Government-wide financial statements are your key to finding out how your state and local governments spend their money. These statements use standardized accounting guidelines set by the Government Accounting Standards Board to help you make across-the-board comparisons of publicly funded activities, from building roads to feeding schoolchildren.

Comparing Apples to Apples

All state and local government entities, right down to local school boards and public utilities, prepare their financial statements according to the guidelines of the Governmental Accounting Standards Board, which issued its first rules in 1999. Like the guidelines that the Securities & Exchange Commission uses to govern the financial statements of publicly traded companies, the GASB rules are designed to make it possible to compare government entities to one another as well as over time. Traditional government accounting practices reported on various funds -- or blocks of monies used for specific purposes -- by lumping them together into fund types. Under this system, comparisons were very difficult.

Activities and Assets

A government-wide financial statement has two parts: a Statement of Net Assets and a Statement of Activities. In the Statement of Activities, you can see the trends in fund expenditures over time as well as where the revenue comes from. For instance, program-related revenues may come from the sale of fishing licenses, trash pickup fees and parking tickets. Tax revenues are part of general revenues, a category that may include donations, bond income and other miscellany. The Statement of Activities separates the sources of income into business-related and government-related categories, then combines then to provide a primary government total.

Government Ownership Categories

Not included in the Statement of Activities are the results for fiduciary accounts -- funds the government monitors but does not own, such as pension funds. Accounts that the government owns directly are called proprietary funds. There are also legally separate agencies for which elected officials are financially responsible, such as school boards, utility boards and library foundations, which the GASB calls component units. These are included in the financial statement, but their finances are not combined with primary government activity figures.

Long-Term Assets

Like large companies' financial statements, government statements are done on an accrual basis instead of a cash basis. Thus, the Statement of Net Assets includes long-term assets, such as saleable buildings and unused land. Before the GASB began issuing guidelines in 1999, some government financial reports didn't even include such long-term assets. In a government-wide financial report, the assets are listed in order of how easily they can be sold or otherwise turned into cash -- that is, by their liquidity.