How should a local government report the budgetary comparison schedule if a state law requires that budgets differ from GAAP?

The correct approach for reporting the budgetary comparison schedule when a state law mandates that budgets differ from Generally Accepted Accounting Principles (GAAP) is to present the actual amounts using the government's budgetary basis. This is important because local governments must comply with both the specific requirements of the state law and the need to provide transparency in their financial reporting.

When a government operates on a budgetary basis that differs from GAAP, it is essential to report actual amounts in a way that aligns with the budgetary framework established by the state law. This ensures that stakeholders, including state oversight bodies and the public, can clearly understand how actual financial performance compares to the planned budget within the context of the specific accounting methods being followed. The budgetary comparison is often intended to provide insights into fiscal accountability and compliance with state law, making it vital for those figures to reflect how the local government actually managed its resources according to its budget.

Therefore, reporting the actual amounts on the budgetary basis reflects the local government's adherence to the requirements of the state law while still maintaining meaningful accountability in financial reporting.