Now launched for public review: XBRL taxonomy for US local-government reporting
Routine digital reporting by local governments in the US just got a huge step closer. XBRL US and the University of Michigan’s Center for Local, State and Urban Policy (CLOSUP) have issued a ‘commercial-grade’ XBRL taxonomy for local-government reporting. The essential financial data reported by state and municipal governments is currently reported in PDF format – effectively ‘paper under glass’ – making it very difficult to access or use. The new taxonomy provides the digital definitions “that can be used to transform paper-based financial statements and footnotes into machine-readable data.”
The publication comes alongside a pilot project on enabling digital reporting in Flint, Michigan. It seeks to improve transparency on local government finances, enabling improved analysis and insight on the challenges of today. “Open data standards generate financial data that will help local entities respond faster, and have the information to make better policy decisions,” says Stephanie Leiser, CLOSUP’s Local Fiscal Health Project leader.
The taxonomy – which is designed to be easily transferable to other US states – supplies over 2,800 standardised, digital definitions for concepts that appear in government financial reports. It covers seven financial statements and four footnotes from the Annual Comprehensive Financial Report (ACFR), as required of local governments in the US, as well as two Michigan-specific reports required to be prepared by local entities. The core ACFR Taxonomy was developed by the XBRL US Standard Government Reporting Working Group, which is composed of municipal securities analysts, academics, research analysts, and tools providers. Applications for taxonomy development and review were contributed by CoreFiling, and XBRL creation tools were contributed by IRIS Business Services and Workiva.
An interesting comment piece from Marc Joffe, Chair of the Working Group and Senior Policy Analyst at the Reason Foundation, discusses some of the history, context and challenges to digitisation of local-government data. “Hopefully, progress on municipal financial transparency and reporting at the state level will overcome inertia at the national level,” with this creating pressure towards a digital transition, he says, “Should the Municipal Securities Rulemaking Board or the federal grants community decide to implement XBRL, the newly released University of Michigan taxonomy will give them a very strong starting point.”
A 60-day public review period on the taxonomy is now open, with comments due by 15 August 2022. Review materials include the taxonomy, available to access in an online viewer or in downloadable form as well as sample machine-readable financial reports, and instructions on how to review and participate.
We congratulate all those who have been involved in this substantial and significant taxonomy-development effort, and we join XBRL US in urging all stakeholders – including governments, standards setters, regulators and analysts – to provide their input in helping shape the digital future of local government reporting.