State fiscal reporting requirements also affect local
government budgeting. To ensure uniform practices
and to improve fiscal management of local governments,
states require general fiscal reporting, bookkeeping,
accounting, and auditing standards.
Historically, states required itemized budgets and
detailed information to improve local governments’
administration and operations. Revenue and borrowing
provisions were enacted as constraints on
local government spending. Financial reporting provisions
also serve administrative functions for local
governments and to provide information to the public.