The following is cross-posted at

Yesterday, the California legislature passed AB 400, its transparency legislation that requires state expenditures over $5,000 to be posted online with contextual information detailing the purpose of the expense, allowing taxpayers to see how their money is being spent by the state. 

While Gov. Schwarzenegger had signed an executive order that required all contracts over $5,000 to be posted on his website earlier this year, this (once the  governor signs the bill) would be the first time transparency has been codified into law in the Golden State – and it’s a long-overdue step for a state that has been plagued with budget problems for years.

The state legislature had long agreed on a comprehensive overhaul of the financial management system. The new system called FISCal is supposed to be serving as a single integrated system that encompasses the management of resources and dollars in the areas of budgeting, accounting, procurement, cash management, financial management, financial reporting, etc.  With the overhaul in the works, it should be very easy to slip the construction of a comprehensive searchable online database as part of the package (that’s how Kansas got theirs). And essentially, that’s what the bill does – it requires the FISCal system to integrate a transparency component.

The challenge is that the bill is not very clear as to how the data is to be presented. While basic categories for expenditures over the amount of $5,000 are included (amount, type of transaction, agency making expenditure, budget program source and brief description of purpose as well as description of any item purchased pursuant to the expenditure), there is no requirement that the information be searchable or downloadable. Another deficiency is the $5,000 threshold (although that’s already reduced from $10,000 initially).

One would think that a modern financial management system should be able to provide taxpayers with a fantastic comprehensive website.  California is notorious for leading the nation in many bad ways (some say, as California goes, so goes the nation, and that’s usually not a compliment).  Let’s hope the state uses this opportunity to shine, and will build a site that goes far beyond the basic requirements of the bill.