A Guide to Data, Reporting, and Analytics for Local Governments

Reporting nowadays is more than just summarizing transactions. It demonstrates accountability, supports decisions, meets GAAP requirements, and gives constituents enough context to understand what the numbers mean. It's basically a narrative. Or, at least, it should be.

Easier said than done, though. Especially if you're more of a numbers person rather than a storyteller. 

Well, we've got your back, as always.

In this guide, we’ll:

• break down the difference between data, reporting, and analytics and show how they work together to support better decisions in local government

• look at how financial and performance reporting can give citizens and governing boards more context

• talk about how materiality, trends, and benchmarks can help finance teams focus their efforts

• discuss why trustworthy data and clear methodology are essential.

• cover practical ways to connect strategic priorities, budgets, activities, and results

• relay how to create a reporting cadence that keeps information useful

What's the Difference Between Data, Reporting, and Analytics?

These three terms often get tossed around together, but they aren't the same thing (if you thought they were, which you probably didn't). 

• Data is the raw information your organization collects: transactions, permits, service requests, utility payments, payroll records, infrastructure conditions, response times, expenditures, assets, and more.

• Reporting organizes that information so people can understand what happened within a given period of time. A budget-to-actual report, financial statement, ACFR, governing board packet, or performance report falls into this category.

• Analytics goes a step further. It helps you understand why something happened, identify trends and patterns, compare performance, and make better decisions about what to do next.

In short: Data tells you what happened. Reporting helps you communicate it. Analytics helps you understand what to do about it.

And all three need to work together.

In his ICMA article, Using Data in Your Local Government: A Guide for Beginners, Marc Pfeiffer makes this important point: data isn't necessarily something you need to go out and find. Your government is already collecting it every day. Building permits, pothole complaints, water bills, budget records, infrastructure reports, census information, and resident surveys are all sources of potentially useful data.

The question is what you do with it.

Two Types of Reports

GASB's Suggested Guidelines for Voluntary Reporting—SEA Performance Information makes a useful distinction between traditional financial reporting and Service Efforts and Accomplishments (SEA) information.

Traditional financial statements provide information about a government's financial position and activities. SEA reporting adds information about the results of government programs and services.

So, financial reporting tells you what happened financially.

But it doesn't necessarily tell you whether your government achieved what it set out to achieve...

Imagine your community spent $2 million on a public works program.

A financial report can tell you that $2 million was spent.

Performance information might tell you:

• How many miles of roads were repaired

• How many work orders were completed

• The average cost per repair

• How response times changed

• Whether road conditions improved

• How those results compare with previous years or peer communities

GASB's SEA guidance specifically describes performance information in terms of service efforts, accomplishments, outputs, outcomes, and relationships between resources and results.

That's incredible information for a citizen! And now the number has context.

According to the paper, the purpose of government is connected to maintaining and improving citizen well-being through the services it provides.

And reporting can show exactly how governments have achieved that.

Government Reporting Today

For a private businesses, financial reporting is largely about helping owners, investors, lenders, and management understand financial performance.

Let's not make the mistake of thinking private and public reporting should be done the same way. Because the thing is that local governments are accountable to the public. And private businesses are traditionally not. That's a big distinction.

And because they are accountable to the public, they have a significant amount of compliance regulations to follow. 

The GASB staff working paper, Financial Reporting Framework Requirements for State and Local Governments: Evaluating GAAP Choice, examines the role of financial reporting frameworks across states, counties, municipalities, and special districts. The paper notes that while GASB establishes GAAP for state and local governments, states determine whether GAAP is required, whether an alternative framework is required, or whether governments have a choice.

This can get confusing. Especially if you're new to the local government industry.

But they do this because financial reporting isn't just about producing numbers. It's about producing information that can be understood, compared, evaluated, used, and acted upon. By Finance Directors, by State Auditors, by citizens, by businesses, etc. Everyone has an "investment" of sorts in public sector agencies. And they need to understand reports to make decisions for their future. 

Good Reporting Starts With the Audience

What? Doesn't it start with the data? Yes! But also no...

What particular data you utilize to tell the narrative is what makes it useful (or not). Because citizens have a different viewpoint than the auditor or city manager or business owners. Not everyone needs the same level of detail. And not everyone cares about the same things. 

Your finance team may need transaction-level information. Your governing board may need trends, variances, and explanations. A department head may need a handful of operational measures. A resident may simply want to understand where tax dollars are going and why.

GASB's SEA guidance specifically discusses knowing your audience and layering information. It recommends moving from an overview and introductory summary into program and service details and, ultimately, more specific performance information.

That's a pretty good rule of thumb for just about any government report:

Start broad. Then let people drill down.

You don't necessarily need to put every piece of information into one 75-page document. 

Maybe you write a report for each stakeholder category. One for the auditor, one for government leaders, one for department heads, one for private businesses, one for citizens. Each 10 pages long (or 5 or 15...). 

Regardless of the audience, think about building your report this way:

What happened (with numbers)? → Why does it matter? → What caused it (with numbers)? → What are we doing about it? → Here's more detail if you want it.

A 75-page report isn't necessarily more transparent than a 10-page report. Because what matters is if someone (without an accounting degree) can understand the information.

The Devil is in the Details

Sometimes, having too many details is a bad thing, depending on the audience.

In government finance, materiality describes whether a financial amount, transaction, or error is significant enough to affect how a reasonable reader interprets financial reports or makes a decision. If omitting or misstating an item could influence that judgment, the item is considered material. 

If you want a fancier definition, here's how Harvard Business School defines it: "Materiality is an accounting principle which states that all items that are reasonably likely to impact investors’ decision-making must be recorded or reported in detail in a business’s financial statements using GAAP standards... If a transaction or business decision is significant enough to warrant reporting to investors or other users of the financial statements, that information is 'material' to the business and cannot be omitted."

In Materiality as a Process: What Really Counts, GFOA authors Shayne Kavanagh and Michele Mark Levine argue that materiality shouldn't be treated simply as a narrow technical accounting judgment. Instead, it can be used as an ongoing management process to focus effort on information that is important to people.

The goal is to stop spending enormous amounts of time producing information that doesn't materially improve anyone's decision-making. Auditors, businesses, citizens, or otherwise.

GFOA's Close Counts: Expanding the Use of Estimates for Better, Faster Financial Reporting, also by Kavanagh and Levine, takes this idea into the realm of being precise. The report distinguishes between precision (how closely a reported amount reflects the underlying value) and accuracy, meaning whether the information is fit for the decision being made.

For example, reporting unrestricted fund balance as $34,538,423.21 is more precise than reporting $34.5 million.

But does the extra precision actually help the person making the decision?

If it doesn't, you may be spending valuable staff time chasing a level of precision that doesn't provide much additional value. Because, honestly, people think in ballpark terms; we, as a species, love to estimate.

So ask the question throughout your reporting process:

Are you spending time measuring things more precisely than your stakeholders actually need?

You Have to Trust Your Data

Now it's time to dive into analytics. Analytics is only as good as the information behind it. And this is where things can get... messy.

In Using Data in Your Local Government: A Guide for Beginners, Pfeiffer notes that various departments may track the same information differently. Older systems may not communicate easily with one another. And limited staff and resources can make data management difficult.

Sound familiar?

You might have one department calling something a "service request" while another calls it a "work order."

One system might define an active account differently than another.

Someone may be maintaining a critical spreadsheet on their desktop.

And suddenly you're trying to create a report that combines information from all three.

That's what we call a data governance problem.

So before you build a fancy Excel spreadsheet or dashboard, ask some less-fancy questions:

• Who owns this data?

• Where does it come from?

• Who enters it?

• How often is it updated?

• What does each field actually mean?

• Are different departments using the same definitions?

• Can the data be reconciled to your financial system?

• Can you trace the number back to its source?

Because a beautiful dashboard displaying questionable data is still displaying questionable data. Gotta get that part right, first.

Then, you can trust the data enough to analyze it.

Let Your Data Tell You Where to Focus

GFOA's The Post Pounder Test: Applying Materiality in Sweet Grass County describes how a small Montana county reconsidered a $5,000 capitalization threshold after recognizing how much staff time was being spent tracking relatively small assets. The case study demonstrates how analyzing the distribution of asset values can help finance teams determine where additional accounting effort actually provides value.

Some data follows a relatively normal distribution. Other data follows a Pareto pattern (the 80/20 rule), where a relatively small number of items account for a large percentage of the total value. In other words, an uneven distribution where roughly 80% of results come from 20% of the inputs.

GFOA's materiality research recommends looking at the shape of your data when deciding where greater precision is worthwhile. 

In other words, where is the work actually creating value? What data points move the needle? What makes the most impact? Those are the questions analytics can answer.

Instead of treating every transaction, asset, accrual, or record exactly the same, you can analyze your data to identify where the dollars are concentrated and where additional precision actually changes the picture.

Maybe you've been spending a particular amount of money on a project that causes more service workload. Maybe depreciating assets is costing more than you thought. Maybe you've chased community event numbers for no real return. 

The point is that looking at your current data can:

1. Tell you what's going on.

2. Shine a light on what you don't know (and you can determine if it is valuable to measure it).

In Using Data in Your Local Government: A Guide for Beginners, Marc Pfeiffer explains that municipalities already have valuable information sitting in their existing systems. Building permits can provide insight into economic activity. Service requests can show which neighborhoods need attention. Budget records reveal spending patterns. Infrastructure reports can tell you about road and utility conditions.

The trick is connecting that information to real questions.

For example:

• Which streets generate the most pothole complaints?

• Where are service requests concentrated?

• Are water-usage patterns changing?

• Which assets are costing the most to maintain?

• How are permit applications trending?

• Where are emergency calls concentrated?

• Which services are being used most frequently?

Pfeiffer gives a practical example involving water usage: analyzing usage patterns can help a community identify leaks faster and potentially save money. He also points to vehicle maintenance records as a source of information for improving maintenance practices and capital-equipment planning.

The point is that your data isn't only useful when you're preparing the annual financial report.

It can help you run the government more effectively.

Start Small With Performance Measures

You don't need 147 KPIs (even if you may want them).

Stephanie Dean Davis's ICMA Research report Strategic Planning in Small Communities: A Manager's Manual recommends starting with 10 or fewer measures when developing performance-management capabilities. It also recommends identifying 5 to 7 comparable communities and collecting information that answers frequently asked questions from elected officials and department heads.

That's a much more feasible starting point!

Davis breaks measures into 3 useful categories:

1. Workload

What are you doing?

Examples include:

• Calls received

• Work orders completed

• Zoning applications processed

• Permits issued

2. Efficiency

How much does it take to do it?

Examples include:

• Cost per job

• Cost per capita

• Applications per analyst

• Building permits per inspector

3. Outcome

What difference did it make?

Examples include:

• Resident satisfaction

• Program impact

• Response times

• Achievement of a service target

Her research recommends collecting 3 to 5 years of data so you can determine whether activity is increasing, decreasing, or remaining relatively stable.

Connect Your Data to Your Strategic Plan and Budget

Data becomes significantly more useful when it connects to what your organization is actually trying to accomplish.

In Strategic Planning in Small Communities: A Manager's Manual, Davis found that strategic plans played a central role in organizational decision-making: 83% of respondents said their plan guided work priorities, 79% said it helped shape budget requests, and 85% said it supported managers in allocating staff and financial resources.

But only 14.3% of communities with a strategic plan had reached the point where the plan was complete, funds had been appropriated to strategic priorities, and performance measures were being used to track those goals.

That's a significant gap between planning and measuring...

A strategic plan shouldn't live in a binder, apart from the budget, apart from performance measures.

Instead, those 3 things should work together in a process that looks something like this:

Goal → Strategy → Budget → Activity → Measure → Result

With that, you have a lot more information AND can tell a much better story. Instead of saying, "We spent $500,000 on this program," you can say:

"We invested $500,000 in this program because it supports this particular strategic priority. Here's what we accomplished, here's what it cost, here's how that compares with previous years, and here's what we're changing next and why."

That's reporting with a narrative. And you still got to use numbers (Yay!). 

A Note on Benchmarks

Analytics also gives you the ability to ask "How are we doing compared with similar communities?"

Davis recommends identifying 5 to 7 benchmark communities based on factors like population, budget, services, geography, or competition for employees and businesses.

But be careful with benchmarking.

A number without context can be very misleading.

The 2025 Utility Fee Survey Results report from Utility Information Pipeline provides a great example. The survey includes data from 124 participating utilities and reports substantial ranges across different fees. Residential water tap fees, for example, ranged from $25 to $25,754!

That doesn't mean the utility charging $25 is doing something wrong while the one charging $25,754 is making a killing.

There may be significant differences in community or system size, cost structure, geography, payment methods, policies, and methodology.

Methodology just means the big-picture strategy and reasoning behind why you choose specific tools and steps to complete a project or report. The survey itself demonstrates the importance of methodology by explaining how certain outliers and fee structures were handled when presenting the data.

One of the strongest lessons comes from the National Rural Water Association's 2025 Annual Report. It shows the importance of distinguishing estimated results from verified results.

NRWA reported $6.55 million in estimated energy savings if recommendations were implemented, compared with $394,540.52 in actual savings documented through follow-up visits.

That's a huge difference...

The same principle applies to local governments.

• If something is projected, call it projected.

• If it's estimated, call it estimated.

• If it's verified, show how it was verified.

So make sure you're comparing yourself to another organization just like yours (as much as possible, at least) so you don't strive for the wrong number.

The NRWA report also provides a good example of documenting methodology. It explains, for example, that systems receiving assistance were counted only once regardless of how many times they received assistance.

That may seem like a footnote, but it's exactly the kind of detail that helps an auditor, governing board member, or resident understand what a number actually represents. And it can be a factor in changing your decision about something.

The National League of Cities' State of the Cities 2026 report provides an excellent example of why methodology is important. NLC used multiple sources to examine municipal priorities, including mayoral speeches, a mayoral survey, and public-engagement data. The 3 sources identified many of the same broad priorities, but the rankings differed depending on the methodology.

That's not necessarily a problem. In fact, it's useful. Different methods can reveal different things.

The point is that the NLC explains how its data was collected, including the number of survey responses and the limitations of its social-media analysis.

A percentage without context can tell a very different story than a percentage with context. You want to make sure that you control the narrative instead of people misinterpreting the data.

If you're presenting a number to your governing board, be prepared to answer:

• How many observations went into it?

• Where did the data come from?

• What time period does it cover?

• How was it calculated?

• What assumptions were made?

• What are its limitations?

Transparency isn't just about showing the number; it's about showing people how much confidence they should place in the number.

Reporting Shouldn't Be a Once-a-Year Event

A report that's technically correct but 6 months old isn't always helpful to someone trying to make a decision today.

GFOA's The Speed We Need: Unlocking the Secrets of the Accelerated ACFR specifically explores how governments can improve the timeliness of annual financial reporting without sacrificing reliability. GFOA's broader work on timely financial reporting makes the same basic point: financial information is more useful when decision-makers receive it while they can still act on it.

And performance reporting can be much more frequent.

Davis's Strategic Planning in Small Communities: A Manager's Manual highlights several communities that have built recurring reporting into their processes. Rolesville, North Carolina, updates a staff progress report 3 times a year and includes it in board agenda materials and public postings. Lindenhurst, Illinois, maintains an online dashboard showing goals, completion percentages, and notes, with monthly updates for elected officials and the public.

The point is to establish a reporting cadence that keeps information useful and relevant.

Use Analytics to Ask Better Questions

Ultimately, analytics isn't about making prettier charts. It's about improving the questions your organization asks.

Instead of asking "How much did we spend?" ask "What did we spend it on, and how has that changed?"

Instead of "Are revenues on budget?" ask "What's driving the variance, and is it temporary or structural?"

Instead of asking "How many service requests did we receive?" think "Where are they concentrated, what types are increasing, and what does that tell us about community needs?"

Instead of "How does our utility compare with others?" ask "Which communities are genuinely comparable to ours, and what explains the differences?"

Instead of wondering "Can we get this report?" ask "What decision will this report help us make?"

That last question may be the most important one of all.

Pfeiffer makes a similar argument in Using Data in Your Local Government: A Guide for Beginners. He recommends starting with small, manageable projects tied to specific problems rather than trying to transform the entire organization at once.

That's good advice.

You don't need to answer every question. Start by answering one important question better.

Building a Better Data Foundation

You don't have to transform your government into a Silicon Valley startup to become more data-driven. The research consistently points in a much more practical direction.

Start with what you already have.

Marc Pfeiffer's Using Data in Your Local Government: A Guide for Beginners recommends starting by understanding the information your organization already collects. Talk with department heads. Identify existing systems. Look for opportunities to share information between departments.

You may already have more data than you realize.

Define your data.

If two departments use different definitions for the same thing, your analytics will have a tough time producing a reliable answer.

Pfeiffer specifically identifies inconsistent data practices between departments as one of the challenges local governments face.

Start small.

Davis's Strategic Planning in Small Communities: A Manager's Manual recommends starting with 10 or fewer performance measures. Pick the questions people are already asking.

Connect financial and operational information.

A financial number becomes much more useful when you can connect it to the service or outcome it supports.

That's the basic idea behind GASB's SEA framework: connect the resources used to the services delivered and the results achieved.

Look for patterns.

Use trends, distributions, benchmarks, and comparisons to determine where your attention is most valuable.

GFOA's recent materiality articles demonstrate how analyzing the distribution of data can help finance professionals identify where additional precision is worthwhile and where it may not be.

Document your methodology.

If you estimate something, explain that it's an estimate. If you benchmark something, explain who you benchmarked against and why. If you calculate a percentage, know the details.

NRWA's 2025 Annual Report and NLC's State of the Cities 2026 both provide strong examples of being transparent about methodology and limitations.

Create a reporting cadence.

Don't wait for year-end to discover something important that happened in March.

Recurring reporting keeps strategic priorities and performance visible. Davis's research provides examples ranging from monthly dashboards to quarterly and three-times-a-year progress reporting.

Build the practice into your organization.

Data shouldn't live in one person's head or one person's spreadsheet.

Pfeiffer recommends building data capacity into the team's mission, identifying champions, engaging staff and residents, and sharing successes to build support for continued improvement.

The Goal is Better Decisions

There's a temptation to think becoming "data-driven" means collecting more information, creating more dashboards, and producing more reports.

But the research suggests something different.

The goal is not more data.

The goal is better decisions supported by trustworthy information.

• GFOA's Materiality as a Process argues that reporting effort should be aligned with decision relevance.

• GFOA's Close Counts takes that a step further, arguing that estimates can be appropriate when they provide sufficient accuracy for decisions without requiring disproportionate effort.

• GASB's Suggested Guidelines for Voluntary Reporting—SEA Performance Information reminds us that traditional financial statements aren't designed to tell us whether government services actually achieved their intended results.

• And Marc Pfeiffer's ICMA article Using Data in Your Local Government: A Guide for Beginners makes the practical case that much of the information needed to answer those questions is already sitting inside your government.

• Meanwhile, Davis's Strategic Planning in Small Communities: A Manager's Manual demonstrates what happens when governments connect strategic priorities, budgets, performance measures, and recurring reporting.

So, the next time you're staring at a spreadsheet full of numbers, ask what story they're telling.

• What changed?

• Why did it change?

• Who needs to know?

• What does it mean for your community?

And most importantly: What decision should you make because of it?

That's where data, reporting, and analytics come together to build a better future for your organization. 

How We Can Help

VIP Budgeting & Analytics bridges the gap between complex financial numbers and a clear narrative. It pairs directly with VIP Accounting to deliver a user-friendly, highly sophisticated budgeting and financial analytics platform. By creating a single source of truth across the entire organization, the software replaces manual spreadsheets with streamlined workflows, line-item worksheets, and decentralized department entry.

Finance teams can perform precise personnel budgeting down to individual pay codes, run multi-year historical trend analyses, and test interactive "what-if" scenarios. Built-in visual tools (like customizable drag-and-drop dashboards, an Excel Designer, and real-time single-click reporting) allow staff to generate polished, easily understood financial statements instantly. Automated delivery then schedules and distributes these reports via email or dashboards in PDF, Excel, or Word formats, saving hours or even weeks of administrative effort.

Sources:

• ICMA & SAS - "Smart Communities and Data Analytics Report"

• ICMA - "Strategic Planning in Small Communities: A Manager's Manual

• ICMA's PM Magazine - "Using Data in Your Local Government for Beginners"

• GASB - "Financial Reporting Framework Requirements for State and Local Governments: Evaluating GAAP Choice"

• GASB & SEA - "The Governmental Accounting Standards Board’s Suggested Guidelines for Voluntary Reporting SEA Performance Information"

• GASB - Governmental Accounting Standards Series - Implementation Guide No. 2025-1, Implementation Guidance Update—2025

• NRWA - 2025 Annual Report

• Sophos - "The State of Ransomware in State and Local Government 2024"

• Utility Information Pipeline - "2025 Utility Fee Survey Results"

• GFOA - "Materiality as a Process"

• GFOA - "ABCD: ACFRs, Budgets, Civics, and Democracy"

• GFOA - "Where Does It Go? Using a Decision Tree to Apply GASB Statement No. 103 in Proprietyary Funds"

• GFOA - "Close Counts: Expanding the Use of Estimates for Better, Faster Financial Reporting"

• NLC - "State of the Cities 2025" or PDF

• NLC - "State of the Cities 2026"