Transparency and Accountability

Transparency in government is critical to a free society. In addition to providing services to the citizenry, governments should also allow citizens to understand how they pay for those services. As budgets have become increasingly complex, however, citizens are less able to monitor how their taxes are spent.

A Path To Corruption

Hiding the manner in which government operates is the simplest path to corruption. Abuses of power over the past decade with Department of Transportation funds, state grants to nonprofits, a state vision plan, money for Johnson and Wales University, and unresponsive public information officers have stemmed from the lack of transparency in state government.

Belated transparency helped expose problems with the Randy Parton Theatre in Roanoke Rapids, community support services designed for those with mental illness, and the governor's travel habits in Italy. One response has been that the state auditor's office now monitors nonprofits that receive state funding and conducts more investigative audits of state agencies.

The State Budget and State Agencies

The $21 billion state budget is often difficult for legislators to understand even in broad strokes; understanding the specific line items is still more of a challenge.

To understand total spending in any area, a legislator or citizen must first consult the certified budget from the Office of State Budget and Management (OSBM). Then he must find the final budget bill and committee report approved by the General Assembly, which together show additions and subtractions from continuing spending.

If it is the second year of the biennium, such as the fiscal year that started July 1, 2008, the interested person will also have to find the previous year's budget bill and committee report, the budget Highlights publication from the General Assembly's Fiscal Research Division, or the Post-Legislative Summary from OSBM. To find what has actually been spent, the intrepid citizen needs to contact the Office of the State Controller. If the citizen wants to understand better what is done with the money, he has to go back to the governor's budget proposal with results-based measures and extrapolate from the spending in fiscal 2006.

Many state agencies provide useful information for consumers of their services, as seen in the relative ease in finding school enrollment and graduation rates at education-related agencies' Web sites.

No agency, however, not even the Office of State Budget and Management (OSBM) or the Office of the State Controller, which monitor the entire budget, has a simple way to track revenues and expenditures online.

OSBM's recently updated site has the governor's recommended budget for the biennium as an Excel spreadsheet or a pdf. It also has the entire certified budget online, but in a format that is more difficult to access than a pdf would be. The Controller's Web site has monthly and annual financial reports available in pdf format.

In a review of state agencies and departments earlier this year, the John Locke Foundation found they generally had information available on senior staff and often had staff directories as well, but they lacked salary information.

More specific information on grants and contracts was nearly impossible to find in nearly every agency except the Department of Public Instruction/State Board of Education and the Department of Cultural Resources. Even with the governor's emphasis on results-based budgeting, most agencies provided no way to see this information.

Efforts In Other States

North Carolina took the first steps long before other states, but Kansas, Missouri, Texas, and South Carolina have set the bar for transparent government much higher. The federal government has also become more transparent both on its own and through outside Web sites that make federal spending easier to follow. Other states, from Louisiana to Alaska, Hawaii to Nebraska, are following suit.

These states provide online check registers, searchable databases, and user-friendly sites that allow citizens to follow their tax dollars. Already managers in government agencies have used the new tools to find efficiencies in their operations, and vendors have found areas where their products or services can help improve service for less money. States can also provide this information at little additional cost.

Oregon State University gives an example of an institution that has unilaterally opened its books. Its system, created in less than three months by a student for less than $10,000, has ten years of historical transactions with daily updates available. It is available to all students, faculty, and staff, though not yet to the general public. There is no reason the UNC system could not undertake a similar effort with even more beneficial results if applied across campuses, a step that would make direct comparisons possible.

The ability to compare across institutions within a state and across states is one of the network effects of transparency efforts. It is now difficult for a state employee or a citizen to compare activities across state lines. With transaction-level detail, however, it can become clear what states are getting for their money in a number of areas.

Recommendations

1. North Carolina should create a state transparency portal with transaction-level information with daily spending updates from the Office of the State Controller for all of state government, and daily revenue updates from the Department of Revenue.

2. Every state agency and department should make its check register available online and provide a link to the state transparency portal.

3. To make budgets more transparent, the legislature should enact a 72-hour "cooling off period" between the time a budget bill leaves the appropriations committee and when the first vote occurs.

4. To complete the transparency cycle, agencies should report and be accountable for program outcomes as they relate to program objectives.