Massachusetts will become the first state in the nation to require independent third-party disclosure of campaign finance activity by candidates.

The new legislation, which was signed into law by Gov. Charlie Baker on Nov. 26, requires banks to file monthly disclosure reports and transfers approximately 600 additional candidates to the bank reporting system. They join approximately 900 candidates and committees currently in the system.

This independent third-party campaign finance filing process – called “the depository system” – ensures accuracy and requires monthly public disclosure of activity, the state’s campaign finance watchdog said in a statement.

“The public will see the data more frequently, and candidates can feel comfortable that their reports are accurate,” Michael Sullivan, director of the Office of Campaign and Political Finance, said in a statement. “Because reports are filed monthly by a third party, OCPF’s auditors can quickly identify any issues and work with candidates to fix them.”

Nearly 500 House and Senate candidates will transition into the depository campaign finance reporting system, as well as about 100 mayoral candidates in cities with 65,000 or fewer residents. The transition will happen between now and early 2020.

In the depository system, candidates file reports that list contributors, while banks file reports that itemize expenditures and provide a summary of receipts for the month. OCPF, an independent state agency, reconciles the reports and posts them instantly on the web at ocpf.us.

The depository system is already in place for more than 900 candidates and committees, including statewide candidates, mayoral and city council candidates in cities with populations of 65,000 or more, county candidates and political action committees.

Prior to the recent change in the law, House and Senate candidates, as well as mayoral candidates in smaller cities, filed campaign finance reports in the non-depository system. In this disclosure process, candidates itemized all receipts and expenditures on campaign finance reports, but there is no third party to verify the accuracy of the information that is on display for the public.

“The non-depository system is a system that is, frankly, subject to human error and is inadequate,” Sullivan said. “Candidates report receipts and expenditures, and OCPF displays those reports on our website, but there was no mechanism to ensure that the activity in those reports was accurate.”

In the non-depository system, candidates can make small mistakes that compound over several years, causing discrepancies between the balances disclosed on campaign finance reports and the actual balance in the bank account.

“Working with the candidates and banks, OCPF will be able to assist in rectifying these mistakes as they happen,” Sullivan said in his statement. “This new legislation is good public policy, not only for public disclosure, but also for candidates.”

With the depository system, banks file expenditure reports by the 5th of each month, itemizing all expenditures and providing a summary total of all deposits made during the month. Candidates file deposit reports shortly after making a deposit, listing their contributors. OCPF reconciles the expenditure reports with the deposit reports, and displays the activity on the agency website.