The State of Connecticut working with its municipalities, has now made available financial and non-financial benchmarks of key municipal information that can be found on The State of Connecticut Municipal Benchmark Website at: https://ucoa.ct.gov/benchmarking.

Background Regarding the Benchmarking Project

Public Act (PA) 11-57 directed and authorized the Office of Policy and Management (OPM) to  develop a benchmarking system that includes financial and nonfinancial data from various sources.  In addition, Section 257 of PA 13-247 (see pertaining statute Sec. 7-406c), authorized and directed OPM to design, develop and implement a uniform system of accounting for municipal revenues and expenditures.  The uniform system of accounting was required to include a uniform chart of accounts (UCOA) to be used to report financial data at the municipal level.  Furthermore, municipalities by June 30, 2015, were required to implement the UCOA by completing and filing annual reports with OPM as may be required by the Secretary of OPM in order to increase transparency and meet the State’s benchmarking goals. 

These public acts authorizing the development of a State and Local Benchmarking System and UCOA for reporting by municipalities, provided an important opportunity to create a tool available to and of benefit to local and state policy makers, taxpayers and those researching these matters.  The UCOA was developed in consultation with the Connecticut Conference of Municipalities (CCM) and the Council of Small Towns (COST).   To assist with understanding and using the UCOA, a municipal UCOA Accounting Manual was developed. It is important to emphasize that, although the UCOA will provide a structure for reporting expenditures and revenues, municipalities are not required to replace their current chart of accounts with the UCOA.  Those municipalities in the process of or planning to create a new chart of accounts are, however, encouraged to consider use of the UCOA and associated accounting manual that was developed.

Electronic Mapping Tool for Municipal Financial Information

OPM’s consultant for the project, Blum Shapiro, was directed to identify a mechanism that would meet the State’s data collection and benchmarking needs without significantly altering the underlying financial accounting systems of municipalities from which such information would ultimately be derived.  The creation of a mapping tool, from municipal local charts of accounts to the State UCOA, was determined to be the best approach to meet this objective.  Once the information is mapped and collected in the Mapping Tool it will be filtered and transmitted to the Municipal Benchmarking Application and presented on the Benchmarking Website for use by the State, its municipalities and other municipal stakeholders, including the public at large.

The mapping tool does not require a one-for-one mapping of each and every account in a local financial accounting system to its uniform account counterpart included in the UCOA.  The information is being mapped based upon the benchmarking needs of the State and its municipalities to conform with authoritative legislation and after soliciting feedback from municipal stakeholders.  Below is more information in regard to the mapping of municipal financial information that has occurred from the inception of the project.  The collection and benchmarking of school district financial data is proceeding independently by the State Department of Education (SDE).

Mapping of Municipal Financial Information

Understanding that in the past financial information to the State by municipalities was transmitted primarily through the issuance and filing of annual financial audit reports, the reporting and mapping of municipal financial information was conducted in incremental phases beginning with high-level mapping in calendar year 2014 and moving towards more detailed mapping in subsequent years.  In the initial years of the project, requests were made to all municipalities to transmit their general ledger financial information from their local accounting systems to Blum Shapiro, the State’s Consultant.  The information from the local charts of accounts was then cross-walked to the UCOA.

Once a municipality's local accounts from its financial accounting system have been cross-walked to the UCOA, the mapping tool creates a unique map for that municipality that is embedded in the mapping tool.  Subsequent years' trial balance data uploaded to the mapping tool by a municipality will use the map earlier created for that municipality to automatically cross-walk its local accounts to the UCOA at the level of detail embedded in the map.  With this in mind, beginning in calendar year 2016 (for FY 2015 trial balance), and for subsequent years, each municipality would upload its trial balance to the mapping tool, understanding that the maps embedded in the mapping tool from the work done by OPM's Consultant, would allow the local accounts of the municipality to be automatically cross-walked to the UCOA; thus not requiring municipalities to have to map these local accounts.  In cases where a municipality may have included new local accounts in its trial balance that were not included in the previously created map for that town, the municipality would need to conduct the mapping for those new local accounts.  Training was provided to municipalities on use of the mapping tool, including training and instructions for mapping new local accounts to the UCOA. 

The need for changes in the mapping of municipal financial information in subsequent years will be assessed by OPM on an annual basis based upon feedback from stakeholders or changes deemed necessary by OPM.

Creation of Benchmarking Analytical Tools and Interactive Website

Municipal revenue, expenditure and selected non-financial information is being made available using an interactive reporting tool developed by OPM’s consultant, Blum Shapiro. This tool will provide revenue and expenditure information from each town and allow geographical and population-based groupings of municipalities. OPM also plans to use this data for its own reporting and to make the underlying data available for municipalities, researchers and citizens to do their own analysis.

In order to assist with the implementation of this initiative and to ease the reporting burdens on cities and towns, the reporting of municipal financial information occurred in the following phases:

• Phase 1 - High Level Mapping.  Reporting by General Fund major object revenue categories (e.g. Property Taxes, Intergovernmental) and functional expenditure levels (e.g. General Government, Public Safety).  Initial Test of the Mapping System for reporting at this level occurred in Calendar Year 2014 (based upon FY 2013 municipal financial information collected).
• Phase 2 - Mid-Level Mapping.  Reporting revenues for the General Fund and other Funds by major objects and reporting expenditures at functional and higher level department (e.g. Police, Town Clerk) groupings for General Fund and other funds.  In addition, major object reporting for salaries and employee benefits.  Mapping of the FY 2014 municipal financial information first begun in Calendar Year 2015.
• Phase 3 - Detailed Mapping.  Reporting expenditure at a more detailed level below the Phase 2 departmental level /major object for certain financial data based upon the benchmarking needs of the State, its municipalities and municipal stakeholders.  Major expenditure object reporting for employee benefits and for regular salaries/wages and overtime.  Costs related to certain Shared Services are also reported, if applicable.  More detailed revenue information on Intergovernmental Revenues to identify state aid and federal aid. 

Limitations and Considerations in Making Comparisons between Jurisdictions

The benchmarking tool provides important information about municipal expenditures and revenues within and comparatively between cities and towns statewide, geographically and population groups; however, there are differences in how municipalities categorize certain revenues and expenditures that must be considered when making such comparisons.  A few examples of these include:

• State grants or reimbursements for Education Purposes.  Some towns may include certain education grants as general revenues, while other may use these grants or reimbursements to “net fund” certain programs or will treat these grants as special funds outside the general fund.

• Employee Benefits (including pensions and health care) and Capital Costs.  Some municipalities may allocate these costs to individual departments, including for the Board of Education, while others may centralize these costs under “General Government” or “Other”.  Some jurisdictions may have centralized accounts for these expenses on both the municipal and education sides of the budget.

• Transfers from Other Funds.  These may include enterprise funds or other special funds.  Again, for example, some of these transfers may be considered as revenues in the General Fund in some jurisdictions, while they are expenditure offsets in others.

Work has begun to address these and other issues.  OPM will present information collected from municipalities that completed the Municipal Operations Survey.  The Survey information can assist users of the municipal benchmarking system in making valid comparisons between municipalities. Other efforts will include OPM working with SDE on a process to transmit certain of the detailed education data that resides in the SDE data warehouse into the municipal data warehouse to enhance the municipal benchmarking system.