transparency report

8/7/2019 transparency report

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Following the Money 2011How the 50 States Rate in Providing

Online Access to Government Spending Data

Following the Money 2011


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Following the Money 2011How the 50 States Rate in Providing

Online Access to Government Spending Data

Benjamin Davis,

Frontier GroupPhineas Baxandall and Jerey Musto,

U.S. PIRG Education Fund

March 2011


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The authors would like to thank the ollowing individuals or providing analysis, editorialassistance, and review or this report: Francisca Rojas, Post-Doctoral Research Fellow inthe Transparency Policy Project at Harvard Kennedy School; Philip Mattera, ResearchDirector o Good Jobs First; Jon Bartholomew, Democracy Advocate o OSPIRG; DeirdreCummings, Legislative Director o MASSPIRG; and Serena Unrein, Public Interest Ad-vocate o Arizona PIRG. Thanks also to Tony Dutzik and Rob Kerth at Frontier Groupand Carolyn Kramer or their editorial assistance.

This report is made possible through the generous support o the Ford Foundation.

The authors bear any responsibility or actual errors. The recommendations are those oU.S. PIRG Education Fund. The views expressed in this report are those o the authorsand do not necessarily reect the views o our unders or those who provided review.

Copyright 2011 U.S. PIRG Education Fund

With public debate around important issues oten dominated by special interests pursu-ing their own narrow agendas, U.S. PIRG Education Fund oers an independent voicethat works on behal o the public interest. U.S. PIRG Education Fund, a 501(c)(3) or-ganization, works to protect consumers and promote good government. We investigateproblems, crat solutions, educate the public, and oer Americans meaningul opportuni-ties or civic participation. For more inormation, please visit our website at www.uspirg.org/edund.

Frontier Group conducts research and policy analysis to support a cleaner, healthier andmore democratic society. Our mission is to inject accurate inormation and compellingideas into public policy debates at the local, state and ederal levels. For more inormationabout Frontier Group, please visit our website at www.rontiergroup.org.

Cover photo: Nikada PhotographyLayout: Harriet Eckstein Graphic Design

Acknowledgments


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Table o Contents

Executive Summary 1

Introduction 7

Transparency 2.0 Websites Empower Citizens toTrack Government Spending 9

States Continued Progress Toward Transparency 2.0 in 2010 15

Making the Grade: Scoring State-Level Progress Toward Transparency 2.0 23

Many States Have Improved their Websites BeyondBasic Transparency 2.0 Standards 29

State Ofcials Face Obstacles and Challenges inOperating Transparency Websites 36

Continuing the Momentum Toward Greater Transparency:Challenges and Recommendations 38

Appendix A: Transparency Scorecard 40

Appendix B: Methodology 42

Appendix C: Agencies or Departments Responsible orAdministering Transparency Websites by State 56

Notes 58


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Executive Summary

The ability to see how government usesthe public purse is undamental todemocracy. Transparency in govern-

ment spending checks corruption, bolsterspublic confdence, and promotes fscal re-sponsibility.

State governments across the countryhave been moving toward making theircheckbooks transparent by creating online

transparency portalsgovernment-oper-ated websites that allow visitors to see whoreceives state money and or what pur-poses. Forty states provide transparencywebsites that allow residents to access da-tabases o government expenditures withcheckbook-level detail.1 Most o thesewebsites are also searchable, making iteasier or residents to ollow the moneyand monitor government spending.

This report is U.S. PIRG Education

Funds second annual ranking o statesprogress toward Transparency 2.0anew standard o comprehensive, one-stop,one-click budget accountability and acces-sibility. (See Figure 1 and Table 1.) Thepast year has seen continued progress, with

new states providing online access to gov-ernment spending inormation and severalstates pioneering new tools to urther ex-pand citizens access to spending inorma-tion and engagement with government.

In 2010, at least 14 states either cre-ated new transparency websites or madesignifcant improvements to sites alreadylaunched.

Six statesArizona, Indiana, Massa-chusetts, Michigan, New Hampshire,and Wisconsincreated new transpar-ency portals in 2010. Highlights romthe new websites include:

o Arizonas new website allowsresidents to monitor most stateexpenditures. The website isaccessible both to researchers whoknow what they are looking or and

non-technical citizens who arevisiting the site or the frst time.

o Indianas new website is at theleading edge o Transparency 2.0,providing detailed inormation or

Executive Summary 1


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Figure 1: How the 50 States Rate in Providing Online Access to GovernmentSpending Data

residents to track many orms ogovernment spending, revenue andperormance.

o Massachusetts new website sets astrong standard or presenting taxexpenditures by displaying the costand description o each tax expendi-ture program.

Many states over the past year notablyimproved their transparency websites.

For example:

o New Jersey and South Dakotaupgraded their websites so theynow provide checkbook-level detail,allowing visitors to track the pay-ments made to specifc vendors.

o Louisiana made various improve-ments to its website over the pastyear, making it now among thenations best.

o Oregon embedded data viewingtools into its website that allowusers to search through fnancialdata, download their search results,and create maps and charts.

Forty states transparency websites

now provide checkbook-level inorma-tion on government spending.

Forty states allow residents to accesscheckbook-level inormation aboutgovernment expenditures online. (SeeFigure 1 and Table 1.) The majority o

2 Following the Money 2011


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Confrmation o Findings with State Ofcials

U.S. PIRG Education Fund researchers sent initial assessments to transparencywebsite ofcials in all states and received eedback rom such ofcials in 39 states

to ensure that the inormation in this report is accurate and up-to-date. Websiteofcials were given the opportunity to alert us to possible errors, clariy their on-line eatures, and discuss the challenges to achieving best practices. Their com-ments are discussed in the section entitled State Ofcials Face Obstacles andChallenges in Operating Transparency Websites.

Transparency 1.0

Incomplete: Residents have access to

only limited inormation about public

expenditures. Inormation about

contracts, subsidies, or tax expenditures

is not disclosed online and oten not

collected at all.

Scattered: Determined residents who

visit numerous agency websites or make

public record requests may be able to

gather inormation on governmentexpenditures, including contracts,

subsidies, and special tax breaks.

Tool for Informed Insiders: Researchers

who know what they are looking or

and already understand the structure o

government programs can dig through

reports or data buried beneath layers

o subcategories and jurisdictions.

Transparency 2.0

Comprehensive: A user-riendly Web

portal provides residents the ability

to search detailed inormation about

government contracts, spending,

subsidies, and tax expenditures or all

government entities.

One-Stop: Residents can search all

government expenditures on a single

website.

One-Click Searchable: Residents can

search data with a single query or browse

common-sense categories. Residents can

sort data on government spending by

recipient, amount, legislative district,

granting agency, purpose, or keyword.

Residents can also download data to

conduct detailed o-line analyses.

Transparency 2.0 Is Comprehensive, One-Stop,One-Click Budget Accountability and Accessibility

Executive Summary 3


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these states (37) also enable residentsto search or expenditures by vendorname or type o service purchased.

o Nine o these states are lead-ing states in the transparency

movement, hosting searchable,user-riendly websites that providecomprehensive inormation on arange o government expenditures.Most o these states provide de-tailed inormation on the grants andeconomic development incentivesawarded to companies and organiza-tions; all but one allow visitors tomonitor the unds orgone everyyear through tax expenditures; andmore than hal provide completecopies o contracts.

o Thirty-one states are emergingstates with transparency websitesthat provide less comprehensiveinormation or, in some cases, arenot easily searchable. Some o thesestates allow citizens to track trendsin state spending over time andmost o these states allow citizensto fnd out some details on specifc

state purchases rom particularvendors.

Ten other states are lagging states,whose online transparency eorts ailto meet the standards o Transparency2.0.

o Nine o these states have taken thepositive step o creating spendingtransparency websites, but thesesites lack many important Transpar-

ency 2.0 aspects, especially vendor-specifc inormation on governmentspending.

o One state does not host a govern-ment spending transparency websitethat is accessible to the public.

Red states and Blue states haveboth embraced spending transparency.The ranks o leading states are splitroughly equally between those thatvoted Democratic in the last presidentialelection and those that voted Republican.

In act, the average score o Obama-votingstates is almost exactly the same as that oMcCain-voting states.

Many states are improving theirwebsites beyond basic Transparency2.0 standards, empowering residentsto monitor government spending inunprecedented ways.

More powerul searches: Maryland andNew York have made tracking vendor-specifc payments easier or residentsso they can now easily search or thevendors location or the month thepayment was awarded, or easily distin-guish grants rom contracts.

More sources o data: Maryland, Ohio,and Virginia have posted new sets ofscal data to their sites, such as dataon state loans, bonded indebtedness,and registries o state property.

More ways to engage citizens: States suchas Utah and Texas have added toolsto their websites to increase citizeninvolvement, such as providing a glos-sary o terms (empowering users withthe knowledge to navigate complexfnancial terminology) and surveys onthe sites perormance.

All states, including leading states,have many opportunities to improve

their transparency websites.

Most transparency websites do notprovide detailed inormation on gov-ernment contracts. Even some o theleading websites provide only a shortdescription o the purpose o contracts.



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Table 1. How the 50 States Rate in Providing Online Access to GovernmentSpending Data

Only about hal o the websites allowusers to download datasets in ormatssuch as Excel, enabling more detailedo-line analysis o government spend-ing data.

Only 26 states include spending dataprior to Fiscal Year 2009.

Only 14 states provide links to theirtax expenditure reports.

Only 14 states provide any inorma-tion about local government spending.

Only our states provide the mostcomprehensive level o inormationon grants and economic development

incentives awarded to companies andorganizations.

STATE GRADE SCORE

Mississippi C 70

Utah C 70

Oklahoma C- 66

Rhode Island C- 66

South Dakota D+ 63

Caliornia D+ 62

Delaware D+ 61

New Mexico D+ 61

South Carolina D+ 61

Wisconsin D+ 61

Florida D 59

Vermont D 55

Wyoming D- 50

Tennessee D- 49

Alaska D- 47

Connecticut F 39

Iowa F 32

Arkansas F 28

West Virginia F 28

Washington F 22

Montana F 16

New Hampshire F 7

Idaho F 6

North Dakota F 6

Maine F 0

STATE GRADE SCORE

Kentucky A 96

Texas A 96

Indiana A- 93

Arizona A- 92

Louisiana A- 92

Massachusetts B+ 87

North Carolina B 85

Ohio B- 82

Oregon B- 82

New Jersey C+ 78

Pennsylvania C+ 78

Virginia C+ 77

Missouri C+ 76

Alabama C 74

Georgia C 74

Nevada C 74

Illinois C 73

Kansas C 73

Minnesota C 73

New York C 73

Hawaii C 72

Maryland C 71

Nebraska C 71

Colorado C 70

Michigan C 70

Executive Summary 5


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In the next year, state governmentsacross the country should strive toimprove government transparencyand accountability online. Leadingstates should advance the Transparency2.0 movement by continuing to develop

innovative unctions that elevatetransparency and citizen involvement.Emerging states should ollow the example

o the leading transparency states byimproving the search unctions on theirwebsites and increasing the amounto inormation available to the public.Lagging states need to join the rankso Transparency 2.0 governments by

establishing one-stop, one-click searchablewebsites that provide comprehensiveinormation on government expenditures.



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Across America, states ace excru-ciating choices orced by allingrevenue rom the economic down-

turn. From 2008 to 2010, state revenues

declined almost 12 percent ($78.5 billion).

2

In response, stateswhich are generallyrequired to pass balanced budgetshavebeen orced to make major cuts in spend-ing. According to the National GovernorsAssociation, states spent 6.8 percent lessin 2010 than in 2009.3 At the beginningo 2011, state budget crises show no signso abating. Caliornia, or example, ur-loughed most o the 230,000 employees inthe states executive branch, and still acesa budget gap exceeding $25 billion.4 To fx

this, Governor Jerry Brown plans to lay ofrefghters, reduce the pay o 63,000 stateemployees, and eventually cut jobs by 25percent in some state departments.5

As states are orced to make difcultbudgetary decisions in tough economic

times, it is even more important or thepublic to be able to understand how taxdollars are spent. Opening the govern-ments checkbook empowers citizens to

involve themselves in budgetary debatesand to act as watchdogs to ensure that thegovernment spends money airly andeiciently.

An overwhelming majority91 per-cento Americans believe state ofcialshave a responsibility to provide fnancialinormation to the public in a way that isunderstandable to average citizens.6 Thisis not some abstract desire. Polls indicatethat thirty percent o the public have tried

to search the Web or inormation abouthow their state government raises andspends taxpayer dollars.7

However, people oten lack adequateinormation on state expenditures. Ac-cording to the Association o Government

Introduction

Introduction 7


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Accountants 2010 report, 48 percent opeople are either not very satisfed ornot at all satisfed with the state govern-ment fnancial management inormationthey receive.8

For citizens in a growing number ostates, government spending transparencywebsites play a key role in closing this in-ormation gap. In 40 states, citizens haveaccess to checkbook-level data on govern-ment expenditures, with citizens in mosto those states able to access the inorma-tion through a searchable database. (SeeFigure 2.) These states have come to de-fne Transparency 2.0a new standardo comprehensive, one-stop, one-clickbudget accountability and accessibility.

In the past year, many states made prog-ress toward Transparency 2.0. Some stateshave launched completely new websites,and others have made improvements toexisting sites. These changesreviewedhere in our second annual report on state

government budget transparencyshowthat Transparency 2.0 is a growing move-ment that is picking up momentum acrossthe country.

With greater spending transparency,states can better ensure that taxpayerunds are spent wisely. This report pro-vides a benchmark o where each o the50 states stands in that process and howthey have improved over the course othe last year.

Figure 2: Example of a Checkbook-Level Website: North Carolina

Awards for Vendor Name Containing company

Vendor Award Amount

Award

Date Awarded Bid Summary

2010-113M Company $712,676.25 01/26/2011 Type 1 Sheeting & Inks

(Bid No. 201000215)

84 Lumber Company $27,653.00 07/15/2010 Treated Timber(Bid No. 201000943)



84 Lumber Company $16,367.00 08/13/2010 Treated Timber(Bid No. 54-TS-10897903-10898911)

84 Lumber Company, EightyFour, PA

$10,065.00 11/09/2010 Treated Timber(Bid No. 54-TS-10938695)

AGFA/Pitman Company $73,400.00 01/27/2011 Film Imager(Bid No. 55-011411)

ATLANTIC BEVERAGECOMPANY

$37,013.76 01/20/2011 Canned Pears(Bid No. 201002074)

Albemarle Fence Company,

Inc.

$26,036.00 02/03/2011 VEHICULAR GATE

(Bid No. 201100133)

Alfred Williams and Company $2,905,002.45 07/08/2010 Green Square Sustainable Office Furniture(Bid No. 200901515)

American Overseas BookCompany

$1,040.00 11/02/2010 Educational Material(Bid No. 42010654)



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Government spending transparencywebsites that meet the standard oTransparency 2.0 give citizens

and government ofcials the ability to

monitor many aspects o state spendingsaving money, preventing corruption, andencouraging the achievement o a wide va-riety o public policy goals.

Transparency 2.0 WebsitesGive Users Detailed

Inormation on GovernmentExpendituresWebsites that meet Transparency 2.0 stan-dards oer inormation on governmentexpenditures that is comprehensive, one-stop, and one-click.

ComprehensiveTransparency websites in the leading statesoer spending inormation that is bothbroad and detailed. In contrast to Trans-

parency 1.0 stateswhich may oer onlypartial inormation about governmentcontracts onlineleading Transparency2.0 states provide user-riendly searcheso a comprehensive range o current andhistorical government expenditures, in-cluding detailed inormation about gov-ernment contracts with private entities,subsidies, spending through the tax code,and transactions by quasi-public agencies.

Contracts with private companies:

Many government agencies spendwell over hal their budgets on out-side contractors.9 These contractorsare generally subject to ewer publicaccountability rules, such as sunshinelaws, civil service reporting require-ments, and reedom o inormation

Transparency 2.0 Websites EmpowerCitizens to Track Government Spending

Transparency 2.0 Websites Empower Citizens 9


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laws. To monitor spending on con-tractors, it is important that statesprovide comprehensive online trans-parency and accountability or allcontract spending.

Subsidies: State and local govern-ments allocate $50 billion in subsidieseach year, yet most governments stilldont disclose ull inormation aboutthese expenditures.10 Unmeasured,the perormance o these subsidiesremains unmanaged and unaccount-able. Subsidies take the orm o grants,economic development incentives,and other spending through the taxcode. Economic development incen-tives are subsidies given to companies,oten in the orm o tax credits, withthe intention to create jobs and spurgrowth. Subsidies through the taxcodeotherwise known as tax ex-pendituresappear in many orms,including special tax breaks, credits,and preerences. Tax expenditureshave the same bottom-line eect onstate budgets as direct state spend-ing, since they must be oset by cutsto other programs or by raising other

taxes. Once created, tax expendituresoten escape oversight because they donot appear as state budget line itemsand rarely require legislative approvalto renew. For these reasons, spendingthrough the tax code is in particularneed o disclosure. Leading states pro-vide transparency and accountabilityor tax expenditures, usually by link-ing their transparency portal to a taxexpenditure report, which is a detailedlist o the states tax credits, deductions

and exemptions. Leading states list thecompanies or organizations that re-ceive subsidies and explain what com-panies delivered or these subsidies.

Quasi-public agencies: In recentyears, quasi-public agencies have

been delivering a growing shareo public unctions.11 Quasi-publicagencies are independent governmentcorporations that are created throughenabling legislation to perorm a par-ticular service or a set o public unc-

tions. They operate on the ederal,state, and local levels, providing ser-vices such as waste management, tollroads, water treatment, communitydevelopment programs, and pensionmanagement. Quasi-public agencieshave extraordinary control over theirbudgets and do not rely solely, oroten even signifcantly, on an annualappropriation rom the legislature.Their expenditures thereore all out-side the ofcial state budget, so thepublic can only occasionally reviewtheir expenditures. A recent Massa-chusetts study, or instance, identifed42 such o-budget agencies in thestate with annual revenues equal toroughly a third o the entire ofcialstate budget. 12 Leading states shedlight on quasi-public agency expen-ditures by posting contracts enteredinto by quasis and giving detailedinormation on their spending.

One-StopTransparency websites in leading states o-er a single, central website where citizenscan search all government expenditures.With one-stop transparency, residents aswell as local and state ofcials in thesestates can access comprehensive inorma-tion on direct spending, contracts, tax ex-penditures, and other subsidies in a singlelocation.

One-stop transparency is important orpublic oversight o subsidies. Subsidiescome in a dizzying variation o ormsin-cluding direct cash transers, loans, equityinvestments, contributions o property orinrastructure, reductions or deerrals otaxes or ees, guarantees o loans or leases,



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and preerential use o government acili-tiesand are administered by a variety ogovernment agencies.

Placing all data about governmentsubsidies on a single website can uncover

waste and highlight opportunities or sav-ings. For example, when Minnesota beganto require agencies to submit reports onthe perormance o subsidized projects,the reports revealed that numerous proj-ects were receiving assistance rom twoor more unding sourcesthat is, Min-nesota taxpayers were sometimes double-and triple-paying or the creation o the

same jobs. Ater the centralized publica-tion o those reports, the double-dippingstopped.13

One-Click Searchable and

DownloadableTransparent inormation is only as useulas it is easily accessible, which means eas-ily searchable. Transparency websites inthe leading states oer a range o searchand sort unctions that allow residents tonavigate complex expenditure data with asingle click o the mouse. In Transparency1.0 states, residents who dont already

Transparency 1.0

Incomplete: Residents have access to

only limited inormation about public

expenditures. Inormation about

contracts, subsidies, or tax expenditures

is not disclosed online and oten not

collected at all.

Scattered: Determined residents who

visit numerous agency websites or make

public record requests may be able to

gather inormation on government

expenditures, including contracts,

subsidies, and special tax breaks.

Tool for Informed Insiders: Researchers

who know what they are looking or

and already understand the structure ogovernment programs can dig through

reports or data buried beneath layers

o subcategories and jurisdictions.

Transparency 2.0

Comprehensive: A user-riendly Web

portal provides residents the ability

to search detailed inormation about

government contracts, spending,

subsidies, and tax expenditures or all

government entities.

One-Stop: Residents can search all

government expenditures on a single

website.

One-Click Searchable: Residents can

search data with a single query or browse

common-sense categories. Residents cansort data on government spending by

recipient, amount, legislative district,

granting agency, purpose, or keyword.

Residents can also download data to

conduct detailed o-line analyses.

Transparency 2.0 Is Comprehensive, One-Stop,One-Click Budget Accountability and Accessibility



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know what they are searching or or whereto look will tend to get stymied by inscru-table layers o subcategories, jurisdictions,and data that cant be readily compared.Transparency 2.0 states, by contrast, allowresidents to browse inormation by recipi-

ent or category, and to make directed key-word and feld searches.

Citizens who want to dig deeper intogovernment spending typically need todownload and analyze the data in a spread-sheet or other orm. Downloading data-sets can also give residents the ability toaggregate expendituresor a particularcompany, agency or date, or instancetosee patterns or understand total spendingamounts that might otherwise be lost in asea o unrelated data.

Transparency 2.0 MakesGovernment More Eectiveand AccountableStates with good transparency websiteshave ound that these sites result in a wide

variety o benefts or state residents andthe government. Transparency websiteshave helped governments fnd ways to savemoney and meet other public policy goals.

Transparency websites save money. Trans-parency 2.0 states tend to realize signif-cant fnancial returns on their investment.The savings come rom sources big andsmallmore efcient government admin-istration, ewer inormation requests orsta, and more competitive bidding or

public projects, to name just a ewandcan add up to millions o dollars. The big-gest savings may be the hardest to measure:the abuse or waste that doesnt happenbecause government ofcials, contractorsand subsidy recipients know the public islooking over their shoulder.

Transparency websites oten help statesrealize signifcant benefts by identiyingand eliminating inefcient spending. InTexas, the Comptroller was able to utilizethe transparency website in its frst twoyears to save $4.8 million.14 Once South

Dakotas new transparency website waslaunched, an emboldened reporter re-quested additional inormation on subsi-dies that led legislators to save about $19million per year by eliminating redundanciesin their economic development program.15

Transparency websites save states moneyby enabling them to renegotiate contracts.Aggregating and posting the inormationonline helps identiy opportunities to cutcosts. For example, using its transparency

website, Texas was able to renegotiate itscopier machine lease to save $33 millionover three years. The state was also ableto negotiate prison ood contracts to save$15.2 million.16

Transparency websites also save mil-lions by reducing the number o costly in-ormation requests rom residents, watch-dog groups, government bodies, and com-panies:

Massachusetts procurement web-site has saved the state $3 million byeliminating paper, postage, and print-ing costs associated with inormationrequests by state agencies and paper-work rom vendors. Massachusetts hassaved money by reducing sta time orpublic record management, retention,provision, archiving, and documentdestruction.17

The Utah State Ofce o Education

and the Utah Tax Commission saveabout $15,000 a year rom reducedinormation requests. These are onlytwo o the more than 300 govern-ment agencies in the state, suggestingthat Utahs total savings are likely argreater.18



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Table 2: Cost to Create a Transparency Website24

Entity Website Cost

United States o America Less than $1 million

Alaska $15,000-$25,000 rom existing budget

Caliornia $21,000

Florida Existing budget

Kansas $100,000 rom existing budget

Kentucky Funds rom existing budget to develop,

$150,000 additional budgeted to implement

Louisiana $1,000,000

Maryland Less than $100,000

Missouri $293,140 rom existing budget

Nebraska $38,000

Nevada $78,000

Oklahoma $8,000 plus existing sta time

Oregon Existing budget

Pennsylvania $456,850

Rhode Island Existing budget

South Carolina $310,000, rom existing budget

Texas $310,000

Utah $192,800, plus existing sta time

Washington $300,000

According to RJ Shealy, Spokespersonor the South Carolina Comptrol-ler Generals Ofce, South Carolinahas seen one-third as many open re-cords requests as they had prior to thecreation o its transparency website,

signifcantly reducing sta time andsaving an estimated tens o thousandso dollars.

It is estimated that Kentuckys websitewill eliminate 40 percent o the ad-ministrative costs o procurement as-sistance requests, and could reduce thecosts associated with Open Recordsrequests by as much as 10 percent.19

Transparency websites also save statesmoney by increasing the number o com-peting bidders or public projects. In 2009,Texas reported receiving lower bids orcontracts ater making contracting inor-mation available to the public.20

Online transparency oers increased sup-port or a range o other public policy goals,including promotion o community investmentand afrmative action goals. Governmentsoten stumble when trying to meet com-munity investment and afrmative actiongoals because managers struggle to bench-mark agencies, spread best practices, oridentiy contractors who advance these



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goals. Online transparency portals allowstates to better measure and manage theprogress o such programs. For example,transparency websites allow agencies toidentiy minority- or woman-owned com-panies that have done business with other

agencies across the state.

Online transparency costs little. Thebenefts o transparency websites havecome with a surprisingly low price tag.The ederal transparency websitewhichallows Americans to search through ederal

spending totaling more than $2 trillion ayearcost less than $1 million to create.Missouris websitewhich is updateddaily and allows its residents to searchthrough state spending totaling over $20billion a yearwas mandated by executive

order and was created entirely withexisting sta and revenues.21 Nebraska hasspent $38,000 or the frst two phases oits website.22 Oklahomas Ofce o StateFinance created its transparency websitewith $40,000 rom its existing budget.23(See Table 2.)



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In 2010 many states took important stepstoward improved spending transparen-cy. Several joined the growing ranks o

Transparency 2.0 states by launching new

websites with checkbook-level detail onstate spending. Others upgraded their ex-isting websites to provide more inorma-tion and be easier to use. And a ew havegone beyond Transparency 2.0 by devel-oping and implementing new online toolsor citizen empowerment.

Six States Launched NewTransparency Websites in2010In 2010, six statesArizona, Indiana,Massachusetts, Michigan, New Hamp-shire and Wisconsincreated new trans-parency websites. Arizona and Indiana

launched checkbook-level, user-riendly,comprehensive sites, while Michigan andWisconsin launched sites that providecheckbook-level detail, but still have much

room or improvement. Massachusettslaunched a airly comprehensive website,but it is only partially complete, and NewHampshire launched a website that lacksmost eatures o Transparency 2.0.

ArizonaIn 2010, Arizonas Department o Ad-ministration created a new transparencywebsite called OpenBooks. Beore Open-Books launch, residents had to rely on awebsite called AZCheckbook, a Transpar-

ency 1.0 portal. Launched by ormer StateTreasurer Dean Martin without an execu-tive order or statute mandating its launch,AZCheckbook oers an array o brightly-colored pie charts and pop-up line graphs,but simply lists aggregate spending num-bers or various government departments

States Continued Progress Toward

Transparency 2.0 in 2010



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and agencies. In comparison, the new web-site, OpenBooks, boosts Arizonas govern-mental transparency by displaying spe-cifc recipients o government spending.It is the ofcial state transparency website,mandated by 2008 legislation, and is op-

erated by the Arizona Department o Ad-ministration. OpenBooks allows residentsto monitor most state expenditures at thecheckbook level.

The Arizona Department o Adminis-tration designed the website to be acces-sible both to researchers who know whatthey are looking or and to non-technicalcitizens visiting the site or the frst time.For example, researchers can locate spe-cifc payments using a twenty-two digitnumber called an Entity Transaction ID.Ordinary citizens can also browse stateagency spending by contractor or activity.Visitors can also use the website to dis-cover how much money the state pays outin tax exemptions, grants, and economicdevelopment incentives.

The state can still do more to shinelight on its expenditures. While the web-site tracks subsidies in the orm o grants

and tax creditsand in some cases showsthe number o jobs and investments thatcompanies are expected to delivermanysubsidy programs lack this detail and noinormation is provided on the amount otax credits given to individual companies.25

In 2011, the Department o Administra-tion should upgrade the website to includeinormation on past expenditures and in-ormation on local and county spendingand budgets.

IndianaIndianas transparency portal is new, com-prehensive, and easy to use. The website,launched in August 2010, shows that with acoordinated eort among various govern-ment agencies (in Indianas case betweenthe Auditors ofce, the Ofce o Manage-ment and Budget, the Ofce o Technol-ogy, the Department o Administration,the Department o Local GovernmentFinance, and others), a state can developa Transparency 2.0 website that is highquality rom the moment it launches.26

The transparency portal is linked to theState Contract Portal, which providescheckbook-level inormation on payments

Lack o Full Reporting on Indianas EconomicDevelopment Incentives Leads to Apparent Misreportingo Job-Creation Numbers

Publicly posting fne-grained spending inormation has the added beneft o pro-viding a reality check on ofcial characterizations about program perormance. InIndiana the transparency website posts the hoped-or results o the states economicdevelopment incentives without posting the actual results. Ofcial characterizationso the success o the states economic development programs were challenged by a

much-reported audit o the Indiana Economic Development Corporation (IEDC).The study examined 597 job-creation projects and revealed that only 38 percent othe jobs announced by IEDC were actually created.27 The reason: many o the pro-grams sponsored by IEDC either underperormed or never began in the frst place.These problems could have been identifed earlier i Indiana had posted the numbero jobs actually created through economic development programs.



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to specifc vendors. In addition to allow-ing visitors to search or expenditures bythe vendor or specifc project, visitorscan customize their search to look or ex-penses incurred over a particular periodo time, in a specifc geographic area, by aparticular government agency, or o a cer-tain amount. Once visitors have located acontract they are interested in, the portalallows them to open a PDF copy o thecontract.

The State Contract Portal also allowsvisitors to search by the type o contractsuch as license, grant, attorney ee, or pro-curement contract. This is a user-riendlyeature unique to Indianas transparency

portal. The avenues through which thegovernment distributes unds are otenconvoluted and difcult or the averagecitizen to ollow. This new eature empow-ers citizens to easily distinguish among avariety o government expenditures.

The transparency website also pro-vides many tools and links that allowresidents to monitor Indianas revenue,expenditures, and government peror-mance. The portal provides a list o cur-

rent Quantity Purchases Agreements,which are the prices under which vendorsagree to supply goods and services toIndianas state agencies on an on-going,as-needed basis. Residents can also usethe transparency portal to browse or in-ormation on revenue and how IndianasAmerican Recovery and ReinvestmentAct (ARRA) unds are distributed. Thewebsite provides inormation on gov-ernment employees, so that interestedresidents can see how many government

employees are in certain departmentsand how much they are being paid. Web-site users can also click on links to readfnancial reports, look up inormation onlocal government budgets, and track thegovernment o Indianas perormancebased on tangible results.

MassachusettsMassachusetts launched a new budgettransparency website in the past year calledMassachusetts Transparency. The admin-istration has improved it steadily, but stillhas a long way to go.

Massachusetts Fiscal Year 2011 StateBudget calls or the development o a com-prehensive state budget and spending web-site coupled with improved transparencyo transerable and reundable business taxcredits. It also marks the frst explicit man-date in the U.S. or inclusion o quasi-publicagencies spending and revenue inormation.

The new eatures will eventually make

Massachusetts site one o the nations mostcomprehensive transparency websites.

The tax expenditure budget linked atthe Massachusetts transparency site sets astrong standard or presenting tax expen-ditures. The report includes all tax expen-ditures, along with the cost and descriptiono each program, and includes historicalinormation. The website includes a linkto the easy-to-use American Recovery andReinvestment Act (ARRA) website, which

includes all ARRA spending and completecontracts or that spending. In addition,the Massachusetts website solicits eed-back and provides instruction or the pub-lic on how to use and fnd inormation.

However, the inormation on detailedspending currently includes only datalinked through the states Comm-PASSprocurement website, which does not in-clude all contracts with vendors. This isa temporary condition until the inorma-

tion is made more comprehensive and getshoused in the main transparency website,as mandated by the new law. The site needsto meet its mandate by including the taxcredit incentives and quasi-public agencyspending. It should also be organized in amore user-riendly manner or the public.



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MichiganMichigans new transparency website em-braces many aspects o Transparency 2.0,but alls short in important ways.

On the plus side, Michigans site gives

users inormation on payments to contrac-tors, along with details on tax expendituresand limited inormation on the amount ounds spent by dierent government agen-cies. The site also includes user-riendlyinteractive applications that allow usersto see where dierent state departmentsspend their money. Every department hasa bar graph and pie chart breaking downits expenditures, and each segment o thepie chart can be broken down an addition-al layer to reveal greater detail.

However, Michigans site alls short byrequiring citizens who want to view an ac-tual copy o the contract to cross reerencebetween disconnected documents on thesite.28 In addition, the charting unctionuses vague category descriptions and ailsto enable the user to drill down to see spe-cifc expenditures. For example, users canlearn that the state paid $306 million tocompanies or transportation projects, but

cannot fnd out which rail lines or high-ways were built or repaired.29

New HampshireNew Hampshires transparency websiteis a brand new addition to the online net-work o state transparency portals, but itlacks most eatures o Transparency 2.0.Launched in December 2010, the portalis designed to provide visitors with inor-mation on the states budget, revenue, andexpenses, but the inormation is limited

and its expenses are not checkbook-level.Nowhere in the website, or example, canvisitors fnd the government spending onspecifc transactions or vendors.

WisconsinWisconsins new transparency website,created in all 2010, was improved near theyears end and now embraces the compre-hensiveness o Transparency 2.0. Wiscon-sin has been improving its website over the

course o several years, and now providescheckbook-level detail about state spend-ing.30 Visitors can now fnd inormationon the payments made to specifc vendorsthrough several easy-to-use search tools.(see Figure 3.)

The transparency website has a separate,new portal or contracts called ContractSunshine (beta). Visitors can easily fndinormation on specifc payments made toindividual vendors. In the contract portal,the search unctions are intuitive and easy-to-use, and visitors can fnd inormationon payments made to vendors or specifcservices in certain years. The main trans-parency portal also allows users to learnabout past contracts and grants, and linksto websites that reveal campaign fnanceinormation and lobbying reportsexcel-lent innovations that could someday becross-reerenced on a company-by-com-pany basis.

The website still has much to improveupon. Although the contract portal iscomprehensive and user-riendly, themain transparency portal remains difcultto navigate and archaic.31 The site still liststhe improvements planned or years 2006and 2007, and one button conusingly en-courages users to submit purchasing linkor inormation, and then links to an e-mail address. Various other links do notwork at allvisitors are unable to see web-

sites like the Government AccountabilityBoards Eye on Financial Relationshipspage, which tracks the relationship be-tween elected ofcials and companies.



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Several States Improvedtheir Existing WebsitesSeveral states have made signifcant im-

provements to their sites, allowing resi-dents to better view how their state gov-ernment manages the public purse. Evenstates with leading transparency websiteslast yearsuch as Kentucky and Texascontinued to make improvements thathave resulted in their sites being amongthe nations best. The recent improve-ments made by Georgia, Louisiana, Mary-land, Nevada, New Jersey, Oregon, SouthDakota, and Utahdiscussed belowareindicative o the many improvements

states have made to transparency websitessince the beginning o 2010.

GeorgiaGeorgia added a tool to its transparencysite that allows residents to search ex-penditures by the type o good or service

purchased. This is an important aspect oTransparency 2.0 because it shines a lighton where citizens tax dollars are going.

LouisianaLouisiana has gone rom a state lackingin many eatures o Transparency 2.0 toa leader in the movement. Website visi-tors can now view inormation on expen-ditures not included in the ofcial budgetthat would typically remain hidden romthe public eye. For example, visitors candiscover the amount o tax expendituresgiven to tobacco companies, beer compa-nies, gas companies, and others. Visitorscan also track government spending going

back several years.

Louisiana has also made its websiteeasier to use. Upon entering the site, visi-tors are presented with an easy-to-navigatetemplate with nine separate buttons linkingthem to various unctions. (See Figure 4.)

Figure 3: Wisconsins Search Tools with Who is Selling? Selected

overy

rtation

ALL # A B C D E F G H I J K L M N O P Q R S T U V

Indianhead Enterprises of Menomonie

UMOS Inc

Vaisala Inc

10 West Family LP

2 SISTERS, THE

2-A-T Solutions

363949000 b

364367825

3M Chicago Sales Center

4Imprint Inc

751300240

A Plus Imaging, Inc.

A-1 FENCE COMPANY

AAMCO Transmissions of Brown Deer

AAMCO Transmissions of West Madison



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MarylandSince last year, Maryland added a eature

allowing visitors to view all the grantsawarded to companies and groups. Beorethis section was available, citizens had tosit through the Department o Budget andManagements website to fnd inorma-tion on economic development incentives.Now, Marylands new Grants sectionprovides visitors with detailed descriptionso each economic development incentive.This adds a high level o transparency tohow taxpayers dollars are spent.

NevadaIn the past year, Nevada upgraded itstransparency website so that visitors canfnd contracts dating back to 2006. (SeeFigure 5.) For Nevada, this is importantprogress toward Transparency 2.0 because

in order to hold contractors and state bu-reaus completely accountable, residentsmust be able to view the historical fnan-cial relationships between companies andthe state. By posting transactions that dateback to 2006, the state enabled residentsto track trends in state spending and con-tract awards over time.

New JerseyIn the past year, New Jersey upgraded itstransparency website so that it is now check-book-level, allowing visitors to track the

payments made to individual vendors. (SeeFigure 6.) Last year, the transparency portalonly provided visitors with limited inorma-tion such as aggregate spending numbers ordepartments and agencies. Visitors can nowtrack specifc amounts paid to general con-tractors, subcontractors, consultants, and

Figure 4: Louisianas Easy-To-Navigate Template

About LaTrac

Welcome to Louisiana Transparency and Accountability (LaTrac). LaTrac's primary mission is to make Louisiana's state

government finances, and operations transparent and accountable to Louisiana's citizens. Today, it is more critical than

ever that governments function at the highest level of integrity and efficiency in order to fairly meet the needs o f its people.

Accordingly, it is a necessity that government operations be open and transparent to the public. LaTrac addresses this

need, presenting key Louisiana finances and operations in a clear and concise format designed for ease o f public use.

For a high-level overview of Louisianas finances for the year ending June 30, 2009, see the Popular Annual Financial

Report.



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Figure 5: Nevadas Site Now Allows Users Find Contracts Dating Back to 2006.

Controller's Office Department of ANevada Open Government State of Nevada Governor Brian Sandoval

Statewide Expenditure Summary by Vendor

This is a more detailed view of a portion of the State of Nevada's actual Expenditures.

The settings below show exactly which Expenditure data is being displayed. You can

click on any row to drill further into the data, or you can select one of the view options

at the right, to return to a top-level summary view.

Fiscal Year:

Vendor:Search for - Contains COMPANY

Code Vendor FY 2006 % of Tot

T81074191

T81104801B

T80984703

T29000017

T81106788

T81106260

T81106774

T81104801A

T81104801C

T81004896C

T80021290

NEVADA POWER COMPANY 30,293,021.98 26.22

SIERRA PACIFIC POWER COMPANY DBA NV ENERGY 15,728,974.78 13.61

FIRST AMERICAN TITLE COMPANY OF NEVADA 9,075,432.81 7.85

STANDARD INSURANCE COMPANY 5,994,395.95 5.19

BP ENERGY COMPANY 5,226,841.25 4.52

NEVADA POWER COMPANY ENERGY ASSITANCE STATION 6 4,111,791.70 3.56

PUBLIC SERVICE COMPANY OF COLORADO 3,700,200.00 3.20

NEVADA POWER COMPANY 2,939,141.76 2.54

NEVADA POWER COMPANY ENERGY ASSISTANCE STATION 18 2,903,586.95 2.51

WESTERN TITLE COMPANY INC 2,702,539.60 2.34

REBEL OIL COMPANY INC 2,514,510.81 2.18

Figure 6: New Jerseys Site Allows Visitors to See the Payments Made to IndividualVendors

NJ Financial Reporting As of September 30, 2010

State Current Year Purchasing Summary By Vendor By Fiscal Year

Reset the Search Search

Type in a Vendor's Name and c lick the Search button to locate specific Vendors

Vendor's Name

YTD Total Between $ And $

HINT: Enter a whole number - no $, commas, or decimal point

Next >

Vendor YTD Total

MOLINA INFORMATION SYSTEMS LLC $52,095,203 .00

HONEYWELL INTERNATIONAL $48,515,713.00

EASTER SEALS SOCIETY OF NJ ESSEX HOUSING PROGRAM $42,451,390.00

ENERGY SOLVE LLC $32,058,751.00

ADVOSERV OF NEW JERSEY INC $22,377,726.00

TRC ENVIRONMENTAL CORPORATION $21,814,970.00

DEVEREUX FOUNDATION $19,643,208.00

DELL MARKETING LP $19,517,369.00

WOOD SERVICES INC $18,600,000.00

VERIZON NEW JERSEY $17,192,816.00

IBM CORPORATION ACCOUNTS RECEIVABLE $16,329,334.00



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many other business entities, all the way backto 2004. New Jersey has also joined severalother leaders in transparency by providingvisitors with a link to its tax expenditure re-port, which did not exist beore 2009.

OregonOregons transparency website was improveddramatically by embedding data-viewing toolscreated or Oregons data.oregon.gov project.With these new tools, website users no lon-ger need to download the entire spreadsheeto all state agency spending to perorm analy-sis. The tools allow users to search the data,download their search results, and createmaps and charts rom the data. The websitewas also upgraded in 2010 by providing users

with contact inormation or members o theTransparency Oregon Advisory Commissionand audio archives o commission meetings.

Oregon continues to have room or im-provement in providing a ull picture othe states spending. The website has yet toinclude checkbook-level spending by localgovernments or quasi-public agencies inthe state. Legislation has been proposed inthe 2011 session to include details o re-cipients and results o economic develop-ment tax expenditures on the transparency

site. In addition, the website still does notinclude ull details o state contracts.

South DakotaIn the past year South Dakota upgraded itstransparency website so that it now providescheckbook-level detail, allowing visitors totrack the payments made to individual ven-dors. Previously, the scope o the transpar-ency portal was limited, as it only allowedusers to view the aggregate spending numbersor departments and agencies. South Dako-ta also now posts copies o all contracts orsupplies, services, and proessional servicesreceived by the state.

Utah

In the past year, Utah upgraded its trans-parency site to provide citizens with awealth o inormation on governmentspending. By using the transparency site,citizens can now read up on the paymentsmade to vendors and view copies o somecontracts. They can learn the good or ser-vice purchased, which government agencyunded the project, and many other use-ul pieces o inormation that help citizenstrack Utahs spending.



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In the past year, states across the na-tion have made signifcant progress inreporting and accountability in govern-

ment spending. From Arizona to New

Jersey, states have improved their trans-parency websites to allow citizens to viewcheckbook-level data on government ex-penditures quickly and easily.

In order to assess states progress to-ward the standards o Transparency 2.0,each states transparency website was an-alyzed and assigned a grade based on itssearchability and breadth o inormationprovided. (See Appendix A or the com-plete scorecard and Appendix B or an ex-

planation o the methodology.) An initialinventory o each states website was thensent to the administrative ofces believedto be responsible or operating each stateswebsite. Ofcials rom 39 states respond-ed, clariying inormation about their web-sites. In some cases, the researchers used

the state comments to adjust and fne-tunestates grades.

Based on the grades assigned to each

website, states can be broken into three cat-egories: leading states, emerging states, andlagging states. (See Table 3 and Figure 7.)

As was the case last year, spendingtransparency does not reect dierencesbetween Red states and Blue states.The average score or a Democratic-lean-ing state (determined by Presidential votein 2008) was 61.3 while that o a Republi-can-leaning state was 61.0, a dierence oless than hal a single point. Furthermore,

o the nine states leading the way in trans-parency eorts nationwide, fve were wonby President Obama in the 2008 electionand our were won by Senator McCain.Similarly, among the nine states consid-ered lagging states because o the ailinggrade that they received, fve were won by

Making the Grade: Scoring State-Level

Progress Toward Transparency 2.0

Making the Grade 23


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Category Grade States

Leading States A Kentucky, Texas

A- Arizona, Indiana, Louisiana

B+ Massachusetts

B North Carolina

B- Ohio, Oregon

Emerging States C+ Missouri, New Jersey, Pennsylvania, Virginia

C Alabama, Colorado, Georgia, Hawaii, Illinois, Kansas,Maryland, Michigan, Minnesota, Mississippi, Nebraska,Nevada, New York, Utah

C- Oklahoma, Rhode Island

D+ Caliornia, Delaware, New Mexico, South Carolina,South Dakota, Wisconsin

D Florida, VermontD- Alaska, Tennessee, Wyoming

Lagging States F Arkansas, Connecticut, Idaho, Iowa, Maine, Montana,New Hampshire, North Dakota, Washington,West Virginia

Table 3: Leading, Emerging, and Lagging States

Figure 7: How the 50 States Rate in Providing Online Access to Government

Spending Data



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Changes to the Grading Criteria rom 2010

Reecting rising standards or government transparency, the grading criteria changedslightly rom the 2010 Following the Money report, resulting in changes in grades orsome websites whose content has not changed since 2010.32 For example, Illinois scoreell signifcantly due to more rigorous scoring criteria and no signifcant improvementson the states transparency website. By improving its online transparency reporting,Kentucky remained a top-scoring state; but the more stringent criteria nonetheless ledto a one-point reduction in its score. Changes in the criteria were:

Two new grading criteria were added, one or enabling users to download dataon payments made to vendors, and another or providing tools inviting visitorsto give eedback on the website and its content.

In order to provide more fne-tuned grading, state websites were credited orproviding descriptions about specifc payments. This is a departure rom last

year, when sites were not awarded any points or having such brie descriptions.Recognizing gradual steps toward Transparency 2.0 practices, states were givenmore points or providing more complete inormation.

States were awarded points or providing inormation on tax expenditures only itheir transparency website was linked to their tax expenditure report. Tax expen-diture reports, now provided by at least 42 states, have become the new standardor measuring unds spent on tax exemptions and preerences.33 Tax expendituretransparency was graded on a graduated scale that reects dierences in thecomprehensiveness and detail o that reporting.

Because o heightened standards, states were awarded ewer points or merelyproviding the dollar amounts o grants and individual economic developmentsubsidies without also providing inormation about their intended benefts andthe delivered results.

Along with the new grading criteria, this years report also diers rom last yearsin that it evaluates a broaderbut more precisely defneduniverse o websites thatprovide government fnancial inormation to the public. In most states there is a clearlydesignated central transparency site, which we used or evaluation by deault. For stateswithout a transparency website, we based scoring on the states procurement website.Thus, the procurement websites belonging to Arkansas, Connecticut, Hawaii, Iowa,Maine, Montana, North Dakota, Pennsylvania, and West Virginia were evaluated inthis years report card.34 Procurement sites typically provide some publicly availablecontracting inormation, even i they are designed primarily to solicit bids rom vendorsrather than to provide inormation to the public. Intrepid citizens can sometimes fndcheckbook-level detail on these sites. Procurement sites tended not to be user-riendly,and that is reected in the scoring. In the case o Vermont, public ofcials directed us toa separate Department o Finance and Management website as the portal with the mosttransparency eatures. That site was the basis or Vermonts scoring.

Making the Grade 25


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President Obama in the 2008 election andour were won by Senator McCain.

The ollowing sections summarize com-mon traits shared by the states in each othese categories to highlight their strengths

and weaknesses.

Leading StatesNine states have set the standard orspending transparency by establishinguser-riendly portals that contain compre-hensive inormation on government ex-penditures. Citizens and watchdog groupscan use the sites to monitor governmentspending quickly and easily. All o the sitesare searchable by the vendors name andtype o service purchased, most o the sitesprovide comprehensive inormation ongrants and economic development incen-tives, and more than hal o these sites pro-vide complete copies o vendor contracts.

Over the past year, our statesArizo-na, Indiana, Louisiana, and Texashave

created or improved their websites to nowearn As. These states, along with Ken-tucky, whose transparency website toppedour ratings in 2010, are true leaders in theTransparency 2.0 movement. Arizona andIndiana launched brand-new comprehen-sive websites. Louisiana made major im-provements to its old site by adding de-tails about past contracts, a link to its taxexpenditure report, and inormation abouteconomic development incentives. Texasmade a ew signifcant changes, such as

allowing visitors to view actual copies ocontracts made with vendors.

Among the most distinctive eatures othe leading transparency websites are thebreadth and level o detail o the inorma-tion they contain. For example, fve o the

statesTexas, Kentucky, Indiana, Arizona,and Ohioprovide copies o vendor con-tracts in their entirety, and the rest pro-vide some degree o inormation about thegoods or services received by the state inparticular transactions.

Another eature o these sites is theirease o use. Each o the sites providestools that allow users to make targetedsearches and to sort the data. For example,Indianas site allows visitors to speciy thetypes o payments made to vendors (e.g.Grant, Lease, Proessional/PersonalServices, Contracts or procured ser-vice) in addition to the typical search boxor keywords. Louisianas site has separatesearch sections or contracts, grants, andeconomic incentives.

Even though these states have the bestTransparency 2.0 practices, they still haveroom or improvement. One-third o theleading state sites do not allow users todownload datasets o inormation withvendor-specifc inormation, making itdifcult or citizens to uncover total gov-ernment expenditures received by certaincompanies or government spending over

a certain period o time. Also, only our othese leading statesIndiana, Massachu-setts, North Carolina, and Texasprovidefnancial inormation on local governments.

Emerging StatesThe websites o emerging states providecheckbook-level detail on government

expenditures, but they are less searchableand lack the breadth and depth o inor-mation that characterizes the sites o lead-ing states. Only our o the 31 emergingstates, or example, provide copies o allvendor contracts. Only six states providelinks to their tax expenditure reports,



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making it difcult or residents to usetheir states transparency portal to track allorms o government spending.

The states in the C range, however,are well on their way to making their web-sites easy to use. Out o the 20 C state

websites, 17 are searchable by both vendorname and type o activity and 16 providea direct link rom their site to their stateswebpage on American Recovery and Re-investment Act unds.

Many states that garnered ailing scores

last year made recent improvements totheir sites or launched new ones to earnCs or Ds. Last year, New Jerseysand South Dakotas transparency portalsprovided only aggregate spending num-bers or departments and agencies. Overthe past year, New Jersey and South Da-

kota upgraded their websites to C+ andD+ quality, respectively, and now userscan view payments made to specifc ven-dors. Michigan and Wisconsin, which didnot have transparency websites last year,recently created their websites, and nowearn a C and D+, respectively.

Score in Score inFollowing Following Improvementthe Money the Money in Annual

State 2011 2010 Score

Arizona 92 12 80

New Jersey 78 25 53

South Dakota 63 25 38

Louisiana 92 67 25

Oregon 82 59 23

Georgia 74 52 22

Nebraska 71 56 15

Texas 96 82 14

North Carolina 85 74 11

Caliornia 62 53 9

Note: States included in the table do not include states that were scored this year basedon their procurement website because these websites were treated dierently in theprevious report.

Table 4: Top 10 Biggest Improvements in TransparencyWebsites From 2010 to 2011

Several states dramatically improved their online budget transparency in the pastyear. The states with the largest gains made major improvments to their existingtransparency portals. Out o all states with wesites last year, these are states thatmade the largest improvements:

Making the Grade 27


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Lagging StatesFinally, ten states lag behind the transpar-ency movement and have only taken smallsteps toward improving government ac-countability. In the past year, the states in

this category have not established trans-parency websites, have not made theirprocurement sites accessible to the public,or have maintained sites that do not in-clude checkbook-level detail on govern-ment expenditures.

Most lagging states have launchedtransparency or procurement websites thatprovide either limited or superfcial inor-mation about government expenditures.On New Hampshires site, visitors canview aggregate expenditures or govern-ment unctions (such as transportation)and the salaries o state employees, but notindividual payments to vendors. Arkansas,

Montana, and other lagging states, pro-vide visitors access to term contracts orpurchasing orders, which establish a setprice at which the government can buy aspecifc good or service. Visitors cannotfnd out how much money the govern-

ment has paid to a specifc vendor or whatservices were contracted. For example, aterm contract or purchase order will givethe cost o a box o photocopy paper, butnot how many boxes the state purchased.

Maines website is the only procure-ment or transparency website that is notaccessible to the public. Since visitorsmust be registered as vendors to access thewebsite, citizens and government ofcialscannot use the site as a tool in monitoringgovernment spending. Maines site was notconsidered eligible or scoring in the anal-ysis because it is not open to the generalpublic.



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Many states go above and beyondsimply providing checkbook-level inormation on government

spending. They have developed new tools

and posted new sets o inormation ongovernment expenditures, giving residentsunprecedented ability to monitor howtheir government allocates resources.

Innovative States HaveDeveloped Best Practices orProviding Vendor-SpecifcPayment InormationMore and more transparency websites areadopting easy-to-use tools or tracking pay-ments made to vendors. In the past, userswould be stymied by archaic search meth-ods and limited inormation on vendors

and payments. But as more and more web-sites make the shit to Transparency 2.0,they are adding search and sort tools thatmake their sites easier to navigate.

On North Carolinas site, in addition tobeing able to search by vendor name andkeyword, users can also search by the ven-dors location, allowing citizens to see howgovernment spending is being distributedgeographically. On Alabamas site, userscan search by the month the payment wasawarded.

One user-riendly way to search or apayment is by typing the vendors name

into a search box. More and more statesare adding search boxes to their transpar-ency websites. New Jersey enables users totype in the name or part o the name oany contractor, subcontractor, consultant,person, frm, corporation, or organizationreceiving a payment rom the state. The

Many States Have Improved their

Websites Beyond BasicTransparency 2.0 Standards

States Have Improved their Websites Beyond Transparency 2.0 29


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site will display the amount paid to anyvendors who match the query. This ishelpul because users may not know ex-actly what they are looking or or the ex-act name o a contractor. In this respect,websites like New Jerseys are much bet-

ter than websites such as Colorados, inwhich users must search or vendors byselecting the frst and second charactero the vendors name rom scroll downmenus.

Some transparency portals have addedtools to allow users to easily dierentiategrants rom vendor contracts. Most websitesaccomplish this by adding a separate searchunction or grants. In the past, users wouldhave to fnd the details or a specifc pay-ment (through a vendor search) to fgure outwhether each payment was actually a grant.For example, on Rhode Islands site users canonly learn that the payment is a grant rom

the description box once a search has beenqueried. Visitors to Marylands transparencywebsite now have the option o searchingor payments or grants rom the portalsmain page, and visitors to New Yorks sitecan search or a specifc kind o contract

such as or commodities, equipment, grants,etc. (See Figures 8A and 8B.)

Innovative States HaveCreated New Datasets andToolsMany states have developed new tools andposted new datasets or their transparencywebsites. For instance:

State loans: Some states provide userswith inormation on loans the state has

Figure 8A: Marylands Payments Portal



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given out. On Marylands site, or ex-ample, visitors can learn which gov-ernment departments gave certainkinds o loans to specifc companies.

State revenue: Some states pro-

vide inormation on state revenue.At a basic level, Indiana, or in-stance, allows visitors to learn howmuch revenue comes rom dierenttaxessales tax, individual incometax, corporate income tax, etc. Otherstates have gone urther by provid-ing visitors with a wealth o ways todigest revenue inormation. NewJerseys site, or example, allows visi-tors to uncover how specifc agenciesreceive their revenue. Visitors can,or instance, learn that the Envi-ronmental Protection Agency hascollected $8,013.66 through the LakeRestoration Fund.

Bonded indebtedness: Some stateshave taken the benefcial step o post-ing inormation on the debt the statehas accrued by selling bonds. A por-tion o Virginias website is dedicatedto specifc bonds sold by the state.

Users can see the amount o the bonds,the interest owed, and how ar alongthe state is to paying o its debt. (SeeFigure 9.) This eature would be espe-cially valuable i applied also to a statesquasi-public agencies, which otenissue large quantities o technicallyo-budget debt paid or by ees.

State property: Some states post in-ormation on government-owned land.This boosts government accountabilitybecause it allows residents to bettertally their governments assets. It alsoallows ofcials and residents to fgureout which parcels o government-owned

Figure 8B: Marylands Grants Portal



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allow states to speciy the kind o eed-back they want toward making specifcchanges to their website.

Watchdog-riendly applications:Some orward-looking states invite

watchdog groups and other citizensto report on abuses o power andwaste. Linked to its transparency site,Caliornias new Waste Watchers web-site asks or citizens to report placesthey see improper spending. Since itslaunch in 2010, suggestions made bycitizens on Waste Watchers have savedthe state $28 million.35 Once the statecorrects its spending, Waste Watch-ers will post detailed and easy-to-un-derstand explanations o the savings.For example, under the Departmento Toxic Substances Control: Aterreceiving a Waste Watchers complaintthat state-issued cell phones were being

underutilized, the service plans or190 mobile phones were terminated.Estimated savings is $7,670.00 permonth.36

Size o government: Washington

allows residents to learn the ways theirgovernment has grown or contractedover time. The website presentsprogram and agency spending totalsdating back to 1999, so residents cansee how much various agencies or pro-grams (e.g., Washington State Univer-sity, the entire transportation program)have spent year to year.

Agency and program accountability:Washington empowers residents tohold government agencies and pro-grams accountable or their spending.On Washingtons website is a tool thatcompares Washington agencies and

Figure 11: Washingtons Agency and Program Accountability Application



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programs estimated spending andtheir actual spending. With an intui-tive drilldown eature, visitors can viewthe estimated vs. actual spending orbig agencies, such as the Departmento Social & Health Services, and small

programs such as the library system atthe University o Washington. Visi-tors can also view which government

coers (or example, Federal GeneralFund, State Toxics Control Account,etc.) supplied the unds. I an agencyor program spends more or less thanprojected, visitors can then see wherethe over-spending or under-spending

came rom (salaries, travel expenses,goods and services procurement). (SeeFigure 11.)



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The researchers o this report surveyedofcials rom the 50 states askingthem to identiy the biggest obstacles

and challenges that they aced in introduc-

ing transparency in their state. The barri-ers mentioned to implementing transpar-ency ranged rom antiquated technologi-cal systems to the simple lack o adequateresources and unding.

The most commonly mentioned chal-lenge or states to overcome in develop-ing and implementing transparency web-sites is a lack o unding or transparencyprojects. Even among the states that hadalready developed transparency websites,

many reported doing so with very limitedunds, or in some cases, no budget at all.In many cases transparency websites werecreated only with existing resources. Aswe reviewed earlier, the cost to implementtransparency best practices can be quite

small compared to the reward i institutedand used properly and actively.

The current economic and political cli-

mate has let states with crippling budgetdefcits and orced them to tighten theirbelts. This can make it difcult or gov-ernment departments managing budgetinormation to secure the resources need-ed to invest in new transparency systems,especially i the benefts are viewed asmore distant in the uture. In Arizona, theobstacle cited by state ofcials was a lacko unding. No additional money was pro-vided to help develop the newly mandatedwebsite. Arizona overcame this challenge

by using existing fscal and personnel re-sources rom the General Accounting O-fce (GAO) o the Arizona Departmento Administration. Ofcials ound othercreative ways to keep down the costs oimplementing transparency by using a

State Ofcials Face Obstacles and

Challenges in OperatingTransparency Websites



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system currently in use by another state andmodiying it to Arizonas particular needs.37Even state ofcials in Kentucky, which isleading the way by implementing the besttransparency practices, described how thestate used existing resources to implement

transparency when no unding was specif-cally dedicated to the project. The ofcialsacknowledge that the lack o unding limitswhat they are able to accomplish.38 Otherstates that have expressed similar chal-lenges in dealing with a lack o undingwere Colorado, Massachusetts, Mississippi,Montana, Oregon, and Virginia.39

The next most-cited obstacle or statesto overcome was coordinating the manymoving pieces o a state government.It takes time and eort to coordinatemany dierent agencies, especially wheredierent agencies lack consistent anduniorm ways o reporting or storinginormation. Ofcials in Indiana andGeorgia, or instance, cited the lack o

uniorm inormation and reporting systemsas a major impediment in the creation o acentralized location or data collection andtransparency o state spending.40 Otherstates citing similar concerns includedArizona, Louisiana, Montana, Nebraska,

North Carolina, and Utah.41

A fnal main obstacle or states is over-coming antiquated accounting systems.This has been a problem or both Arizonaand Virginia, but they have been able tofgure out ways to still develop transpar-ency websites.42 Montana, though, hasbeen less ortunate. Montana ofcials be-lieve that their accounting systems are soantiquated that launching a transparencywebsite as recommended in this reportwould cost $2,719,780, with ongoing costson an annual basis between $620,000 and$670,000. They estimate the bulk o thetotal cost to be in the sotware, databaselicensing, and maintenance which wouldcost an estimated $2,186,002.43

State Ofcials Face Obstacles and Challenges 37


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Despite the continued momentumtoward Transparency 2.0as evi-denced by the improvement states

made to their online spending transpar-

ency websites in 2010state governmentshave a long way to go in ensuring that citi-zens have ready access to comprehensiveinormation about how their taxpayerdollars are spent.

Many state transparency websites stillhave room or major improvement.

Most transparency websites do notprovide detailed inormation on gov-ernment contracts. Even some o the

leading websites provide only a shortdescription o the purpose o contracts.

Only about hal o the websites allow us-ers to download datasets in ormats suchas Excel, enabling more detailed o-lineanalysis o government spending data.

Only 26 states include spending dataprior to Fiscal Year 2009.

Only 14 states provide links to their

tax expenditure reports.

Only 14 states provide any inormationabout local and county spending.

Only our states provide the mostcomprehensive level o inormationon grants and economic developmentincentives awarded to companies andorganizations.

In the next year, state governments

across the country should strive to im-prove government accountability. Leadingstates should advance the Transparency 2.0movement by continuing to develop inno-vative unctions that elevate transparencyand citizen involvement. Emerging statesshould ollow the example o the leading

Continuing the Momentum Toward

Greater Transparency:Challenges and Recommendations



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transparency states by improving the searchunctions on their websites and increas-ing the amount o inormation available tothe public. Lagging states need to join theranks o Transparency 2.0 governments byestablishing one-stop, one-click searchable

websites that provide comprehensive inor-mation on government expenditures.

Overall, state governments should makesite navigation more intuitive and allowvisitors to tailor their online searches byyear or geography. States should also al-low residents to view details on state loansgiven to companies, state revenue sources,state debt accrued through selling bonds,and other spending inormation.

Public budgets are the most concreteexpression o public valuesarticulatedin dollars and cents. As states grapple withdifcult decisions in an eort to makebudgetary ends meet, transparency web-sites provide an important tool to allow

both citizens and civil servants to makeinormed choices.

With continued progress toward on-line spending transparency, citizens inthe not-too-distant uture will be able toeel confdent in knowing that each dollaro state expenditure is accounted or andthat they can play a more constructiverole in debates over how those dollars arespent.

Continuing the Momentum Toward Greater Transparency 39


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Appendix A: Transparency Scorecard

State GradePointTotal

Checkbook-Level Website

Search byContractor

Search byActivity

Contract orSummary

InformationAvailable

Down-loadable

Total Possible 100 35 10 10 10 2

Kentucky A 96 35 10 10 10 1Texas A 96 35 10 10 10 2Indiana A- 93 35 10 10 10 2Arizona A- 92 35 10 10 10 2Louisiana A- 92 35 10 10 5 2Massachusetts B+ 87 35 10 10 5 2

North Carolina B 85 35 10 10 5 0Ohio B- 82 35 10 10 10 0Oregon B- 82 35 10 10 3 2New Jersey C+ 78 35 10 10 3 2Pennsylvania C+ 78 35 10 10 10 0Virginia C+ 77 35 10 10 3 2Missouri C+ 76 35 10 10 3 2

Alabama C 74 35 10 10 5 2Georgia C 74 35 10 10 3 2Nevada C 74 35 10 10 5 0Illinois C 73 35 10 10 3 0Kansas C 73 35 10 10 3 0Minnesota C 73 35 10 10 3 2New York C 73 35 10 10 3 2Hawaii C 72 35 10 10 5 0Maryland C 71 35 10 0 5 0Nebraska C 71 35 10 10 3 0Colorado C 70 35 10 10 5 2Michigan C 70 35 10 0 10 2Mississippi C 70 35 10 10 10 0Utah C 70 35 10 10 5 2

Oklahoma C- 66 35 10 0 0 0Rhode Island C- 66 35 10 10 0 2South Dakota D+ 63 35 10 0 10 0Caliornia D+ 62 35 10 0 4 2Delaware D+ 61 35 10 10 3 0New Mexico D+ 61 35 10 10 3 0South Carolina D+ 61 35 10 0 3 2Wisconsin D+ 61 35 10 10 3 0

Florida D 59 35 10 0 5 0Vermont D 55 35 0 0 3 2Wyoming D- 50 35 10 0 0 0Tennessee D- 49 35 0 0 3 0Alaska D- 47 35 0 0 3 2Connecticut F 39 0 10 10 5 0Iowa F 32 0 10 10 5 0Arkansas F 28 0 10 10 5 0West Virginia F 28 0 10 10 5 0Washington F 22 0 0 0 5 0Montana F 16 0 0 10 5 0New Hampshire F 7 0 0 0 0 1Idaho F 6 0 0 0 5 0North Dakota F 6 0 0 0 5 0Maine F 0 MUST BE A VENDOR TO ACCESS WEBSITE

Co



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Grades or the scorecard were deter-mined by assigning points or in-ormation included on (or in some

cases, linked to) a states transparency

website, or a government procurementwebsite that provides inormation on gov-ernment spending. (See Table 5 or a de-tailed description o the grading system.)

What we gradedOnly one website was graded or eachstate. I states had a transparency web-site, that site was graded. The Vermont

Department o Finance & Managementswebsite was graded as a transparency web-site because o breadth o inormation it

oered on government spending. I statesdid not have a transparency website, theirprocurement website was graded. Mainesprocurement website was not given any

credit because it is only accessible with avendor identifcation number.

The grades in this report reect thestatus o state transparency websites aso January 3, 2011, with the exception ocases in which state ofcials alerted us tooversights in our evaluation o the web-sites or changes that had been made to thewebsites prior to mid-February 2011. Inthese cases, U.S. PIRG Education Fundresearchers confrmed the presence o the

inormation pointed out by the state o-fcials and gave appropriate credit or thatinormation on our scorecard.

Appendix B: Methodology



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How we gradedThe researchers reviewed websites andcorresponded with state ofcials as ollows:

During January 2011 U.S.PIRG

Education Fund researchers evaluatedevery publicly accessible state transpar-ency website based on the criteria laidorth in Table 5.

In late January or early February 2011,state agencies administering transpar-ency websites were sent e-mails withour evaluation, and were asked toreview our evaluation or accuracy. Adeadline o February 14, 2011 was setor states to send comments.

Approximately one week ater theoriginal e-mail was sent to state agen-cies, a second e-mail was sent remind-ing ofcials to respond by the deadline.

Ater February 14, 2011, U.S.PIRGEducation Fund researchers reviewedthe state ofcials comments, ollowedup on alleged discrepancies, and madeadjustments to the scorecard accord-ingly. In some cases, website admin-

istrators misunderstood the gradingcriteria, or our review o the websiteound that the site lacked inorma-tion that state ofcials believed it had.In these cases, the website adminis-trator was sent an e-mail clariyingU.S.PIRG Education Funds gradingcriteria.

Calculating the gradesStates can receive a total o 100 points.Based on the points each state received,grades were assigned as ollows:

Score Grade

95 to 100 points A

90 to 94 points A-

87 to 89 points B+

83 to 86 points B

80 to 82 points B-

75 to 79 points C+

70 to 74 points C

65 to 69 points C-

60 to 64 points D+

55 to 59 points D

45 to 54 points D-

1 to 44 points or no site F

The point allocation changed rom the2010 report. Pluses and minuses were add-ed to the letter grades to more accuratelyreect where websites stand in relation tothe standards o Transparency 2.0. Thethreshold or a passing grade was loweredrom 50 to 45 to reect the importance omeeting the minimum criterion o havinga checkbook-level website.

When determining i a states transpar-ency site was checkbook-level, we as-sumed that, unless otherwise noted on thewebsite, any list o payments made to ven-dors was complete and comprehensive.

For quasi-public agencies, states wereawarded points either i they receivedpoints in U.S. PIRG Education Funds2010 Following the Money report (or whiche-mails were sent to the administrator owebsite, inquiring whether quasi-public

agencies were included), or i the admin-istrator responded that the site includedquasi-public agencies in e-mail inquiries

Appendix B 43


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Table 5: Description o Point Allocation or the Scorecard

Variable

Checkbook-LevelWebsite

Search byContractor

Search byActivity

Contract orSummaryInormation

Downloadable

Past Contracts

Inormation onTax Expenditures

Description

Detailed expenditure inormationthat allows one to view individualpayments made to vendors.

Ability to search expenditures bycontractor or vendor name.

Ability to search expenditures bytype o service or item purchased(either the website allows akeyword search, or provides a listo categories).

A copy o the contract is includedwith the expenditure entry, ordetailed summary inormation isprovided.

Inormation can be downloaded

or data analysis (via xls, csv, etc.)

Contracts and expenditures romprevious scal years are includedon the website.

The states tax expenditure reportis linked on the website.

MaximumNumberof Points

35

10

10

10

2

5

10

Partial Credit

No partial credit.

No partial credit.

No partial credit.

10 points i copies o all contracts areprovided.

5 points i copies o contracts romonly certain agencies or departmentsare provided.

5 points i a very detailed summaryo expenditure is provided. This couldinclude inormation such as thepurpose o the contract, the contracttype, contact inormation or thevendor, or outcome o the contract.

3 points i the kind o goods or servicesthe government received is provided.

No partial credit.

5 points i contracts prior to FiscalYear 2008 are included.

3 points i contracts rom Fiscal Year2008 are included.

Note: partial credit is additive acrossthe categories.

3 points or Accessibility 1 point ithe link to the tax expenditure reportis dicult to nd, 3 points i the link

to the tax expenditure report is easyto nd.3 points or History 0 points orproviding only the present yearstax expenditure report, 1 point orproviding a previous years report,3 points or providing a report rom2008 or prior.



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Variable

Inormation onTax Expenditures(continued romprevious page)

EconomicDevelopmentIncentives andGrants

Feedback

Quasi-PublicAgencies

ARRA FundingLinked

Local/CountyBudgets

Description

The states tax expenditure reportis linked on the website.

Economic developmentincentives and other grants tospecic recipients are included onthe website.

A link on the transparency websiteallows users to give eedback aboutthe site.

Expenditures rom quasi-publicagencies, such as transit authorities,are included on the website.

A link is provided to the stateswebsite that tracks unding rela

Documents

transparency report