trust but verify: open government is better government

8/14/2019 Trust But Verify: Open government is better government

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Trust But VerifyOpen Government Is Better Governmen

Joseph ColettiDeCember2009

P O L I C Y R E P O R T

NC Transparency


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trust but verify | open government is better government

p o l i c y r e p o r t

Trust But VerifyOpen government is better government

Joe Coletti

December2009

Table of Contents

2 Executive Summary

4 Financial Transparency

8 Process Transparency

11 Regulatory Transparency

14 Conclusion

14 Notes

The views expressed in this report are solely those o the author and do not necessarily refect those o the sta orboard o the John Locke Foundation. For more inormation, call 919-828-3876 or visit www.JohnLocke.org.2009 by the John Locke Foundation.


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J o h n l o c k e f o u n d a ti o n


Executive Summary

Governments have been seeking ways to adopt oradvertise their eorts at open government, sun-shine, and transparency. Recent history is rie, how-ever, with examples o how they have ailed suchas Gov. Mike Easleys nancial dealings and the holein the state health plan.

Open government helps build trust with tax-payers. Tools that improve openness with taxpayershave also helped government ocials and manag-ers better use their resources. Some state and local

governments ound ways to save money throughimproved transparency.

Financial transparencyis an important step to-ward open government. Online budgets, contracts,salaries, and check registers make inormation moreaccessible. Corporate nancial statements providea model in clarity and accessibility. Too many gov-ernment documents are not searchable in any way.When tied to outcome measures such as test scoresin education, this greater accessibility can provide

better insight about which government programswork and which ones do not.

Process transparency opens the closed doorselected ocials try to hide behind when dratinglaws. Putting bills online 72 hours beore debateand voting begin, instead o in the middle o thenight the day o a vote, would leave ewer surprisesin legislation. Five-year scal projections or stateand local budgets would also make clear the impactso program changes over time, not just or the year

or two a budget is in eect. Governments shouldalso take urther steps to publicize their meetingsbeorehand, record their proceedings, and makeminutes or archived recordings available online.

Regulatory transparency means making theproceedings o non-elected bodies as open as thoseo the legislature, county commissions, and towncouncils. Proposed regulations should be easier tond and understand or those with an interest. Thestate auditor or an independent body should per-

orm any audits or perormance reviews. Reviewsshould cover not just how well an agency or pro-gram accomplishes its mission, but also whether themission is appropriate or government.

Why Transparency MattersOpen government is needed or a healthy democ-racy. Yet much o how government operates is un-known. Carolina Journalrst reported on Gov. Eas-leys nancial dealings in 2006,1 but it took until Bev

Perdue took oce and opened state police recordsor details to emerge.2 The state spent as much as$226 million in excess cost or mental health ser-vices over three years. It took months or the coststo become large enough to gain attention and theull extent o the problem was not realized until thelegislatures Program Evaluation Division presentedits ndings in July 2009.3 The $250 million holeor 2009 in the state health plan also caught legisla-tors by surprise.4


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Open government builds trust and improvesgovernment operations. It can even save money,as witnessed in Texas, where the state comptrolleround $73,000 dollars in savings just through cut-

ting the number o contracts or toner cartridges.

There are many acets o open government.The John Locke Foundation created the web siteNCTransparency.com to improve online scal trans-parency, and the response rom local governmentshas been very promising. The Greensboro News &Recordcomplained that Guilord County commis-sioners work behind closed doors too much. Guil-ord is not alone. Few governments broadcast theirmeetings online or on television. Fewer still post

proposed ordinances, rule changes, or even agendasonline in advance o their meetings. Open contract-ing with competitive bidding is another essential el-ement o open government.

Making inormation accessible is about morethan making it available. Citizens need to be ableto understand it. Elected and unelected ocialsneed to change their approach to inormation. Itis not simply about responding to citizen requestsor inormation. The problem is that government

documents are oten dicult to understand even

or those who use them on a daily basis. Is it anywonder that ew citizens ask or budget inorma-tion when that inormation comes in a orm that isalmost unintelligible?

Asheville, or example, has its budget availablein twelve sections plus a glossary. Wake CountyCommissioner Stan Norwalk voted against puttinginormation online because he worried about boththe cost o putting data online and the eect oncounty employees who would be bombarded withso many requests or inormation that they willspend too much time dealing with rivolous inqui-ries.5

The answer, however, is neither to avoid makingthe inormation available nor just to put it online inany ormat. The answer is to present the inorma-tion online in a way that can be easily understood.

The remainder o this paper will examine thethree aspects o open government scal transpar-ency, process transparency, and regulatory transpar-ency. Each section will provide examples o whattransparency means in that area, steps governmentsare taking to become more transparent, and oppor-

tunities to improve transparency.


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ncstimuluswatch.com, among others) have put thedata in searchable tables or maps that acilitatetracking where the money has gone (see Figure 2).

Financial transparency is important or thevery reasons Jeerson stated two centuries ago.Governments operate on money. I it is dicult tounderstand how that money is spent and to whatend, then there is no way to control it. For those

reasons, the John Locke Foundations open govern-ment web site, NCTransparency.com, ocuses rston nancial transparency. In order to maintain thesupport o their citizens and taxpayers, govern-ments at all levels must be able to demonstratecost-eective results.

Some examples o how transparency hashighlighted excessive costs and led to actions thathelped improve results may be instructive. In Texasthe state comptroller used transparency to save 36percent o the $10.5 million the state was spend-

ing in overnight and express mail service costs.The state also expects to save $5.7 million on feetvehicles through negotiations, which will includeother costs o ownership besides the purchase price costs that could have been hidden.6

North Carolina state agencies, meanwhile,paid millions o dollars in mileage charges orparked vehicles in part because they did not sub-mit reports on time.7 Transparency eorts wouldmake these situations obvious to managers beore

Financial TransparencyGovernment nances in North Carolina do notbegin to approach the level o Jeersonian clar-ity. Spending is spread among a number o specialunds in addition to the general und. Intergovern-mental transers are sometimes counted as revenue,sometimes counted as spending cuts, and some-

times are considered o budget within the samebudget document.Compare the nancial statements or the

$40 billion enterprise o state government withthose o the Target Corporation with $65 billionin revenue. Where public companies make theirannual nancial reports available in searchablePDFs, the states nancial statements are scannedPDFs that cannot be searched or analyzed. Thepublic companies show at least two years worth onancial inormation to provide some context or

the numbers. The government only provides thecurrent year. Public companies are transparent tomeet government regulations and investor de-mands. The government itsel aces neither marketnor regulatory pressures (see Figure 1).

In some states, third-party providers orexample,MaineOpenGov.org have taken rawgovernment data and created easily understand-able graphs o spending. Web sites that report onstimulus projects (ncrecovery.gov, recovery.org, and

We might hope to see the nances of the Unionas clear and intelligible as a merchants books,

so that every member of Congress and everyman of any mind in the Union should be able

to comprehend them, to investigate abuses, andconsequently to control them.

Thomas Jeerson


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Corporate numbers can be copied into other programs and analyzed ...

... but state numbers are in a picture fle and have to be re-entered by hand.

Figure 1.

Corporate data selected, copied, then pasted into a spreadsheet or analysis.


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-

Figure 2.

Inormation on the stimulus bill is relatively well presentedon government and third-party sites.

MaineOpenGov.org provides easy-to-understand graphs o government data.


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they wound up making the evening news.Managers in government need the tools to

run their agencies eciently. Taxpayers need thetools to determine how their tax dollars are being

used. Requests or inormation are inecient andriddled with opportunities or misunderstand-ing. Financial transparency should be a priorityor governments. As they try to provide essentialservices in an uncertain economy, elected ocialsneed the insights o proessional sta in the execu-tive branch, o taxpayers with particular exper-tise, and o vendors who can provide products orservices in a more cost-eective way. Transparencyopens the books to all three groups, increasing thelikelihood that someone will nd a way to make aprogram more ecient or nd a program that doesnot achieve its objectives.

In education and other areas, results can bequantied and measured against the cost o pro-

grams. The John Locke Foundation took a step inthat direction with its report on Taxpayer Returnon Investment in 2008.8 Four-year graduationrates and standardized test scores are better mea-

sures o the value taxpayers get or their educationdollars than student/teacher ratios. A reason-able intermediary measure would be the share ospending that goes to the classroom. Making theseimproved measures available to parents, teach-ers, principals, other sta, school board members,and county commissioners would shine a light onwhat actually works to educate a child. Success-ul eorts, once recognized, could be more easilyreplicated.

Even when tied to results, scal transparency isnot enough because it looks backward to decisionsthat have already been made. Government mustalso be more open in its decision-making processso it can improve uture decisions.


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o spending and tax provisions. Such projectionsare sometimes done or sections o the budget andrequently or other bills, but almost never or theentire budget. Worse, budget debates largely ocus

on changes rom the baseline spending projection,which includes a actor or growth; they rarely iever ocus on the previous years spending.

For scal year 2010, the baseline was $22billion, a three percent increase rom the previousyears budgeted appropriations, but 12 percentmore than actual appropriations o $19.65 bil-lion. Most commentary on the budget ocusedon a claimed $3 billion in cuts rom the baseline,instead o the $750 million increase in appropria-tions above what was spent in the 2009 budgetyear or the rest o the $20.4 billion appropriated,including ederal unds.

There is also no larger debate about whetherprograms are eective. Legislators, the media, andcitizens deserve a ull accounting o the ull pro-posal to spend $20 billion in state unds. A sectiono the proposed budget or 2010, stripped out othe nal bill, would have done that by requiringstate agencies to prioritize every dollar o theirspending, not just the last ten percent.

Process TransparencyC-SPAN was a tremendous step orward in open-ing the national policymaking process to taxpayers

and voters. Proposed bills or ordinances shouldbe made available online or at least 72 hoursbeore debate begins, not in the middle o thenight beore a vote is taken as was the case withthe North Carolina state budget in August 2009.Debates and important committee hearings shouldbe conducted in public and available online. Andvotes should be in public with a way to compare alegislators recorded votes across bills. North Caro-lina state and local governments have inconsistentrecords on these items.

The lack o transparency has been an issue inthe state budget and in ederal health care legisla-tion. In reerence to the original 1,000-plus-pageHR3200, Rep. John Conyers, a Michigan Demo-crat, asked incredulously, What good is read-ing the bill i its a thousand pages and you donthave two days and two lawyers to nd out what itmeans ater you read the bill?9

North Carolina state budgets do not provideadequate inormation on the long-term impact

When Im elected president youre going to seethis healthcare legislation written in the open.

Its going to be on C-SPAN, and youll be ableto see all the dierent people arguing to see

whether theyre on your side or theyre on theside of the drug companies and the insurancecompanies and so on. But youll be able to see

that process on C-SPAN. Barack Obama


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The web site or the North Carolina General Assembly does a good job oadvertising and providing audio eeds rom public meetings.

Calendar on Home Page

Chamber Audio - House Archived

RSS Feeds for Calendars

Figure 3.


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Upcoming meetings in Morrisville areprominently displayed on the towns

home page, but Carys are only availablethrough a graphic buried on the second

screen o its home page.

Figure 4.

What debate does occur on the budget or

other issues should be done in public, not behindclosed doors. Such closed-door meetings are soengrained in the General Assembly that duringhis 2008 gubernatorial campaign ormer TreasurerRichard Moore vowed to end meetings in the in-amous Room 61210 where a handul o legislatorsnegotiate the nal state budget. Those secretivenegotiations continue there under Gov. Perdue.

In addition to being held in public, meetingsshould also be prominently advertised beorehandin every communication platorm available to the

government entity. The North Carolina GeneralAssembly does this well. Its home page providesa list o upcoming meetings, those interested candownload a ull calendar or each chamber o thelegislature, and individuals can also sign up oremail alerts or specic committees or all o them.The calendars are also available or subscription inRSS eeds, although they still require downloadinga separate PDF or details. Audio rom each cham-

ber and rom the public nance and appropria-

tions committee rooms is also available throughthe web site (see Figure 3).While the General Assembly oten provides

ample notice o committee meetings, it is lessprocient at posting agendas ahead o time orat archiving debates and minutes. Local govern-ments, which have generally been even less openabout upcoming events or opening meetings, havebeen better than the state at making inormationavailable ater the act (see Figure 4).

New programs also need to be held responsible

or their stated objectives with sunset provisionswhen applicable. I a program ails to deliver thepromised outcomes, the legislative body whethertown council, county commission, or state leg-islature should reorm it or abandon it. Con-tracted services also should be bid in the open withrequests or proposal that are broad enough toallow more than a single company to qualiy as acontractor.


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Regulatory TransparencyGiven the amount o fexibility executive branchagencies and local government proessional stahave in crating the details o laws and ordinances,regulations also need to be more open to publicscrutiny. This applies to the creation o new regu-lations, their review, and their availability to thepublic once they are created.

Regulatory agency web sites are dicult to de-cipher and too complicated to be used by all but aew people who have experience or time to search.Agencies sometimes lose common sense when theymake inormation available to the public, not justwhen they create regulations. At the national level,OpenRegs.com has taken steps to open the regula-tory black box (see Figure 5).

Proposed zoning changes, when they are madepublic, are also hard to decipher. Why wouldanyone living in Raleigh think to look at Z-003-10 unless they already knew about the case? Fewsupporters o zoning changes or new developmentwill make the eort. Opponents will sometimes

organize, such as those in the High House and Da-vis Drive section o Cary, where residents ailed tostop a development but subsequently helped deeatthe mayor and incumbent town council members.On the other hand, those being involuntarilyannexed, such as those in Monkey Junction whowere absorbed into the city o Wilmington,11 arequite aware o the additional costs they will bearrom a larger government presence.

Maps and architectural renderings are onlysporadically available online, though physical

Those who advocate more and more governmentregulation have been experimenting for 40

years, trying to create an economic system inwhich everyone can somehow be made more

prosperous by the toil of someone else. Ronald Reagan

If you have ten thousand regulations you

destroy all respect for the law. Winston Churchill

The problem is that agencies sometimeslose sight of common sense as they create

regulations.

Fred Thompson


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Figure 5.

The North Carolina Utilities Commission dockets are difcult to decipher or search.OpenRegs.com makes ederal regulations easier to navigate.

documents are held at city hall. In the real estatemarket, sites such as Padmapper have overlaidapartment advertisements rom Craigslist and

other sources on Google Maps, making the onlineapartment shopping process simpler and morevisual12 (see Figure 6). Similar steps could be takenwith zoning so residents (and planning and zoningcommission members) can have a quick overviewo where development is planned.

Elected ocials have abdicated their role asrepresentatives or their constituents by passingbills and ordinances that grant excessive fexibilityto government sta. They exponentially increase

the work o citizens and advocates who must notonly pay attention to a bill as it goes throughlegislative deliberations once, but then must trackevery uture action o the proessional sta as thelegislation is implemented and the regulations arepromulgated.

Independent eectiveness reviews, perormedby an independent state auditor, program evalua-tion division, or nongovernmental entity, are im-portant additional steps in regulatory transparency.Reviews that simply ask about the negative eects

o a programs disappearance, without also prob-ing whether the purported benets actually exist,can mislead decision-makers. North Carolina has

both an independent state auditor and a programevaluation division, but the auditors oce rarelyasks the undamental questions about a programspurpose, and the program evaluation divisionsscope o work is dictated by the legislature, whichlimits its ability to examine questionable programs.

An example o a biased review, however, is thestates 2008 continuation review o Juvenile CrimePrevention Councils. The agency responsible orthe councils completed the review, made unproven

assertions about their eectiveness, and spundisaster tales i the councils disappeared.13 Fundingwas extended in the budget,14 which passed shortlybeore the state auditor issued a report citing po-tential conficts o interest in the programs grantdistribution procedures.15

Ultimately, state agencies and their subunits(and local government departments) must developmission and vision statements tied to measurableoutcomes, not inputs. I regulations do not achievethe objectives claimed, they should be open to


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repeal. For example, certicate o need regulations

do nothing to improve the health o North Caro-linians. To the extent they reduce costs, they doso only by osetting other regulations that distortprices in health care.16 Research suggests, however,that eliminating certicate o need would notincrease costs.17

A case in which a public agency ocuses on itsmission more than its size can be ound in Wash-ington, D.C. Michelle Rhee, the Districts chan-cellor o public schools, has made it a priority to

educate students in the nations capital, whether intraditional public schools with union teachers or

in charter schools that are outside her regulatory

purview.18Explicit, outcome-based mission and vision

statements that are publicly available in every com-munication ormat would connect transparencyand accountability in a undamental way or tax-payers, voters, government employees, and electedocials. It would acilitate Gov. Perdues BudgetReorm and Accountability Commissions (BRAC)work by giving commission members objectivestandards against which to measure government

activities. Accountability is, ater all, the reason ortransparency in any dimension.

Figure 6.

Padmapper combines structured data rom Craigslist and other apartment sites withGoogle Maps to make apartment hunting easier.


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ConclusionGovernment at all levels needs to be more

open and accountable to voters and taxpayers.

Greater accountability depends in part on be-ing more open about how government spends itsmoney and what it gets or that spending. TheJohn Locke Foundation has emphasized nancialtransparency at NCTransparency.com. Local govern-ments have put more emphasis on process trans-parency. Improvements are needed in both areas aswell as in regulatory transparency i government isto regain trust.

Notes1. Don Carrington, Easley Got Pricey Lot atBargain Rate, Carolina Journal, April 27, 2006, www.carolinajournal.com/articles/display_story.html?id=3271.

2. Andrew Curliss, Easleys secret fights skirted thelaw, The News & Observer(Raleigh), May 9, 2009, www.newsobserver.com/news/local_state/story/89688.html.

3. Mark Johnson, Excess mental health costs: $226 m,Under the Dome blog oThe News & Observer, July 6, 2009,

projects.newsobserver.com/under_the_dome/excess_mental_health_costs_226_m.

4. State health plan decit balloons, WRAL, July 15,2008, www.wral.com/news/local/politics/story/3211843.

5. Michael Biesecker, Wake lets anyone be a watchdog,The News & Observer, July 8, 2009, www.newsobserver.com/

politics/story/65374.html.

6. Texas Grades State Agencies and Local Governmentson Financial Transparency, Government Technology,December 5, 2008, www.govtech.com/gt/articles/568381.

7. N.C. pays millions or state vehicles to sit parked,WRAL, November 9, 2009, www.wral.com/news/local/wral_investigates/story/6379682.

8. Joseph Coletti, Taxpayers Return on Investment:North Carolinians get little value or their tax dollars, JohnLocke Foundation SpotlightNo. 359, September 23, 2008,www.johnlocke.org/spotlights/display_story.html?id=210.

9. Nicholas Ballasy, Conyers Sees No Point in MembersReading 1,000-Page Health Care Bill Unless They Have2 Lawyers to Interpret It or Them, CNSNews.com, July 27,2009, www.cnsnews.com/news/article/51610.

10. Richard Moore, Real Budget Reorm or NorthCarolina, www.richardmoore.org/images/realbudgetreorm.pd.

11. Hal Young, Wilmington Approves ControversialMonkey Junction Annexation, Carolina Journal, June 5,2009, www.carolinajournal.com/exclusives/display_exclusive.html?id=5464.

12. Q.v. www.padmapper.com.

13. Juvenile Crime Prevention Council ContinuationReview, North Carolina Department o Juvenile Justiceand Delinquency Prevention, February 2008, www.ncdjjdp.org/news/2008/ebruary/jcpc_cr.html.

14. Joint Conerence Committee Report on theContinuation, Expansion, and Capital Budgets: House Bill2436, July 3, 2008.

15. Oversight o Juvenile Crime Prevention Council-Funded Programs, PER-2008-7234, North Carolina Oceo the State Auditor, July 2008.

16. Roy Cordato, Certicate-o-Need Laws: Its Timeor Repeal, John Locke FoundationMacon SeriesPaper,November 28, 2005, www.johnlocke.org/policy_reports/display_story.html?id=62.

17. FTC press release, March 14, 1989, www.tc.gov/opa/predawn/F89/nc-con.txt, and Patrick John McGinley,Beyond Healthcare Reorm: Reconsidering Certicate-o-Need Laws in a Managed Competition System, FloridaState University Law Review, Vol. 23, No. 1, 1995.

18. Evan Thomas, Eve Conant, and Pat Wingert, Anunlikely gambler, Newsweek, August 23, 2008, www.newsweek.com/id/154901.


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About the AuthorJoseph Coletti is policy analyst or the John Locke Foundations transparency initiative, includingNCTransparency.com. He has reviewed best practices on transparency in other states and within NorthCarolina. His writing has appeared in state and national publications. He has presented to national pol-icy organizations and been interviewed on radio and television stations across the state. Prior to joiningthe John Locke Foundation, Coletti worked in the automotive industry and handled policy and commu-nications or an international trade association. He received degrees rom the University o Michigan andthe Johns Hopkins University.

About the John Locke FoundationThe John Locke Foundation is a nonprot, nonpartisan policy institute based in Raleigh. Its mission isto develop and promote solutions to the states most critical challenges. The Locke Foundation seeks totransorm state and local government through the principles o competition, innovation, personal ree-dom, and personal responsibility in order to strike a better balance between the public sector and privateinstitutions o amily, aith, community, and enterprise.

To pursue these goals, the Locke Foundation operates a number o programs and services to provideinormation and observations to legislators, policymakers, business executives, citizen activists, civic andcommunity leaders, and the news media. These services and programs include the oundations monthlynewspaper, Carolina Journal; its daily news service, CarolinaJournal.com; its weekly e-newsletter, Caro-lina Journal Weekly Report; its quarterly newsletter, The Locke Letter; and regular events, conerences,and research reports on important topics acing state and local governments.

The Foundation is a 501(c)(3) public charity, tax-exempt education oundation and is unded solelyrom voluntary contributions rom individuals, corporations, and charitable oundations. It was oundedin 1990. For more inormation, visit www.JohnLocke.org.


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To prejudge other mens notions

before we have looked into them

is not to show their darkness

but to put out our own eyes.

JOHN LOCKE (1632-1704)

Author, Two Treatises of Governmentand

Fundamental Constitutions of Carolina

John Locke Foundat

200 West Morgan St.

Raleigh, NC 27601

V: 919-828-3876

F: 919-821-5117

trust but verify: open government is better government

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