October 12, 2022

Federal "Financial Data Transparency Act" Could Become Unfunded Mandate with Possible Inclusion into

National Defense Authorization Act

The Ohio Municipal League and its partners at the National League of Cities are asking you to contact U.S. Senator Sherrod Brown to inform him of your opposition to the Financial Data Transparency Act of 2022 being included in the National Defense Authorization Act.

The federal National Defense Authorization Act (NDAA) is a defense spending bill that must be passed every year, but the Financial Data Transparency Act is unrelated legislation that would create a costly, unfunded mandate by establishing new financial data standards that would apply to local governments.  

The Financial Data Transparency Act of 2022 seeks to establish a uniform standard of financial reporting that encompasses many different types of issuers, including states, cities, counties, water systems, public power providers, public gas providers, hospitals, and more. 

The Problem for Local Governments

As written, the introduced legislation would require local governments to come into compliance with the new financial reporting standard by 2027. Changing the current financial reports issued by local governments would mean the potential loss of valuable information contained within current financial reports that benefit the local government as an organization.  

Additionally, the transition to a new system of reporting financial standards will require resources—consultants, software, and reconfiguring municipal financial systems to account for the new reporting standards. This costly adjustment would fall on the backs of local governments as they work to comply with the new standards by 2027, with no financial support from the federal government.  

Contact Sen. Sherrod Brown

It is essential that Sen. Sherrod Brown hears from his constituent municipalities on this issue because of his powerful role as chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs.

He needs to hear from local leaders about how this new financial standard will be costly, time-consuming, and create an unfunded mandate on your government. We need you to urge him to keep this provision out of the NDAA. 

The Ohio Municipal League has sent Sen. Brown THIS LETTER, which can serve as a template for your municipality. You are also encouraged to email and call his Washington, D.C. office.

Thank you!