(The Center Square) – Virginia ranked 14th in a new financial transparency report examining how clearly states report audits, pension costs and other long-term financial obligations to taxpayers.
The report, released by Truth in Accounting, gave Virginia a score of 78 out of 100 and described the commonwealth as performing “relatively well overall,” with strong audit outcomes and moderate levels of pension-related distortion.
Truth in Accounting said overall transparency scores declined nationwide this year as several states struggled with delayed financial reports, pension reporting issues and audit problems.
Virginia scored higher than states including North Carolina, Georgia, California and Illinois. West Virginia and New Mexico received the nation’s top scores at 87, while Connecticut ranked last in the report.
The nonprofit group evaluated states using several categories, including audit opinions, reporting timeliness, pension data, use of external auditors and whether financial statements fully reflected retirement-related liabilities.
According to the report, Virginia’s score was helped by a clean, or unqualified, audit opinion on the state’s financial statements and what the organization described as relatively timely reporting. Truth in Accounting said Virginia released its financial report in about 166 days.
But the report also identified several areas that lowered Virginia’s score.
Truth in Accounting said the audit of Virginia’s financial report and its largest pension system is conducted by a state audit office instead of a fully independent outside CPA firm under the organization’s preferred audit independence standards.
According to information provided to The Center Square by Truth in Accounting, Virginia’s state financial report uses pension valuation data from the prior fiscal year rather than data from the same fiscal year covered by the report.
“Virginia’s financial reporting is generally strong, but transparency from a taxpayer perspective could be improved through the use of independent external auditors and more current pension valuation data,” Sheila Weinberg, founder and CEO of Truth in Accounting, told The Center Square in a statement.
Truth in Accounting based its rankings on each state’s annual comprehensive financial report and related pension reporting documents.
States could gain points for clean audit opinions, faster reporting timelines and independent audits, while losing points for delayed reports, outdated pension data or accounting practices the organization said can distort a government’s financial position.
