Hawaii gets better marks for new online transparency system

By Malia Zimmerman | Watchdog.org

HONOLULU — Hawaii state government no longer is failing when it comes to spending transparency.

The U.S. Public Interest Research Group Education Fund’s new report “Following the Money 2014: How the 50 States Rate in Providing Online Access to Government Spending Data” gives Hawaii a “C” this year.

The government watchdog group called this a “huge improvement” for Hawaii, because in the past the state received an “F” grade, and disclosure is important for “democratic and effective government.”

“It is not possible to ensure that government spending decisions are fair and efficient unless information is publicly accessible,” said Phineas Baxandall, senior analyst with U.S. PIRG.

Hawaii’s grade shot up after the state Department of Budget and Finance created a new transparency website in January, which offered a “one-stop source” for Hawaii’s expenditure and financial information.

While Hawaii received the score for second most improved state, Indiana, Florida, Oregon, Florida, Texas, Massachusetts, Iowa, Vermont and Wisconsin were deemed the most transparent states.

Hawaii’s grade still could improve if the state discloses more about spending on economic development subsidies and expenditures outside of that made by state agencies.

State Deputy Finance Director Luis Salaveria, who worked on this transparency project, said the state Department of Budget and Finance is “actually very pleased” U.S. PIRG recognized Hawaii’s improvements in online fiscal transparency.

Salaveria pledged that Hawaii will continue to improve.

“Hawaii should be proud that we were noted as one of the states to make the most significant improvements, however, we have our goals set on making even more improvements over the next year that will further improve our current available information and further increase public transparency,” he said.

The states with top grades provide access to expenditures that otherwise receive little public scrutiny, such as checkbook-level data on the subsidies recipients got in each of the state’s economic development programs. States with top grades also provided details of expenditures made through quasi-public agencies, which in Hawaii would include agencies like the state hospital system and the Obamacare exchange, the Hawaii Health Connector.

“Rising public expectations about government transparency are clearly making progress,” said Greg LeRoy, executive director of Good Jobs First, an organization that tracks state and local subsidies. “U.S. PIRG’s findings about overall state spending transparency are consistent with our own specific findings about economic development subsidies. There is more data and its quality is improving. Now our collective challenge is to use the data to win more accountability and equity.”

State spending transparency is a nonpartisan issue, the organization said, noting “neither Republican nor Democratic states tended to have higher levels of spending disclosure.”

This week, another government watchdog group also noted Hawaii’s progress in fiscal transparency and reporting.

Truth in Accounting’s StateDataLab.org said Hawaii is now among the most improved states when it comes to timeliness for end-of-the-year financial reporting.

Hawaii’s financial reports were released notoriously late under Gov. Linda Lingle’s administration.

In 2009 and 2010, it took more than 400 days for Hawaii to distribute its end-of-the-year financial report. The Lingle administration blamed the state auditor, who had taken over some of the functions.

When Kalbert Young was appointed as the director of state Department of Budget and Finance under the Abercrombie adminstration, he vowed to change that record and become more timely and transparent in financial reporting.

Hawaii took 211 days to complete its financial reporting in 2013, compared with 400 days prior.

Young said the state’s Comprehensive Annual Financial Report is the most important piece of the report because credit agencies, investors of Hawaii bonds and the general public rely on that report for financial decisions.

Sheila Weinberg, founder of the Chicago-based Truth in Accounting, which tracks the reporting, said she was pleased to see the improvements.

“Citizens are expected to meet the April 15 deadline to file their federal income tax, 105 days after year-end. Businesses are expected to report results 90 days after fiscal year-end. We hope Hawaii continues to improve its reporting to meet or exceed the 180 day deadline,” she said.

Reach Malia Zimmerman at Malia@hawaiireporter.com