Because of state and federal funding rules, local governments are generally not only already providing detailed public accountings in documents that nobody bothers to read, but also providing detailed reports of their spending and revenue to state and federal authorities (who periodically audit parts of them) as a condition of basic funding. They absolutely can and do track income and expenses at very fine levels, and report them with very fine breakdowns (often different breakdowns of the same spending representing different control agencies demands.)
The smaller you are, the more "downhill" you are from the folks making the important regulations, and the more you're required to adhere to strict and closely monitored books. (Corruption still happens, of course, but at least there are numbers that add together and some form of reasonable audit trail for financial events. And don't get me started about whether or not good accounting principles have anything at all to do with good governance)
ADD: Here's a link for reference: http://www.cnn.com/2016/08/23/politics/us-army-audit-account...
(I could also tell personal stories from my time with the federal government, and there are plenty more links to find for those interested. The point is that more political power and money movement, at least in the states, usually is associated with fewer and less reliable financial controls, which is counter-intuitive)
I get the impression there are swaths of the HackerNews audience who have no idea how "the other half" lives in places outside of the major urban centres.
But they're still required to file everything properly, no matter how complex their personal/business taxes get.
That's one local government of tens of thousands. I'd be less optimistic about, say, a rural county in West Virginia, or something like that, having anything like proper financial records and the motivation to provide them.
The kind of governments I'm skeptical about aren't hugely important for a top-down analysis of the country's finances simply because they're financially the least wealthy. What I'm surprised about is how optimistic everyone is about the nation's recordkeeping and how everyone assumes that every government works roughly the same way. I've heard horror stories about counties that cannot even keep track of who owns what land/mineral rights, and sometimes have their own corrupt reasons for not trying very hard. The world will need to change before some of those places are motivated to improve.
(don't forget the counties!)
The reason that cannot work is that when you get below the state level, you're dealing with governments that might or might not have enough money and motivation to do proper accounting, staffed by people who might or might not have actually gone to college.
Mandating they contribute to the "national spreadsheet" would represent an unprecedented imposition on local governments. Not that it's necessarily a bad idea, but I'm guessing it's unconstitutional if it comes from the federal government.