States seek involvement in FDTA design
Transparency in the management of public finance & accountability is the need of the hour, addressed by the Financial Data Transparency Act (FDTA), passed into law in 2014. This law mandates all federal agencies to publish financial information in a standardized format that can be easily accessed and analyzed by the public. Because the implementation process is still ongoing, the Public Finance Network, a coalition representing US state and local governments, government entities, and issuers of municipal securities, has called for its members to be involved in the design process.
The Public Finance Network states that states and local governments are key stakeholders because they are the primary users of the federal fiscal data, making it imperative that they are involved in implementing the FDTA. By involving them in the design process, the network believes that the implementation of the law can be made more effective and efficient. The network has also pointed out that states and local governments have unique data needs that the federal government may not fully address.
– One of the key benefits of involving states and local governments in the FDTA design process is that it will enable them to provide input on the specific types of data they need to manage their finances effectively. For example, a city government may need data on infrastructure spending to plan for future maintenance and repair needs. In contrast, a state government may need data on healthcare spending to determine where to allocate resources for public health programs.
– Another benefit of involving states and local governments in the FDTA design process is that it will help ensure that the law’s implementation is consistent with existing state and local financial reporting requirements. By working together, federal agencies and state and local governments can develop a reporting framework that meets the needs of all stakeholders, thereby avoiding duplication of effort.
– Overall, the Public Finance Network’s request for involvement in the FDTA design process highlights the need for collaboration between federal, state, and local governments to manage public finances. By working together, all these stakeholders can ensure that the implementation of the FDTA is effective and efficient. Ultimately, the law aims to increase transparency and accountability in public finance management.
– Additionally, states and local governments can play a crucial role in ensuring accurate and up-to-date data. This is because many state and local governments are primarily responsible for collecting and reporting financial data to federal agencies. By involving them in the design process, federal agencies can work with state and local governments to develop reporting standards and processes that will produce effective & productive results.
However, this process will not be devoid of challenges. One of the biggest challenges posed by the involvement of state & local governments is the issue of resources. Many state and local governments may lack the resources or expertise to actively participate in building the design. This can create a power imbalance between federal agencies and state and local governments, which could ultimately undermine the efficacy of the law.
To address this issue, federal agencies might need to provide additional resources and support to state and local governments as they participate in the design process. This could include providing technical assistance, training, and funding to help state and local governments develop the expertise and capacity needed to provide meaningful input into the design process.
Without the full knowledge of the workings of the public sector financial reporting at the beginning of the process, it is impossible to proceed further without giving rise to unnecessary confusion, burdens, and costs for members upon implementation. It is imperative that the members engage in ongoing dialogues and participate in industry working groups. The Public Finance Network’s call for involvement in the FDTA design process is a timely and necessary step toward ensuring the effective implementation of the law.
Our previous article, “What are the latest updates about Financial Data Transparency Act?” discusses the final provision of the Act, the regulatory agencies covered under the FDTA, like SEC, FDIC, OCC, and CFPB, to name a few & finally the implications of the Act if it is implemented, at length.