As we promised, we’re continuing to explore local financial data and what could be done to make it more open.
We’ve already documented how this information is often locked in PDFs, making it difficult to access and use. What can be done about it? There are tens of thousands of municipalities in the country, after all. It would be a huge undertaking to ask each municipality to share their financial information online in open formats. We know that municipal data is often shared with other levels of government, though, even going up to the federal level sometimes. We wondered whether there might be a federal agency that could serve as a lever to help open municipal financial data.
The Municipal Securities Rulemaking Board (MSRB), for example, gathers information related to municipal bonds, including some financial information. We’ve supported better disclosure and opening up specific datasets held by MSRB in the past, and MSRB responded favorably.
MSRB is taking steps forward in improving access to the information it holds by making it freely available online through the Electronic Municipal Market Access (EMMA) system. While not perfect, this system makes information more easily accessible by making it searchable and, for some information, displaying it in machine-readable formats.
This history is worth noting because MSRB also serves as a federal repository for things like comprehensive annual financial reports (CAFRs). As an aspect of their work regulating municipal securities, the MSRB requires bond-issuing municipalities to provide ongoing information about their finances. This information is called “continuing disclosure.” One of the ways that municipalities can satisfy the continuing disclosure requirement is by filing a copy of their CAFRs, audited accounts of their financial flows over the course of a year. The reports are more accurate than budgets, which are just spending plans rather than accounts of what actually happened.
Any municipality that issues bonds can upload documents, including CAFRs, to the MSRB website for disclosure. That’s a step toward online disclosure of municipal financial information, but there are still challenges to overcome, namely around completeness and openness.
The detailed financial reports are uploaded to the MSRB website in PDF. That’s partly because there is context narrative included in the reports, and PDF is one way to share such information. These reports can also run for hundreds of pages, however, making it difficult to quickly find relevant information. MSRB appears to have given thought to the need for making the numeric information more easily accessible. Full reports are in PDF, but MSRB also shares some information in tables. This information is specifically about bonds, though. It doesn’t capture anything close to all of the financial information that the PDF report does.
For maximized access and reuse of the important local financial information shared on the website, this data should be shared in structured, machine-readable formats in addition to the narrative PDFs. For maximally beneficial reuse, data should also be made available for bulk download, since the existing search function only allows for a narrowly tailored search. There are already examples of the benefits of making municipal financial information available in easily processable and reusable formats. Is it possible that a federal agency could play a role in opening up this information? What if an agency like MSRB could make annual financial reports available in something more usable than PDF? It’s an interesting question to ponder, and it’s one worth seeking answers to if it can help empower greater local financial transparency and accountability.
We’re continuing to explore the possibilities. We hope to have more updates soon.