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Municipal Securities and Continuing Disclosure During COVID-19

Budget Reporting
Financial Reporting
municipal building
4 min read
Published: August 3, 2020
Last Updated: April 25, 2023

Regulators have made it clear that issuers of municipal securities need to let investors know how they're riding out the risks posed by COVID-19.

Robust, timely, and accurate municipal issuer disclosures have become even more important during the pandemic, Securities and Exchange Commission Chairman Jay Clayton and Rebecca Olsen, Director of the Office of Municipal Securities, noted in a public statement May 4.

There are roughly 1 million or so municipal securities outstanding, according to the Municipal Securities Rulemaking Board (MSRB). Through the end of May, MSRB identified about 7,400 disclosures referencing COVID-19, including more than 5,000 that came as a form of continuing disclosure.

What's in it for cities and states

The thought of publishing financial information more frequently could be stressful for state and local government teams who are already struggling to complete an annual comprehensive financial report (ACFR) on time. But, there are plenty of benefits to disclosing more information. 

1. Stay on investors' side

Buy-side analysts said issuers who don't disclose updated snapshots of their financial situation risk falling out of investment portfolios because there's no way for analysts to weigh the risk of your securities. That was the discussion at an SEC conference in June on secondary market disclosures.

One senior investment professional said that today, she'd rather own weaker credit with robust disclosure than credit with a higher rating that gives her nothing to help analyze risks and determine the proper pricing.

2. Own your narrative

Investors who can't find updated financial information on EMMA, designated by the SEC as the official source for municipal securities data and disclosures, will go looking for it to evaluate how well you'll be able to weather the pandemic and meet financial obligations. Speakers at the SEC's June conference shared stories of manually hunting down news articles or notes of public meetings to see what elected leaders were saying publicly. 

When Sugar Land, Texas, Director of Finance Jennifer Brown mentioned her city posts monthly unaudited financial statements online, one portfolio manager called it "music to my ears."

3. Build trust

You may already be preparing much of this information about COVID-19 responses to help state and federal agencies assess the impact of the pandemic. Share these updates with taxpayers to build trust with them as well.

A cheat sheet of what municipal issuers can disclose

Forward-looking statements are especially helpful as state and local governments and institutions of higher education respond to COVID-19. Include cautionary language, and note that your statements are based on estimates, with information about how you arrived at those assumptions, Chairman Clayton and Director Olsen said in the May 4 statement. Read the full statement for details, but they suggested you could consider disclosing:

1. COVID-19 consequences

Talk about how COVID-19 is affecting operations and your financial condition. Several states have revised their budgets to reflect forecasts for lower revenues, delays in collecting revenue, and unforeseen costs of fighting the novel coronavirus.

2. Sources of liquidity

Note your access to funds or loans, your ability to make debt service payments, and the availability of federal, state, or local aid.

3. Other public statements and reports

Consider making reports that you prepare for governance purposes more readily accessible to investors.

Take it to the next level

Investors want timely data and insights, and they want to see consistent disclosures across EMMA, your own website, and what leaders say in town halls or news conferences. Meanwhile, your state and local leaders may need greater visibility into the numbers you provide. Workiva can help on all fronts.

The data you want, whenever you want it

The Workiva connected reporting platform enables you to automatically connect data directly from source systems to spreadsheets and reports. That saves time, reduces the risk of error from manually copying and pasting data, and can help you refresh budget books and forecasts faster.


By linking data from a source document across financial statements, budget books, news releases, and presentations that you build in the Workiva platform, you can promote consistent messaging. 

X-ray vision for transparency into the entire reporting process

Automatic audit trails within Workiva solutions capture revisions while blacklines help you quickly see what has changed between different versions of a document. Embed comments, so collaborators can track questions and responses.

Municipal issuers are facing tremendous challenges none of us could have seen coming, and keeping constituents informed of rapidly unfolding developments helps build trust. Request a demo of Workiva to start exploring how we can help. 

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