last year, yet the average South Carolina family’s income rose by just four percent. Clearly, government spending is out of touch with the economic realities faced by ordinary citizens.

Taxpayers deserve to know where that money is going. The General Assembly is now considering legislation that would require state agencies and local governments to post their check registers and credit card statements online. This proposed legislation, if enacted, would make it easy for citizens to see for themselves exactly where their tax money goes. In turn, this could expose wasteful spending and remind state agencies and employees that they ultimately answer to the people they serve. This is exactly the kind of common sense, good government proposal that no one should oppose. Many may not realize that the Comptroller General’s office has already implemented a similar system – at no cost to state agencies – that makes expenditure information for most state agencies available via an easily accessible website.

Agency compliance with any additional online data posting required by the proposed legislation could be implemented in most cases without costing the taxpayers a dime. Yet a recently released “fiscal impact statement” obtained by the General Assembly dramatically overstates the cost of implementing this proposal. Misinformed or biased “number crunching” only confuses lawmakers and gives governments an excuse not to make their spending available to the public.

According to initial cost estimates for implementing this proposed legislation, the state would need as much as $5 million to fully implement an online check register and credit card database. These estimates, provided by a few assorted state agencies, are simply not credible to me. In fact, I already provide spending information on more than 70 state agencies via a website at absolutely no additional cost to taxpayers. The proposed legislation would simply require local governments and the remainder of state government to follow suit.

I am told that some officials are already using the dramatically inflated cost estimates as political cover. They are arguing that it is a waste of taxpayer money to inform taxpayers how their money is spent.

Most state agencies are already in compliance with the proposed law, whether or not they realize it. The majority of state agencies already report their finances to my office for me to process their check payments and in turn I summarize and electronically post their spending information on the state website. The entire program costs taxpayers nothing.

State agencies exempted from reporting to my office now maintain their own similar financial databases that they could make available, if they wanted to, via the Internet at virtually no additional cost, simply by using the same type search engine that we are already using.

Otherwise, school districts and county and municipal governments would be able to comply with the proposed law simply by scanning their check registers and credit card statements onto a computer and posting their scanned files to their agency’s website. Keep it simple. Require each governmental entity to decide the easiest and least expensive route to comply with the proposed legislation.

But rather than taking this common-sense approach, some are lamenting that a vast network of new computers, databases and new employees will be necessary to manage an imaginary new bureaucracy. It is the usual ploy. If the costs to implement can be inflated, they think that maybe they can make go away these efforts at implementing more and better government transparency. But let’s be clear – their inflated cost estimates, which are awfully flimsy, are the only thing shielding lawmakers from the justifiable anger of the voters if this proposed legislation fails.

This typical big-government mind-set, that an entirely new bureaucracy is required to reinvent the wheel, is bogus. The real facts are clear. The majority of government agencies essentially already comply with the proposed bill. Those that don’t comply have a no-cost, or very low-cost, example to follow. Complying is simply a matter of being willing to make it happen.

The technology exists today. The infrastructure exists today. My office will assist any state agency with the transition to transparency. State lawmakers should welcome the chance to shine the sun on state spending and to invite the public into the vaults of government data. It should not cost them a thing to do so. And if they do not, the public would be justified in asking what it is their elected officials don’t want taxpayers to see.

Richard Eckstrom, a former Certified Public Accountant from Greenville, is the Comptroller General of South Carolina and one of the five members of the State Budget and Control Board. He served one term as State Treasurer and was re-elected in 2006 as Comptroller General.