Best Practices

Accurately Displaying Total Expenditures in Budget Presentations (Budget Consolidation)

Governments should ensure that their entity-wide budget totals reflect real economic activity and that material double-counting does not occur, and to safeguard against double counting.

Accounting standards require items to be recorded in separate funds, but for reporting purposes, interfund activity is eliminated from government-wide financial statements. Similarly, many state, provincial, and local governments present their budgets by fund. However, there is little guidance on whether or how to eliminate double-counting from entity-wide consolidated budget totals. Without careful consideration of the treatment of interfund activity within the budget presentment, the casual user may misunderstand the size of the budget or scale of the interfund activity. When presenting the consolidated budget, determining what amounts should be excluded from this number can change the total by a significant amount.

Double-counting occurs for a variety of reasons: interfund transfers, internal service funds, and even, at times, because enterprise funds provide services to the government unit as a part of their customer base. Accounting decisions to record revenue in one fund and then transfer it to another fund for spending should not show a total economic activity that doubles the correct number. Similarly, periodic accounting or regulatory changes that require a different accounting treatment to move funds through various accounts should not result in increased summary budget totals. Otherwise, a casual user of these budgets might reasonably conclude that the total economic impact of a government’s spending is the falsely inflated budget total. 

GFOA recommends that governments ensure that their entity-wide budget totals reflect real economic activity and that material double-counting does not occur. To safeguard against double counting, governments should observe the following factors:

  1. Identification. Identify items that may be appropriated twice (e.g. interfund transfers, internal service funds). Determine how your organization uses internal service funds. Government-wide services may be provided by the organization versus externally (i.e. fleet, warehouse, and print/mail/graphics). Consider if different uses affect presentation preference for policy and other purposes. Look at the magnitude or size of the double-counted items and determine whether they are relevant or material to the overall budget. Consider any ramifications of the double-counting.
  2. Requirements. Determine whether there are statutory requirements or state and provincial guidance for reporting the total budget, or any other legal rules, forms, and formats regarding presentation of budgets consistent with such statutory reporting.
  3. Presentation. Determine the presentation preference for the organization. Consider how information may be interpreted by different audiences. Investigate how other peer governments report and present double-counting transactions in their budgets.
  4. Transparency. Be transparent and consistent in presentation. Provide a written explanation in non-technical terms with the presentation. This may include presenting the total budget with the identified items and then net those items with an explanation.


  • Board approval date: Wednesday, January 27, 2016