Should university administrators share official matters with students? Should the department share the departmental problems (financial, officials, political, etc) with the students? or it is official matter and none of their business?

For a more specific example. Imagine that students are complaining about the lack of teachers in specific topics. The department head tries to secure fund for faculty recruitment, but Dean refuses. Should the department head consider this as an internal matter between officials or should inform the students why he is not hiring teacher?

Of course, I do not mean organizational secrets. Most of these news spread among students through rumors and gossip. My question is: should a department head directly inform the students about problems? Or according to the common business models, an organization should not reveal its failures and problems to customers unless it is a must?

What is the appropriate scheme for treating students? (1) customers who get service from the university employees in return to tuition fee, or (2) part of the organization? Obviously, these are not solid categories, and I just want to express the issue.
I think a department should share information with students that can affect them. A non-hire of faculty doesn't affect students directly unless the students were recruited to the department with the promise of expanding in a certain area, and then this fell through. 

But I don't know of a single department that would make such a promise to incoming students (and certainly not undergraduates). 

On the other hand, if the department experiences a shortfall in funding that means that they have to change how they fund students, then these students must be informed as soon as possible since this materially affects them. 

Apart from these cases, one can certainly make the argument that sharing relevant information with students helps foster an atmosphere of collegiality and gives the students a sense of belonging. Within reason...