W w w. h a r r i s i n t e r a c t i v e. c o m ©2007, Harris Interactive Inc. All rights reserved. Survey Report on Perceptions of Governmental Financial.

w w w. h a r r i s i n t e r a c t i v e. c o m ©2007, Harris Interactive Inc. All rights reserved. Survey Report on Perceptions of Governmental Financial Management Association of Government Accountants Presented by Justin Greeves, Vice President, Public Affairs Research Kaylan Orkis, Research Assistant, Public Affairs Research February 20, 2008

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 2 Contents Background & Objectives……………………………………………..3 Methodology…………………………………………………………….4 Executive Summary……………………………………………………5 Detailed Findings The Expectations Gap………………….……….……………….12 A Problem with Trust……..…………………………….……......18 What the Public Wants..…..……………………….…….….…...28 Information Categories …..………………….….….….…….…..42 Information Sources ………….……….…………….…….……..44 Demographics …………………..………………………………..47 Conclusions…………………..…………………….……………..50

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 3 Background & Objectives This research, commissioned by the Association of Government Accountants and conducted by Harris Interactive, was conducted to serve as a benchmark of attitudes and opinions among the general public toward governments’ financial management and perceived levels of accountability to the public at all levels. Objectives  Measure broad perceptions of importance and satisfaction with regard to receiving financial management information from government (local, state, federal)  Assess the relative importance and performance by government on specific elements of financial management delivery to the public  Determine which sources of information Americans rely on for governments’ financial management information (local, state, federal) and how this information is used by the public.  Seek suggestions on how government can improve on its accountability and delivery of financial information to the public

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 4 Methodology  Audience: United States residents, 18 years or older  Method: Online Survey using the Harris multi-million member online panel  Field Dates: January 4-8, 2007  Surveys Completed: n = 1,652  Sampling Error: +/- 2.4 percentage points in 95 out of 100 cases  Survey Duration: 14 minutes

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 6 Executive Summary – Headlines and Themes  Government at all levels is failing to meet the needs of its citizens with regard to financial management reporting. This expectations gap is quite large. – The public at large overwhelmingly believes government has the obligation to provide reporting that explains how the government generates and spends its money; however, government is not meeting expectations in any area included in this survey.  Poor performance on financial management reporting has created a problem with trust between citizens and their governments in regards to spending practices. – Across all levels of government, the gaps are widest in being “open and honest in spending practices” and being “responsible to the public for its spending.” Surprisingly, no level of government, including local, receives an average rating above the mid-point (5, on a 1-10 scale) on any aspect of financial management.  Respondents are specific in the ways in which government can address their needs and improve accountability, including better reporting (open disclosure, easy-to-read reports), a change in attitude in communications (honesty and transparency) and better information in the right channels (websites, through the press).

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 7 Executive Summary  There is an overall agreement on the importance for federal, state and local governments’ financial management information to be available to the public. – 72% say that it is important to receive this information from the federal government. – Only 5% believe that having this information available to them is not important, regardless of level of government.  However, among those who do receive information about governments’ generation and spending of money, there is a strong dissatisfaction with the information that they receive. – The strongest dissatisfaction is with the information about the federal government’s financial management (Federal, 60%; State, 46%; Local, 38%). Only 5% are satisfied with what they receive from the federal government.  A large majority of Americans (90%) believe that as taxpayers, they are entitled to transparent financial management information. – 57% take the strongest position possible that government has an obligation to provide reports that explain how the government generates and spends money. The Expectations Gap

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 8  Americans perceive governments to be significantly under-delivering in regards to practicing open, honest and responsible spending. They are also performing below expectations as it relates to providing understandable and timely financial management information.  While the overall magnitude of performance scores is still poor, all three levels of government are rated most effective at being responsible to the public for its spending - the aspect that is most important to Americans. Again, this level of performance is still at the bottom of the scale (Top 2 Box on 10 point scale – Federal, 9%; State, 9%; Local, 12%).  Governments are especially underachieving in the aspect that ranks second in importance – being open and honest in spending practices (Bottom 2 Box on 10 point scale – Federal, 5%; State, 5%; Local, 7%).  The gaps between importance and performance decrease as government becomes more localized, but no level of government scores above a 5 in performance (10 point scale). Executive Summary A Problem with Trust

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 9 Executive Summary  Of those who currently receive information or believe that having financial information available is at least somewhat important, almost three-quarters (71%) mention the information would influence their voting decision. – Other common mentions include contacting my representative (48%), attending town hall meetings and gatherings (28%), and simply wanting to be informed (26%)  The major concern with financial management across all levels of governments is the Excessive Amounts of Unrestrained Spending. – 23% mention it as their biggest concern with the Federal governments’ management, while 15% mention it as their concern with the state and local governments.  When asked about the ways in which government can demonstrate greater accountability, the most common themes are Improved Reporting (42%) and a different Attitude (28%) in reporting. – The most frequent specific mentions across all categories were: Provide Open Disclosure of Spending (18%), Easy to Read Reports (7%), Be Honest (10%), Cut Down on Unnecessary Spending (9%), and Provide Information on Websites (7%). What The Public Wants

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 10 Executive Summary  Respondents were asked to rank the importance of each category of financial spending information across Federal, State and Local Government. The findings indicate that respondents have clear expectations on which levels of government should deliver on which categories of information: – At a Federal level, respondents perceive Health Care information (75%) and Environment information (62%) to be most important to them personally. – At a State level, information about Transportation (58%) and Education (57%) were most important. – At a Local level, information about Safety (55%) was the single most important category. Information Categories

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 11 Executive Summary  Americans are most likely to rely on traditional sources -- the news and newspaper -- for information on government financial management. – Federal: News, 73%; Newspaper, 58% – State: News, 70%; Newspaper, 58% – Local: Newspaper, 59%; News, 57%  A significant portion of the population is searching online for information on how the government is generating and spending money (Federal, 33%; State, 30%; Local, 24%).  Over one in ten say that they do not get any information on federal, state or local government financial management (Federal, 12%; State, 13%; Local, 15%). Information Sources

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 13 Nearly three-quarters of Americans say it is personally important that financial management information, across all levels of government, is available to them; however, the majority of Americans who currently get information are not satisfied with what they receive. *Please note base sizes differ Base: All Respondents (n = 1652) Q515 How important to you personally is it that information about your Federal, state and local governments’ financial management is available to you? Base: Get information (Federal; n= 1461) (State; n= 1443) (Local; n= 1413) Q505 How satisfied are you with the information you get about your governments’ financial management?

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 14 Federal Government: Americans are the most dissatisfied with the information they receive about the Federal government’s financial management – 72% say it is important, yet 60% are not satisfied. *Please note base sizes differ Base: Get information (Federal; n= 1461) Q505 How satisfied are you with the information you get about your governments’ financial management? Base: All Respondents (n = 1652) Q515 How important to you personally is it that information about your Federal, state and local governments’ financial management is available to you? Bottom 2 Box Not Important (NET): 5% Not Satisfied (NET): 60% Top 2 Box Important (NET): 72% Satisfied (NET): 5% -67%

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 15 Top 2 Box 25% 28% State Government: Almost half (46%) are not satisfied and another 47% are only somewhat satisfied with the information they receive about their state’s financial management. *Please note base sizes differ Base: Get information (State; n= 1443) Q505 How satisfied are you with the information you get about your governments’ financial management? Base: All Respondents (n = 1652) Q515 How important to you personally is it that information about your Federal, state and local governments’ financial management is available to you? Top 2 Box Important (NET): 73% Satisfied (NET): 7% Bottom 2 Box Not Important (NET): 5% Not Satisfied (NET): 46% -66%

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 16 Local Government: Americans are the most satisfied with information provided by their local government (13%), but two in five (38%) are still disappointed with the information they get. *Please note base sizes differ Base: Get information (Local; n= 1413) Q505 How satisfied are you with the information you get about your governments’ financial management? Base: All Respondents (n = 1652) Q515 How important to you personally is it that information about your Federal, state and local governments’ financial management is available to you? Top 2 Box Important (NET): 72% Satisfied (NET): 13% Bottom 2 Box Not Important (NET):5% Not Satisfied (NET): 38% -59%

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 17 An overwhelming majority of Americans (90%) believe taxpayers are entitled to receive reports that explain how the government generates and spends its money; only 4% believe the opposite. Base: All Respondents (n= 1652) Q510 After you read both statements, please indicate which opinion comes closest to your own. Total Smith Government is obligated to provide reports 90% Total Jones Government is not obligated to provide reports 4%

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 19 Federal Government: The two areas in need of the most attention relate to spending practices – honesty (5.9 point gap) and responsibility to the public (5.7 point gap). Top 2 Box (9,10 on 10 point scale) - 5.7 - 5.9 - 4.6 - 5.3 Base: All Respondents (n = 1652) Q530 Please indicate, using a 10-point scale, how important it is to you personally that the Federal government deliver on that statement. Q540 Please indicate how well you think the Federal government is performing on each of these statements. Mean Scores Gap 7.9 9.1 3.4 8.7 2.8 8.4 3.1 8.0 3.4 3.3

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 20 10 point scale: 10=Extremely well, 1=Not well at all Importance Performance The Federal government is responsible to the public for its spending. The Federal government is open and honest in its spending practices. Importance Performance Federal Government: Over three-quarters (78%) believe that it is very important for them to be held accountable to the public for their spending, yet less than one in ten (9%) say they are performing up to these expectations. 10 point scale: 10=Extremely important, 1=Not important at all 10 point scale: 10=Extremely well, 1=Not well at all Base: All Respondents (n = 1652) Q530 Please indicate, using a 10-point scale, how important it is to you personally that the Federal government deliver on that statement. Q540 Please indicate how well you think the Federal government is performing on each of these statements.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 21 Federal Government: Having understandable information about federal finances is very important to 62%, but half (49%) say the Federal government is not performing well on this. 10 point scale: 10=Extremely important, 1=Not important at all Importance Performance Importance Performance Importance Performance The Federal government provides timely financial statements and status reports. The Federal government educates the public on its current challenges. The Federal provides understandable information about its finances. 10 point scale: 10=Extremely well, 1=Not well at all 10 point scale: 10=Extremely important, 1=Not important at all 10 point scale: 10=Extremely well, 1=Not well at all 10 point scale: 10=Extremely important, 1=Not important at all 10 point scale: 10=Extremely well, 1=Not well at all Base: All Respondents (n = 1652) Q530 Please indicate, using a 10-point scale, how important it is to you personally that the Federal government deliver on that statement. Q540 Please indicate how well you think the Federal government is performing on each of these statements.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 22 State Government: The state governments are also performing the most poorly in their openness and honesty with spending practices. - 4.1 - 4.3 - 3.5 - 3.7 - 3.8 Base: All Respondents (n = 1652) Q550 Please indicate, using a 10-point scale, how important it is to you personally that the state government deliver on that statement. Q560 Please indicate how well you think the state government is performing on each of these statements. Top 2 Box (9,10 on 10 point scale) 8.4 4.3 8.1 3.8 7.8 4.0 7.7 4.2 4.0 Mean Scores Gap 7.7

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 23 10 point scale: 10=Extremely important, 1=Not important at all Importance Performance The state government is open and honest in its spending practices. Importance Performance State Government: Nearly two-thirds (64%) of Americans agree that it is exceptionally important for governments to be responsible for their spending, but only 9% say they are performing up to these expectations. The state government is responsible to the public for its spending. 10 point scale: 10=Extremely well, 1=Not well at all 10 point scale: 10=Extremely important, 1=Not important at all 10 point scale: 10=Extremely well, 1=Not well at all Base: All Respondents (n = 1652) Q550 Please indicate, using a 10-point scale, how important it is to you personally that the state government deliver on that statement. Q560 Please indicate how well you think the state government is performing on each of these statements.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 24 State Government: Half (51%) believe it is very important to be provided with understandable information, 48% want to educated on the states’ challenges and 47% want timely reports. 10 point scale: 10=Extremely important, 1=Not important at all Importance Performance Importance Performance Importance Performance 10 point scale: 10=Extremely important, 1=Not important at all 10 point scale: 10=Extremely well, 1=Not well at all The state government provides timely financial statements and status reports. The state government educates the public on its current challenges. The state provides understandable information about its finances. Base: All Respondents (n = 1652) Q550 Please indicate, using a 10-point scale, how important it is to you personally that the state government deliver on that statement. Q560 Please indicate how well you think the state government is performing on each of these statements.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 25 Local Government: The performance gaps are smaller among local governments’ scores but there is room for improvement in all aspects of financial management. - 3.6 - 3.2 - 3.3 Base: All Respondents (n = 1652) Q570 Please indicate, using a 10-point scale, how important it is to you personally that the local government deliver on that statement. Q580 Please indicate how well you think the local government is performing on each of these statements. Top 2 Box (9,10 on 10 point scale) Mean Scores Gap 8.3 4.7 8.0 4.4 7.8 4.5 7.8 4.6 4.5 7.7

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 26 10 point scale: 10=Extremely important, 1=Not important at all Importance Performance My local government is responsible to the public for its spending. Importance Performance Local Government: Three in ten (30%) believe that they are not exhibiting open and honest spending practices and 28% say they are not effective at being responsible to the public for their spending. 10 point scale: 10=Extremely important, 1=Not important at all 10 point scale: 10=Extremely well, 1=Not well at all My local government is open and honest in its spending practices. Base: All Respondents (n = 1652) Q570 Please indicate, using a 10-point scale, how important it is to you personally that the local government deliver on that statement. Q580 Please indicate how well you think the local government is performing on each of these statements.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 27 Local Government: Half of Americans believe it is very important that local governments provide understandable (52%) and timely (49%) information, as well as education on its current challenges (50%). 10 point scale: 10=Extremely important, 1=Not important at all Importance Performance Importance Performance Importance Performance 10 point scale: 10=Extremely important, 1=Not important at all My local government provides timely financial statements and status reports. My local government educates the public on its current challenges. My local provides understandable information about its finances. 10 point scale: 10=Extremely well, 1=Not well at all Base: All Respondents (n = 1652) Q570 Please indicate, using a 10-point scale, how important it is to you personally that the local government deliver on that statement. Q580 Please indicate how well you think the local government is performing on each of these statements.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 29 Seven in ten (71%) of those who receive information or believe it is important to receive information say they would use the info to influence their vote; half (48%) say they would reach out to a representative. Base: Get information or important to get info ( n= 1617) Q520 How would you use information about your government’s financial management? Please select all that apply. Responses include: letters to the editor, discussing with family and friends and passing on the information to others Older, more educated and higher income individuals as well as those living in the East are more likely to say the information might affect their vote

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 30 Disclosing understandable information and being honest in reports are the most effective ways for the government to demonstrate accountability. Base: All Respondents (n = 1652) Q590 As a taxpayer, what is the most effective way for a government to demonstrate accountability? Total Base1652Base1652 REPORT (NET)42% Ask for public opinion3% Provide open disclosure of spending18% Be responsible2% Easy to read/Clear report7% Respond to needs of economy/Invest money for social cause2% Provide financial reports to the public6% Enforce ways to solve problems1% Provide access to financial reports4% Admit mistakes1% Publish reports on a regular basis3% Other attitude mentions2% Publish quarterly reports3%FINANCIAL ISSUES (NET)21% Publish the needs and resolutions to needs2% Cut down on unnecessary spending/Don't overspend9% Transparency with regard to extra expenses2% Publish budgets with expenses against the income4% Publish annual report2% Better balancing of budget3% Publish monthly reports1% Independent auditing3% Other report mentions3% Lower the taxes2% ATTITUDE (NET)28% Stay within the budget1% Be honest10% Publish budget1% Transparency/Openness9% Other financial issues mentions3% Do things as promised to the public4%

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 31 Base: All Respondents (n = 1652) Q590 As a taxpayer, what is the most effective way for a government to demonstrate accountability? Total Base COMMUNICATION (NET)19%GENERAL (NET)12% INFORMATION (SUBNET)13% Publish reports in a timely manner3% Provide information on the website7% Punish the responsible politician1% Provide detailed financial information2% Follow the Constitution/laws1% Provide accurate information2% News letters/News reports1% Other information mentions2% Eradicate politics/Corruption/Bureaucracy1% Public Meetings2% Answer the queries1% Communication through e-mail2% Other general mentions4% Communication through mail2%MEDIA (NET)7% Keep people informed1% Newspaper/Press5% Improve communication1% Television2% Other communication mentions1% Other media mentions2% Don't know9% Refused/Declined to answer3% None/Nothing2% Around one in ten (7%) Americans mentioned that having information available on a website would help to show accountability.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 32 Accountability Verbatims  A 24-7 open-books policy which allows the taxpayer to access and examine the governments generation of and spending of our tax dollar. This should be available from general categories of spending right down to individual line-items, given the individuals level of interest.  Make available all accounting records. Have an oversight committee to monitor spending.  Newspaper reports, make it easy for everyone to find and understand the way they spend the taxpayer's money.  Have information available on website in timely manner.  Provide a grade card for the public to fill out based on their view of the government spending. Publish those results to show how well the public thinks things are going, and then have a program in place to require improvement Base: All Respondents (n = 1652) Q590 As a taxpayer, what is the most effective way for a government to demonstrate accountability?

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 33 Federal Government: One quarter of Americans (23%) say their biggest concern with the Federal government’s financial management is wasteful spending and 14% specifically mentioned pork barrel spending. Base: All Respondents (n = 1652) Q605 What is your biggest concern about the Federal government’s financial management? Please be as specific as possible. Total EXPENDITURE (NET)55%GENERAL (NET)27% Overspending/Wasting money (general)23% Federal deficit/debt7% Pork barrel spending14% Mismanagement4% Spending on war9% Social security3% Healthcare3% Public interest not taken care of2% Too much spending on defense3% Too much political involvement2% Overspending on foreign aid/countries2% Economy/Employment/Attracting business1% Spending on welfare/social causes2% Too many people/Too big government1% Funds spent on salaries/bonuses1% Other general mentions8% Education1% Spending on illegal immigrants1% Spending on infrastructure1% Safety1% Other expenditure mentions5% Republicans are twice as likely as Democrats to mention pork barrel spending (22% vs. 11%) and Democrats are seven times more likely to mention concerns about spending on war (14% vs. 2%)

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 34 Federal Government (cont): Another 14% mentioned negative perceptions as their biggest concern about the Federal government. Base: All Respondents (n = 1652) Q605 What is your biggest concern about the Federal government’s financial management? Please be as specific as possible. Total ATTITUDE (NET)14%BUDGET CONCERNS (NET)5% Lack of transparency5% Lack of balanced budget2% Honest4% Allocation of funds1% Corruption2% Other budget mentions3% Lack of a responsible/caring attitude1%TAXES (NET)4% Incompetence/Inefficient1% Increasing/High taxes1% Fraud1% Taxes (unsp)1% Other attitude mentions3% Other tax mentions1% COMMUNICATION/INFORMATION (NET)7%None/Nothing4% No accountability6%Refused/Declined to answer3% Other communication/information1%Don’t know3% Democrats are more likely than Republicans to mention attitudes as a concern (17% vs. 10%)

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 35 Federal Government Concerns Verbatims  There is no accountability for what they spend the money on and why they choose to allocate an amount to a certain fund.  Lawmakers in Washington spend our money without any care or concern. Many think there is an unlimited checkbook, funded by taxpayers. They need to control spending and eliminate the national debt!  There is a lot of information available, but it is scattered through a million agencies and offices, and no easy way to learn of its existence.  Overspending and pork barrel spending on useless items to benefit particular interest groups.  They have no restraint and try to hide their spending in 1000 page volumes of appropriations bills.  There is none, financial management that is. Base: All Respondents (n = 1652) Q605 What is your biggest concern about the Federal government’s financial management? Please be as specific as possible.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 36 Base: All Respondents (n = 1652) Q610 What is your biggest concern about your state government’s financial management? Please be as specific as possible. Total Base EXPENDITURE (NET)40%GENERAL (NET)19% Overspending/Wasting money (general)15% Mismanagement3% Education10% Economy/Employment/Attracting business3% Pork barrel spending6% Positive mentions1% Healthcare3% Too much political involvement1% Spending on infrastructure3% Lack of development in the local/rural area1% Transportation2% Environmental affairs1% Funds spent on salaries/bonuses1% Reliance on gambling revenues1% Spending on illegal immigrants1% Public interest not taken care of1% Spending on welfare/social causes1% Not familiar enough/Don't know much about it1% Safety1% Lack of oversight1% Spend more on reducing poverty1% Other general mentions5% Other expenditure mentions1% State Government: Two in five (40%) mentioned a problem with spending practices, with one in ten (10%) expressing a specific concern about educational spending. Graduates of 4-year colleges are more likely than non-grads to mention educational spending concerns (13% vs. 7%)

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 37 State Government (cont): One in six (16%) cited negative attitudes as their biggest concern with state governments. Total ATTITUDE (NET)16%TAXES (NET)8% Corruption3% Increasing/high taxes3% Too much cronyism/favoritism3% Property tax1% Honest3% Taxes (unsp)1% Lack of a responsible/caring attitude3% Cutting taxes/Tax breaks1% Lack of transparency2% Other taxes mentions1% Internal conflicts/fights1%BUDGET CONCERNS (NET)6% Incompetence/Inefficient1% Allocation of funds2% Crooks/Idiots1% Lack of balanced budget2% Other attitude mentions2% Lack of funding1% COMMUNICATION/INFORMATION (NET)8% Timely budget1% No accountability6% Other budget concerns mentions1% Lack of information1%None/Nothing7% Other communication/information mentions1%Decline to answer/No answer5% Don't know5% Base: All Respondents (n = 1652) Q610 What is your biggest concern about your state government’s financial management? Please be as specific as possible.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 38 State Government Concerns Verbatims  The voters are not being told the whole story. We only get pieces of the story at various times.  Mismanagement of funds allocated to schools.  The same as the Feds. There needs to be an itemized accounting of spending which includes the person in authority who signed off on the spending.  There is also a lot of waste at the state level. Base: All Respondents (n = 1652) Q610 What is your biggest concern about your state government’s financial management? Please be as specific as possible.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 39 Total Base EXPENDITURE (NET)33%GENERAL (NET)24% Overspending/Wasting money (general)15% Positive mentions4% Education6% Economy/Employment/Attracting business4% Spending on infrastructure5% Public interest not taken care of3% Safety2% Mismanagement2% Spend more on public utility service2% Unqualified personnel1% Funds spent on salaries/bonuses1% Lack of development in the local/rural area1% Pork barrel spending1% Not familiar enough/Don't know much about it1% Transportation1% Other general mentions8% Healthcare1% Spending on illegal immigrants1% Other expenditure mentions2% Local Government: One third (33%) mentioned an expenditure concern with 15% mentioning overspending or wasteful spending. Base: All Respondents (n = 1652) Q615 What is your biggest concern about your local government’s financial management? Please be as specific as possible. Republicans are more likely than Democrats to mention expenditure concerns in general (38% vs. 31%), as well as wasteful spending (20% vs. 12%) Local governments’ financial management had the most positive mentions (4%)

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 40 Local Government (cont): The image of dishonest and unfair financial management has the same prevalence at the most localized level. Total ATTITUDE (NET)14%BUDGET CONCERNS (NET)5% Too much cronyism/favoritism3% Lack of funding3% Honest3% Lack of balanced budget1% Lack of transparency2% Allocation of funds1% Corruption2% Other budget concerns mentions* Incompetence/Inefficient1%TAXES (NET)5% Fraud1% Property tax2% Internal conflicts/fights1% Increasing/high taxes2% Crooks/Idiots1% Taxes (unsp)1% Other attitude mentions1% Other taxes mentions1% COMMUNICATION/INFORMATION (NET)7%None/Nothing9% Lack of information3%Don't know6% No accountability3%Decline to answer/No answer5% Other communication/information mentions1% Those aged 55 years or older are twice as likely to mention communication barriers than 18-35 years old (10% vs. 5%) Base: All Respondents (n = 1652) Q615 What is your biggest concern about your local government’s financial management? Please be as specific as possible.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 41 Local Government Concerns Verbatims  They make some decisions too quietly so it is difficult for citizens to play any kind of active role.  Lack of information reported to the citizens by media.  Exactly where are our dollars going, an itemize list of those things.  Failure to divulge spending and budgets.  All they can do is raise our taxes and yet never tell us why the increase is needed.  Special interests exert pressure on politicians at a local level. Base: All Respondents (n = 1652) Q615 What is your biggest concern about your local government’s financial management? Please be as specific as possible.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 43 Americans rely on the Federal government for information about health care and the environment, the state governments for information about transportation and education and the local governments for safety info. Base: All Respondents ( n= 1652) Q600 Of the following, please indicate which one is most important, for you personally, to receive information on about the government’s financial efforts at the Federal, state and local level. Funding health care coverage and assistance, funding public health initiatives and programs to reduce the cost of prescription drugs. Funding programs to protect wildlife and public parks lands as well as promoting reductions of greenhouse gas emissions. Funding programs to encourage job creation and attract business opportunities. Maintaining, developing, and funding highways, roads, bridges and public transportation systems. Funding public education, building schools and universities, and providing assistance to low-income students and their families. Supporting programs to build public services such as police and fire fighting, funding initiatives to reduce the use of and distribution of illegal drugs.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 45 Currently, the news and newspapers are the public’s two most commonly used sources for financial management information. Online, friends and family, and peers and colleagues comprise the second tier. Base: All Respondents ( n= 1652) Q500 How do you currently get information about your [Federal/state/local] governments’ financial management? Tier 1 Tier 2 Tier 3

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 46 75% vs. 57% 73% vs. 52% 64% vs. 42% 61% vs. 44% 34% vs. 25% 38% vs. 28% 32% vs. 18% 5% vs. 2% 16% vs. 11% 21% vs. 10% 24% vs. 11% 21% vs. 11% Older, more educated and higher income individuals tend to utilize certain information sources to a greater extent than their respective counterparts. News 35+ vs. 18-34 year olds Some college or more vs. HS or less Newspaper 35+ vs. 18-34 year olds $35, 000+ income vs. <$35,000 Online Males vs. Females $125,000+ income vs. <$125,000 Some college or more vs. HS or less Town hall or meeting 35+ vs. 18-34 year olds Do not get any information Females vs. Males 18-34 vs. 35+ year olds HS or less vs. Some college or more <$35,000 vs. $35,000+ income FEDERALSTATE 60% vs. 48% 60% vs. 41% 65% vs. 45% 62% vs. 49% 28% vs. 21% 32% vs. 22% 26% vs. 16% 15% vs. 7% 17% vs. 12% 22% vs. 12% 25% vs. 13% 24% vs. 12% 79% vs. 61% 76% vs. 59% 64% vs. 44% 61% vs. 44% 38% vs. 28% 45% vs. 30% 36% vs. 20% 3% vs. 1% 15% vs. 10% 19% vs. 9% 24% vs. 10% 18% vs. 11% LOCAL Base: All Respondents ( n= 1652) Q500 How do you currently get information about your [Federal/state/local] governments’ financial management?

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 48 Demographics Total GenderMale 48%Race/EthnicityWhite71% Female 52%Hispanic12% Age 18 - 192%Black/ African American (Net)11% 20 - 245% Black9% 25 - 2917% African American2% 30 - 347%Asian or Pacific Islander1% 35 - 3912%Native American or Alaskan native1% 40 - 447%Mixed racial background1% 45 - 4912%Other race1% 50 - 548%Decline to answer2% 55 - 599%EducationLess than high school1% 60 - 646%Some high school1% 65 and over16%High school or equivalent (e.g., GED)16% Region East22%Some college, but no degree28% Midwest22%Associate's degree8% South34%College (e.g., B.A., B.S.)23% West22%Some graduate school, but no degree6% Graduate school (e.g., M.S., M.D., Ph.D.)17%

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 49 Demographics Total Income Less than $15,0004%Employment StatusEmployed full time53% $15,000 to $24,9997%Employed part time11% $25,000 to $34,9999%Self-employed10% $35,000 to $49,99912%Not employed, but looking for work4% $50,000 to $74,99919%Not employed and not looking for work3% $75,000 to $99,99912%Retired19% $100,000 to $124,9999%Student11% $125,000 to $149,9995%Homemaker9% $150,000 to $199,9994%Political AffiliationRepublican26% $200,000 to $249,9991%Democrat35% $250,000 or more2%Independent27% Decline to answer15%Other4% Not sure6% Decline to answer4%

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 51 Conclusions  Americans want transparent financial management information but are frustrated with what they are currently receiving across all levels of government. >> Providing readily accessible information that is detailed yet understandable will narrow the expectations gap that currently exists with regard to financial management reporting for government at all levels. >> An excellent opportunity exists to leverage the Internet as a means of communication.  The public perceives governments to be opaque, not fully open and honest and careless in their spending practices. >> Openly circulating complete expenditure information will increase governments’ accountability, in turn, positively enhancing their image among the public.  Increasing availability of financial management information may have some particularly significant, positive, consequences as it relates to voting behaviors, increasing trust in government, and peoples’ engagement with their governments.

©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 52 About Harris Interactive Harris Interactive is the 13th largest and one of the fastest- growing market research firms in the world. The company provides innovative research, insights and strategic advice to help its clients make more confident decisions which lead to measurable and enduring improvements in performance. Harris Interactive is widely known for The Harris Poll, one of the longest running, independent opinion polls and for pioneering online market research methods. The company has built what it believes to be the world’s largest panel of survey respondents, the Harris Poll Online. Harris Interactive serves clients worldwide through its North American, European and Asian offices, and through a global network of independent market research firms. More information about Harris Interactive may be obtained at www.harrisinteractive.com. www.harrisinteractive.com To become a member of the Harris Poll Online and be invited to participate in online surveys, register at www.harrispollonline.com. www.harrispollonline.com. 52 ©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E

W w w. h a r r i s i n t e r a c t i v e. c o m ©2007, Harris Interactive Inc. All rights reserved. Survey Report on Perceptions of Governmental Financial.

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W w w. h a r r i s i n t e r a c t i v e. c o m ©2007, Harris Interactive Inc. All rights reserved. Survey Report on Perceptions of Governmental Financial.

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