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Danny Katz,
CoPIRG Foundation

New Report: Special Districts Too Often Fail to Show How They Spend Money

Denver Regional Transportation District a “Lagging District” for Spending Transparency
For Immediate Release

A new report found that many special districts across the country are failing to provide accessible, online, and comprehensive information about their spending. Special districts are created to provide specific services like fire protection, medical care, transportation and housing for a designated area that would otherwise typically be provided directly by a city, county or state. 

There were 2,392 special districts in Colorado in 2012 according to the U.S. Census Bureau, the fourth most of any state. Not every Colorado special district reports spending information to the U.S. Census Bureau but of the ones that did, they spent $4.8 billion in Colorado.  

The Denver Regional Transportation District (RTD) was one of 79 special districts analyzed in the report “Following the Money 2017: Governing in the Shadows,” released by Colorado Public Interest Research Group Foundation and the Frontier Group. RTD’s spending transparency was better than a majoirty of the districts analyzed, which earned “F” grades. 

In the report, Denver’s RTD earned points for having overall budget and financial information on their website but lost points for not having enough checkbook level spending information on their website or for having checkbook level spending information more easily searchable, downloadable and for a greater period of time. RTD earned a “D” meaning it was better than the majority of special districts analyzed but fell just short of the leaders. 

“Special districts are wide-ranging and could be fire departments, hospitals, toll roads, transit providers, wastewater management entities and housing authorities. They exist outside of traditional city, county and state governments and are intended to provide public services in a more efficient manner than they would be provided otherwise,” said Danny Katz, Director of CoPIRG Foundation. “But it’s hard to measure whether they are providing efficient and effective services, and to build public confidence and engagement without a high level of transparency about how they spend money, which often comes from taxpayers.” 

According to the report, technology allows for a high level of transparency for government spending. Therefore, to receive a good grade, special districts need to be comprehensive, one-stop, and one-click searchable and downloadable. This means the public should have access to a user-friendly web portal with budgets, financials and checkbook level information that you can search based on common categories, amounts, and spending recipients over at least a year as well as a way to access data that is downloadable. 

CoPIRG Foundation and Frontier Group have released a similar annual report grading states on the same transparency benchmarks since 2011. Many states failed in the earlier versions of the report but in last year’s release, Colorado earned an “A-“ for its portal joining 18 other “A” states.  

"Across a diverse array of budget sizes, function types and geographic service areas, what most of the special districts in our report have in common is their lack of financial transparency," says Rachel Cross of Frontier Group, co-author of the report. "And because special districts are the fastest growing form of local government in the country, what we don't know about them is also growing every day."

The report found only seven special districts that were reviewed had a detailed spending checkbook available online. These checkbooks allow citizens to see how their tax money is spent, dollar by dollar. Only thirty districts had their most recent budget available online.

While CoPIRG Foundation and Frontier Group were unable to do a comprehensive review of the estimated 2,392 special districts in Colorado, a basic review of others found none that would receive an “A” grade. Most lack checkbook level spending information though some do not even have their budgets and financials online. 

The report offers a series of recommendations to ensure that special districts aren’t left behind as state and city governments move towards greater transparency:

  • Special districts should prioritize establishing an online checkbook database of their spending. This could be as simple as an excel document, or could be as complex as uploading data to a database. However, it is checkbook level spending information that most informs how special districts operate, and can most efficiently decrease costs and waste and increase public confidence and engagement.
  • Colorado should consider opening their transparency portal to local governments and special districts. Some states have already begun to do this, allowing local government bodies to upload spending data to a pre-existing website. Other states have worked with special districts to help them become more transparent.
  • Colorado should establish clear and uniform financial reporting guidelines for all special districts that can most efficiently decrease costs and waste and increase public confidence and engagement

 

Helpful links:

Leading Special District spending website – Chicago Transit Authority

RTD’s website – budgets and financials and some monthly spending data

Colorado’s spending transparency portal – earned an A- in last year’s report

Colorado websites for special districts here and here – some have budget info but no checkbook level detail

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