Final answer:
The federal government is planning a review of Arkansas's budget to assess changes in spending due to policy shifts and unforeseen events. This analysis will look at the allocation of funds and ensure they align with policy objectives. Differences between federal and state budgets are notable, with local needs and fiscal situations heavily influencing state budgets.
Step-by-step explanation:
The federal government is planning to conduct a review of Arkansas’s budget plans over the past five years. All levels of government—federal, state, and local—have budgets that outline expected revenue from taxes and other sources, and how this income will be spent. These budgets can undergo significant changes due to policy decisions and unexpected events which may disrupt planned tax and spending allocations. The process of reviewing a state's budget involves analyzing expenditures to understand how funds have been allocated over a certain period and how those allocations align with the intended policy goals and priorities.
State and local budgets can be very different in structure and priorities compared to the federal budget, which was $3.8 trillion in 2016. While federal budgets are often drafted with a keen eye on long-term priorities and political considerations, state budgets often respond more directly to local needs and immediate fiscal situations. Disruptions to budget plans can arise from various circumstances, which makes the review process by other levels of government, like the federal government, a necessity to ensure funds are being used as intended.