“ “Sunlight is the best disinfectant.” – Louis Brandeis U.S. Supreme Court Justice
The government debt crisis is the equivalent of the recent Wall Street Financial Crisis and the biggest issue on the minds of Maryland CPAs.
If that is true, then doesn't it stand to reason that the “solutions” could also be the same?
We think the answer starts with radical transparency, followed by accountability. You get that by giving access to the numbers or as CPAs we like to say, follow the money.
Back in the thick of the Wall Street financial crisis, Dan Roth writing for Wired Magazine ran an excellent piece, titled, Road Map for Financial Recovery: Radical Transparency Now. David Stephenson followed up with a post in the Huffington Post titled, Recovery.gov: The First Step Toward Smart Regulation. The solutions were essentially the same, use XBRL to standardize and tag the data to give it context and meaning and then set the data free for the public to access and analyze. Imagine how many ideas to reduce wasteful spending would come form that?
This is already being done at the SEC level for all public companies. It is being done by the FDIC for bank call reporting. It is a great first step. But what about government? and government spending?
To use Dan Roth's “manifesto” approach, here is what it could look like:
But wait there is more. Around the globe, other governments are also seeing major efficiencies from using standardized data to gain reporting efficiencies and reduce the compliance burden of businesses through XBRL.
In his post, Recovery.gov: The First Step Toward Smart Regulation, W. David Stephenson sums it up like this: “If eventually adopted not just by Recovery.gov but agencies in general, such an approach could dramatically reduce company's and local government's reporting burdens; improve regulatory oversight by giving agencies simultaneous, real-time access to the same data; and, as a bonus, help improve organization's efficiency.”
Radical transparency, smart regulation, streamlined reporting, efficiency and reduced compliance costs?
Isn't this an idea that is desperately needed NOW?
There is a bill in the House and Senate that gets this started. H.R. 2146 introduced by Rep Darrell Issa (R-CA) and the Senator Mark Warner (D-VA) introduced S. 1222 in the Senate.
That is why the Maryland Association of CPAs sent a letter of support to Maryland Congressman Elijah Cummings who signed on as co-sponsor of the Data Act of 2011 (Digital Accountability & Transparency Act) Download Rep Cummings – DATA Act. We lend our twelve thousand voices to the cause to shine the light on government spending and accountability.
We hope these bills begin making their way through Congress as the summer break ends. Stay tuned.