XBRL US, the national consortium for the business reporting standard, has created a State and Local Government Disclosure Modernization Working Group, which is focused on using standards to improve the efficiency of data collection and analysis concerning the financial performance of governmental entities.
XBRL says that the group will work on improving government financial transparency, enhancing the efficiency of the municipal bond market, and aiding efforts to streamline regulatory reporting, including grant reporting.
One of the catalysts for the formation of the working group was the signing of Florida legislation, HB 1073 which establishes the Florida Open Financial Statement System, and enables the state CFO to build XBRL taxonomies for state, county, municipal, and special district financial filings. Florida’s new system could serve as a proof-of-concept for the use of XBRL style reporting at the state level. XBRL has already been successful in establishing a federal standard through the Digital Accountability and Transparency Act of 2014.
Several cities and states already push some financial data through open data portals, however, the portals are designed to work with financial reporting that is already compiled. The addition of XBRL or other taxonomy standard would arguably make compiling reports easier and more consistent nationwide, which could also cut down on functionality gaps across open data portals for users that might be trying to compare information or gather national insights.
“Thousands of state and local governments produce data-intensive financial reports that are handled today through a largely manual process. Financial data standards that enable automation can free the data from these documents, increasing the timeliness and quality of reported data, and reducing the cost of data processing,” said Campbell Pryde, CEO of XBRL US.
The Working Group intends to build data standards for Comprehensive Annual Financial Reports (CAFRs), Single Audit packages, state-mandated Annual Financial Reports (AFRs), and responses to relevant Census Bureau financial surveys. Standards proposed by the group will implement existing accounting standards issued by the Governmental Accounting Standards Board (GASB) to help streamline financial reporting for US state and local governments, as well as public pension systems.
Private sector and academic members of the new working group include Certent; DataTracks; EZ-XBRL; Intrinio; IRIS Business Services LLC; Lehigh University; Merrill Corporation; Middle Tennessee State University; Northern Illinois University; Novaworks LLC; the Reason Foundation; Broadridge Financial Solutions; Thales Consulting; University of Maryland, College Park; University of Southern Florida; and Workiva.