Report: Vermont among worst states when it comes to fiscal transparency

By Bethany Blankley |

More than one third of state governments are doing a good job with fiscal transparency, a new report released by the nonpartisan, nonprofit Truth in Accounting (TIA) indicates. The report, which evaluated the transparency of state government finances, found the remaining two-thirds in need of improvements.

To encourage the publication of transparent and accurate government financial information, TIA created a “Financial Transparency Score” for financial reporting. It evaluates several factors ranging from whether a state used an independent auditor to examine its annual financial report to how accessible reports are online.

The 10 states with the least fiscal transparency are Missouri, Louisiana, Nebraska, Rhode Island, Vermont, Massachusetts, Montana, Arkansas, New Mexico and Connecticut.

“One of the factors we track is the timeliness of state financial reporting,” TIA’s director or research Bill Bergman told “Truthful financial reporting includes timely financial reporting, and states vary widely in how soon they deliver audited financial results to their citizens – and to legislators and governors developing budgets.”

The Chicago-based organization was founded in 2002 to “compel governments to produce financial reports that are understandable, reliable, transparent and correct.”

No state earned a perfect score of 100. However, 19 states scored well on a curved grade, receiving As with scores between 80 and 85. Utah earned an 85, the highest score. Twenty-one states received Bs; three states received Cs; six received Ds. Connecticut received the lowest failing grade of 44, less than half of Utah’s grade.

The top 10 states with the most fiscal transparency, according to Truth in Accounting, are Utah, Washington, West Virginia, Virginia, South Dakota, Idaho, North Dakota, Alaska, Georgia and Indiana.

The 10 states with the least fiscal transparency are Missouri, Louisiana, Nebraska, Rhode Island, Vermont, Massachusetts, Montana, Arkansas, New Mexico and Connecticut.

“While there is a great deal of focus on state governments’ budgets, the results of those budgets are found in a government’s comprehensive annual financial report (CAFR),” TIA notes. The CAFR is produced annually and is audited by a certified public accountant.

To receive a score of 100, TIA suggests that governments follow a best practices guideline, which includes certain criteria for their CAFR. TIA states that CAFR must be easily accessible online, with useful links from the table of contents and bookmarks.

It must also be audited by and receive a clean opinion from an independent auditor who is not an employee of the government, meaning “the auditors found the financial statements included in the annual report fairly and accurately present the government’s financial condition.”

TIA’s analysis found that all 50 states produced CAFRs that are in a searchable PDF format; 46 states received a clean opinion.

Louisiana, Missouri and Nebraska received qualified opinions, meaning the auditors found the financial statements were fairly presented, except for a few specified issues. New Mexico received a disclaimer of opinion, meaning “it in essence flunked its audit.”

State governments should report all retirement liabilities on their balance sheets, including a net pension liability measured on the same date as the CAFR that is “not distorted by misleading and confusing deferred items,” TIA argues.

TIA found that states did not report their current pension liability amounts. All but three states used June 30, 2016, figures in their fiscal 2017 annual reports. The other three states used amounts from different valuation dates. Colorado, for example, calculated its pension liability using data dated Dec. 31, 2016, for the state’s fiscal year ending June 30, 2017.

No state accurately reported its net position, TIA reports. Instead, they “used confusing accounts called deferred outflows and inflows.”

“Surprisingly, only 15 states used outside certified public accounting (CPA) firms to audit the state CAFR,” the report notes. “The other states used auditors who work for the state, which brings into question their ability to provide an independent opinion.”

Image courtesy of Public domain

5 thoughts on “Report: Vermont among worst states when it comes to fiscal transparency

  1. When it comes to lack of transparency, this has especially been the case in energy programs.

    “Ousted official backs up anonymous claims that state mishandled GMP rate case”
    The “policy objectives” were not spelled out in the VTDigger article. What kind of “digging” is that?
    GMP and DPS work together on expensive pet RE projects.
    The high cost of these projects is added to the rate base.
    The costs of the programs remained hidden, because all was decided behind closed doors. The public was not invited.
    Expert witnesses were not heard, and/or their testimony left out of reports
    They likely involve microgrids, and islanding, and solar systems, and Tesla batteries, and heat pumps
    When all was settled behind closed doors, DPS sent their recommendation to the PUC, which held minimal hearings before approving the likely excessive rate increase.

    The CEP projects the capital cost, as estimated by Energy Action Network, to be at least $33 billion by 2050, or about one billion dollars per year, or about 6 to 7 times greater than current annual RE investments in Vermont. See page 65 of CEP and URL.
    Vermont is planning to impose a unilateral carbon tax to raise about $500 million per year to implement the CEP.
    Mostly Democrat politicians would create lots of government energy programs that would dole out money to their favored groups, which would be thankful, and vote Democrat forever.
    The carbon tax has absolutely nothing to do with GW. Vermont could disappear, and whatever went on still would go on.
    The carbon tax would set in motion the mother of all government boondoggles that would last for decades.
    Vermont’s way of life would become unrecognizable.
    The regimentation and coercion would be off the charts, all as determined by a nameless bureaucracy.
    Vermonters have been subjected to about 15 years of expensive government energy programs, allegedly “to save the world, make a difference”, but in reality to get to as many federal and state subsidies for RE programs as possible.
    Did CO2 emissions decrease? No the opposite happened!
    Increasing emissions of CO2, from 1990 to 2015 (latest numbers), proved their ineffectiveness.
    With such a dismal record, the state should get out of the energy business.

    VPIRG, a booster of renewable energy, mostly financed by Vermont RE businesses, estimated the annual household savings of a heat pump at $1000 to $1500 on a $3000 heating bill. It appears, VPIRG grabbed a number out of the air, because it looked good.
    Efficiency Vermont, a taxpayer-financed, quasi-government entity, had a “fact sheet” (no longer available on its website) with $1842/y of savings (not only is such accuracy astounding, but it proved (after field tests) to be grossly overestimated.
    I wonder what other savings EV has over estimated to justify its existence and huge budget for over 20 years.
    After many complaints by duped households that spent up to $10,000 for heat pump systems, VT-DPS belatedly performed a survey of actual heat pump installations and their performance.
    – The DPS study found the seasonal average COP of the surveyed households was 1.2, which is dismal; not the 2.5 – 2.7 that is often bandied about.
    – The average energy saving was $200/y, which is grossly less than advertised; not the $1000 to $1842 per year, according to the websites of VPIRG and EV.
    NOTE: Now these households have two heating systems, one for when it is not so cold, and one for when it is cold. These systems have an annual owning and maintenance cost during their 15 to 20 year life. The $200/y energy saving would not even make a small dent in those annual costs, all that courtesy of state incompetence and conniving with RE boosters to “save the world”.
    Over eager contractors installing heat pumps in houses that were completely unsuitable for them.
    The state should get out of the energy business. Make sure to read the VT-DPS report. It is an eye opener.

  2. Nothing to See Here, Move Along (Taxpaying) Chumps !

    No Transparency,
    Hostile Business Environment,
    Worst State for Veterans to Retire in,
    High Property Taxes.
    Income Tax on Social Security,
    6% (or more) Sales Tax
    9% (or more) Rooms and Meals Tax,
    Costly Motor Vehicle Registration Fees,
    Inheritance Tax and
    Fees, Fees, Fees,
    in the “Land of Endless Taxes” nothing is off limits and the Legislature and the Treasurer seem to see nothing wrong with keeping it all a big secret !

  3. Or any transparency.

    Obfuscation, based on fuzzy thinking, is the motto

    The main reason is bureaucrats are afraid of their own shadow.

    Do not ever stick your neck out.

    Reveal nothing so they can never pin something on you.

    Chime in/agree as needed to protect job and retirement security.

  4. From a general reading it seems the majority of those with higher grades were mostly Conservative, while those failing were mostly Liberal.Those not on the lists apparently could be categorized similarly.

    What is there to hide?

  5. Guess our state treasurer doesn’t want Vermonters to know the truth about the state’s real pension liabilities. Bummer!

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