Wiley GAAP for Governments 2019

10THE IMPORTANCE OF BUDGETS TO GOVERNMENTS

• Introduction
• Budget Background
  • Executive Budget
  • Appropriated Budget
  • Nonappropriated Budget
  • Budgetary Execution and Management
  • Budget Amendments
  • Budgetary Reporting
• Which Funds of the Government Adopt Budgets?
  • General Fund
  • Special Revenue Funds
  • Capital Projects Funds
  • Debt Service Funds
  • Proprietary Funds
  • Fiduciary Funds
• Differences between the Budget and GAAP
  • Basis of Accounting Differences
  • Timing Differences
  • Perspective Differences
  • Entity Differences
• Budgetary Control
• Summary

INTRODUCTION

Almost all organizations—governmental, commercial, or not‐for‐profit—operate using some form of budgeting to ensure that resources are used in accordance with management’s intentions and to facilitate obtaining results of operations consistent with management’s plans. In the governmental environment, budgets take on greater importance, because they provide the framework in which public resources are spent. From an accounting and financial reporting viewpoint, budgets in government are a key component in achieving the accountability objective described in Chapter 2. Budgets in government generally represent adopted law, which is far more significant than simply a financial planning tool. Because many governments do not follow GAAP to prepare their budgets, achieving the accountability objective by comparing a non‐GAAP‐based budget with GAAP‐based results presents some unique challenges. GASBS 34 affirmed the importance of budgetary ...