A Sept. 8 article in the Log Cabin Democrat uncovered a legislative audit that found undocumented expenditures by the city of Damascus' former police chief of nearly $10,000 on restaurant meals, clothing, shoes, online shopping, and more. All of these were purchased with state funds.
This corruption too often goes unnoticed. Audits are necessary for all government entities if we are serious about detecting corrupt activities.
Audits reveal whether or not government entities are complying with Arkansas' fiscal and financial law. While noncompliance does not necessarily imply fraudulent activities, undocumented expenditures deprive taxpayers of useful information they need to make informed evaluations of how government entities use tax dollars.
This Damascus revelation put the former police chief in the spotlight, but it is also a reminder to be vigilant about the compliance of other government entities. A quick glance at the audit reports from 1998 to 2016 for the city of Damascus reveals that other offices have also been noncompliant with the Arkansas fiscal and financial laws. For example, the office of the recorder/treasurer did not comply with the law eight times over the 18-year period.
All government entities need to follow the rules and regulations in their reporting of financial information. An accurate record of government finances is part of the good stewardship of resources taxpayers expect of their elected officials.
While legislative audits are important for detecting abuses, they can only identify wrongdoings after they've occurred. This means that we need to deter corruption from happening in the first place.
One way is to improve the transparency of government processes and activities. Financial information should be easily accessible to citizens.
Transparency International, a leading organization in combating corruption across the world, identifies transparency as one of the key ingredients for reducing abuse of public resources. Officials that are monitored and scrutinized by the public in real time will be prudent in the way they use tax dollars. This is supported by research published in Public Administration Review, which shows that transparency improves financial management by making fraud easier to find.
How is Arkansas faring with government transparency? A 2013 Transparency Report Card produced by the Sunshine Review showed that the Arkansas state government earned a C+, and Arkansas counties earned an F.
Arkansas' county governments are far less transparent than state government, yet they are just as important. Their closeness to the citizens allows them to be direct providers of most public services, including public health and public safety. When citizens are unaware of how elected officials allocate tax dollars, abuses can take place.
Arkansas' tax burden is much larger than neighboring states. According to data from the Census Bureau and Bureau of Economic Analysis, Arkansas' tax revenue as a share of state GDP is bigger compared to neighboring states. Taxing Arkansans at a higher clip than neighboring states means that our public officials should be even more prudent in the way they spend tax dollars. Every dollar misappropriated means a dollar less to provide public safety for the citizens. In the case of the city of Damascus' former police chief, $9,273 are now not available to provide public safety to 383 residents.
The Arkansas Bureau of Legislative Audit promotes sound financial management and accountability of public resources, but it is not enough. Arkansans deserve to know how every one of their tax dollars is spent. To ensure that, financial transparency from the local and state government is imperative. All Arkansas local governments should make their up-to-date financial information easily accessible to the public by posting the information online in a fashion similar to the state's transparency.
Mavuto Kalulu is a policy analyst at the Arkansas Center for Research in Economics (ACRE) at the University of Central Arkansas in Conway. Terra Aquia is a research assistant at ACRE. The views expressed are those of the authors and do not necessarily reflect those of the University of Central Arkansas.
Editorial on 11/16/2017