Finance

Issue

Which funds require budgetary comparisons and budget to actual reconciliation?

Reference

GASB Statement 34, 130: "Budgetary comparison schedules should be presented as RSI53 for the general fund and for each major special revenue fund that has a legally adopted annual budget. The budgetary comparison schedule should present both (a) the original and (b) the final appropriated budgets for the reporting period as well as (c) actual inflows, outflows, and balances, stated on the government's budgetary basis.54 A separate column to report the variance between the final budget and actual amounts is encouraged, but not required. Governments may also report the variance between original and final budget amounts."

53 Governments may elect to report the budgetary comparison information in a budgetary comparison statement as part of the basic financial statements, rather than as RSI. If presented, the additional statement should include the same items of information that paragraphs 130 and 131 require to be displayed or disclosed.
54The budgetary basis of accounting is discussed in NCGA Statement 1, paragraph 154.

GASB Statement 34, 131, as amended by GASB Statement 37, 19: "Governments may present the budgetary comparison schedule using the same format, terminology, and classifications as the budget document, or using the format, terminology, and classifications in a statement of revenues, expenditures, and changes in fund balances. Regardless of the format used, the schedule should be accompanied by information (either in a separate schedule or in notes to RSI) that reconciles budgetary information to GAAP information, as discussed in NCGA Interpretation 10, as amended by this Statement. Notes to RSI should disclose excesses of expenditures over appropriations in individual funds presented in the budgetary comparison, as discussed in NCGA Interpretation 6, paragraph 4, as amended by this Statement.56"

Position

Budgetary comparisons:

• The only governmental fund that qualifies as a major fund is the General Fund.
• A budgetary comparison is only required for the General Fund.
• No comparison is required for proprietary funds, even if major.
• No comparison is required for non-major funds. However, comparisons for nonmajor funds will be presented as supplementary information. These comparisons will present the final budget, actual amounts and a variance column.
• The budgetary comparison for the General Fund will be presented as a statement as part of the basic financial statements, rather than RSI.
• The budgetary comparison for the General Fund will include the three required columns: original budget, final budget, and actual results. A fourth column will be presented to reflect the differences between the final budget and the actual amounts.
• The budgetary comparison will use the same format, terminology and classifications as the statement of revenues, expenditures and changes in fund balance (as currently presented).

Budget to Actual Reconciliation:

• GASB Statement 34 requires a reconciliation if differences between budget information and GAAP (actual) information arise due to:
  1. entity differences (for example, a component unit is included whose activities are not part of the appropriated budget.
  2. perspective differences (for example, budgetary information prepared on a program basis vs. by fund).
  3. basis differences (using cash basis for budgeting, but modified accrual for financial reporting).
  4. timing differences (for example, due to continuing appropriations or biennial budgeting)
• No such differences exist in a budgetary comparison for the General Fund.
• Modified accrual basis is used by Miami-Dade County. Appropriations lapse at the end of the fiscal year. Ending encumbrances are re-appropriated the following year. The budgetary expenditures represented by the encumbrances are reflected in the budget in the same year that the expenditures are shown in the (GAAP) statement of operations.
• There is no reconciliation required between the budget information and actual GAAP information.