State and local governments account for budgeted and actual expenditures to ensure that

State and local governments adopt legally binding budgets and are required to monitor compliance with those budgets. Budget-to-actual comparisons help ensure that public funds are spent only as authorized by the legislative body. This supports the core accountability principle of public sector financial reporting.

While budgets can also support planning and cash flow, the primary purpose of tracking budgeted vs. actual expenditures is legal compliance.

Relevant References:

GASB Statement No. 34 – Budgetary Comparison Schedules

GFOA – Budget Monitoring and Compliance

GAO Red Book – Legal Requirements for Public Spending

Answer: D. spending conforms to legal requirements.