Final answer:
The Governmental Accounting Standards Board (GASB) is responsible for setting accounting and financial reporting standards for state and local governments, including related entities like utilities, hospitals, and educational institutions. The GASB does not oversee federal spending, which is the domain of the U.S. Government Accountability Office (GAO). State and local governments must balance their budgets, and these budgets finance a broad range of public services.
Step-by-step explanation:
The Governmental Accounting Standards Board (GASB) is assigned the responsibility for setting accounting and financial reporting standards for state and local government entities, which include governmentally related units and agencies such as utilities, hospitals, and colleges/universities. The areas covered by GASB standards encompass a broad range of financial elements, such as the management and reporting of public funds, property taxes, and other types of revenue that state and local governments use to fund services and programs. Unlike the GASB, the federal government spending and accountability are overseen by agencies like the U.S. Government Accountability Office (GAO), which serves Congress by investigating federal spending.
All levels of government—federal, state, and local—prepare budgets reflecting expected revenues and planned expenditures. However, only state and local government budgeting falls under GASB's purview. These budgets are used to fund a variety of public services including education, healthcare, and infrastructure. Moreover, unlike the federal government, states must typically adhere to balanced budget laws, ensuring that their expenditures do not exceed their revenues.