Although the private sector is quite familiar with digital reporting as mandated by the Securities and Exchange Commission (SEC) in 2008, the transition to machine-readable data such as the 10-K, 10-Q reports in XBRL formats still remains slow. However, with a recent law enacted in Florida, local government financial reporting looks set to change for the better.
Increased transparency in local government financial reporting
There are numerous benefits to electronic, machine-readable financial reports. For example, such reports allow invested stakeholders and analysts to easily access and analyze financial information.
Despite such advantages, local governments in the United States have continued to file their financial reports in PDF format. With some reports running into the hundreds of pages, anyone looking to analyze the financial performance of a local government, or wanting to assess the state of the municipal bond market, would face significant time and data constraints in order to do so.
Thankfully, these issues could be a thing of the past. In March 2018, a new law, HB 1073, was enacted in the state of Florida. The law states that from 2022, local government comprehensive annual financial reports (CAFRs) should be prepared in XBRL format, rather than be submitted as PDFs.
This should mean that Florida’s local government should produce much more standardized and easily accessible financial data and statistics, for a lower overall cost. What’s more, such a change should move local government financial reporting into the digital era, further aligning how public and private sector bodies report their financial data.
Putting XBRL taxonomy in place
As part of HR 1073, the Sunshine State’s Chief Financial Officer will have the authority to put XBRL taxonomy in place to assist in the financial reporting process for local government, and will also be involved in creating e-filing software for local governments.
There are a number of contributors behind the scenes who are working to ensure that the 2022 deadline is met. Among them is the State & Local Government Disclosure Modernization Working Group, which is organized by XBRL US. As part of its work within the group, DataTracks worked to process the CAFR of the city of St. Petersburg in iXBRL format and made their report available to other members of the working group.
While ultimately, the goal of the working group is to see the use of iXBRL reports rolled out beyond the borders of Florida to state and local governments throughout the U.S, in order to help standardize local and state government reporting and improve data analysis, there’s no denying that the introduction of HB 1073 in Florida marks a significant step forward in digital reporting in the public sector.
DataTracks is a member of XBRL US. DataTracks has over 13 years of experience in XBRL and iXBRL reporting and has processed over 50,000 iXBRL documents for clients across the world for a number of regulators, including the SEC, HMRC in the UK, and MCA in India. For more information, please email email@example.com or visit www.datatracks.com