Definition
GASB Statement 34 requires a budgetary comparison for the general fund and for each major special revenue fund that has a legally adopted annual budget. The schedule shows the original budget, the final amended budget, and actual amounts on the budgetary basis. A government may present it as required supplementary information after the notes, or as a basic financial statement. When the budgetary basis differs from GAAP, the government reconciles the two.
Why it matters in an audit or review
Where the schedule is required supplementary information, the auditor does not opine on it. Under AU-C 730 the auditor applies limited procedures, such as inquiring about preparation methods and comparing the information with the financial statements, and reports on it in an other-matter paragraph. If it is a basic statement, it is audited. Auditors also read budget laws to see whether spending exceeded appropriations, which can be a legal compliance finding.
Example
Illustrative: the final general fund budget for public safety is $3,200,000 and actual expenditures are $3,350,000. The variance is $150,000 over budget, and the auditor asks whether the overspending violated the legal level of control.
Common mistakes
- Showing only the final budget without the original.
- Omitting the reconciliation to GAAP when bases differ.
Sources
- GASB Statement No. 34, budgetary comparison requirements; GASB Codification Section 2400, Budgetary Reporting: https://www.gasb.org
- AICPA, AU-C Section 730, Required Supplementary Information
Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error