May 18, 2008

RALEIGH – Seven state agencies earn failing grades, when it comes to making budget and spending information available online. Twenty of 22 agencies studied earned no better than a D-plus grade, according to a new John Locke Foundation Spotlight report.

The report assigns F’s to the departments of Commerce, Correction, Environment and Natural Resources, Insurance, Justice, Transportation, and the State Treasurer. The only state agencies to escape a D or F grade were the Clean Water Management Trust Fund, with a C, and the Department of Public Instruction, C-minus.

Those poor grades are not unique to state agencies. The JLF Transparency Report Card 2008 highlights transparency problems at all levels of North Carolina government, said report co-author Chad Adams, JLF Vice President for Development and director of the Center for Local Innovation. “The average grade for a state agency covered in this report is a D-minus,” he said. “No North Carolina city or school system in this report earns better than a C grade, and no county earns more than a C-minus.”

The report card is designed to spur improvement within state and local governments, Adams said. “This state, home to national banks that update their customers’ accounts instantly anywhere around the world, woefully lags in making spending transparent at every level,” he said. “North Carolina and its local governments need to do more.”

Adams and JLF Fiscal Policy Analyst Joseph Coletti evaluated the Web sites of 22 state agencies, North Carolina’s 10 largest cities, 10 largest counties, and 10 highest-spending school districts. Each earned a letter grade from A to F based on the “degree of difficulty” presented to citizens hoping to find line-item budgets, annual financial reports, and information about government contracts, grants to non-profit groups, and personnel data.

As a group, the cities earned the highest marks with an overall grade of C-minus. Counties earned an average D-plus grade; local school districts, D; and state agencies, D-minus.

The report noted some bright spots. The Department of Public Instruction, Community College system, and University of North Carolina system all earned B grades for presenting school enrollment and graduation rate information. The Clean Water Management Trust Fund earned a B for documenting its grants to nonprofits. The clean water fund, departments of Labor and Revenue, and the Office of State Budget and Management all earned B’s for presenting detailed budget information.

But 10 agencies earned more F’s than passing grades. The departments of Justice and Transportation earned F grades in every category.

“Taxpayers and voters should react to these grades the same way parents would react to bad grades on their child’s report card,” Adams said. “We can’t take away their iPods, but we can call on state agencies to clean up this mess and improve their transparency. It shouldn’t be a demand; it’s an obligation.”

State and local government agencies still have a long way to go with respect to meeting public expectations for transparency, Coletti said. “In the second decade of the digital age, our state is still in its infancy with respect to this issue,” he said. “Having been dominated by scandal in recent years it is absolutely critical that members of the public have greater access to the programs and line items that they are funding.”

The new Spotlight report marks the first phase of a “major initiative to urge state and local officials to develop transparency Web sites,” Adams said. “After cataloguing what’s available now from government agencies, we’ll create our own Web portal at so the public can access current information easily,” he said. “Then we will urge North Carolina to create a comprehensive online reporting system.”

Easily accessible information is critical to modern government, Adams said. “The lack of available financial information provides citizens very little reason to trust that their money is being used wisely or, in some cases, legally,” he said. “It is incumbent upon North Carolina state and local government officials to make transparency a top issue. In so doing, they will reduce the possibility for corruption, improve public accountability, and increase the ability to measure success.”

Chad Adams and Joseph Coletti’s Spotlight report, “Fiscal Transparency in N.C: Surveying state and local governments,” is available at the JLF Web site. For more information, please contact Adams at (919) 828-3876 or [email protected] or contact Coletti at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].