ADMINISTRATION > Glossary

A|B|C|D|E|F|G|I|J|L|M|O|P|R|S|T|V|W

ABATEMENT
A complete or partial cancellation of a levy imposed by a government.  Abatements usually apply to tax levies, special assessments and service charges.

ACCOUNTABILITY
The state of being obliged to explain one’s actions, to justify what one does.  Accountability requires governments to answer to the citizenry -- to justify the raising of public resources and the purposes for which they are used.

ACCOUNTING SYSTEM 
The methods and records established to identify, assemble, analyze, classify, record and report a government’s transactions and to maintain accountability for the related assets and liabilities.

ACCOUNT NUMBER 
See Coding

ACCOUNTS PAYABLE
A short-term liability account reflecting amounts owed to private persons or organizations for goods and services received by a government.

ACCOUNTS RECEIVABLE 
An asset account reflecting amounts due from private person or organizations for goods and services furnished by a government (but not including amounts due from other funds or other governments.

AD VALOREM TAX
A tax based on value (e.g., a property tax)

AFDC
Aid to Families with Dependent Children; A Social Services Program.

ALLOT
To divide a budgetary appropriation into amounts that may be encumbered or expended during an allotment period (e.g., a government may choose to allot its annual budget to 12 month periods).  See ALLOTMENT and ALLOTMENT PERIOD.

ALLOTMENT 
A part of an appropriation that may be encumbered or expended during a given period.

ALLOTMENT PERIOD
A period of time during which an allotment is effective.  Monthly and quarterly allotments are most common.

A.N.D.
Aid to Needy Dependents; A Social Services program.

ANNUAL BUDGET 
A budget applicable to a single fiscal year.  SEE BUDGET OR OPERATING BUDGET.

ANNUAL FINANCIAL REPORT 
A financial report applicable to a single fiscal year.

ANNUAL OPERATING BUDGET 
See OPERATING BUDGET

APPROPRIATED BUDGET 
The expenditure authority created by the appropriation bills ordinances, which are signed into law, and the related estimated revenues.  The appropriated budget would include all reserves, transfers, allocations, supplemental appropriations and other legally authorized legislative and executive changes.

APPROPRIATION 
A legal authorization granted by a legislative body to make expenditures and to incur obligations for specific purposes.  An appropriation usually is limited in amount and time it may be expended.

ASSESS 
To establish an official property value for taxation.

ASSESSED VALUATION 
A valuation set upon real estate or other property by government as a basis for levying taxes.

ASSESSMENT 
1.  The process of making the official valuation of property for taxation.
2.  The valuation placed upon property as a result of this process.  See SPECIAL ASSESSMENT.

ASSESSMENT ROLL
With real property, the official list containing the legal description of each parcel of property and its assessed valuation.  The name and address of the last known owner usually are listed.  With personal property, the assessment roll is the official list containing the name and address of the owner, a description of the personal property and its assessed value.

ASSET 
A probable future economic benefit obtained or controlled by a particular entity as a result of past transactions or events.

AUDIT 
A systematic collection of the sufficient, competent evidential matter needed to attest to the fairness of management’s assertions in the financial statements or to evaluate whether management has efficiently and effectively carried out its responsibilities.  The auditor obtains this evidential matter through inspection, observation, inquiries, and confirmations with third parties.

AUDITOR’S REPORT 
In the context of a financial audit, a statement by the auditor describing the scope of the audit and the auditing standards applied in the examination, and setting forth the auditor’s opinion on the fairness of presentation of the financial information in conformity with GAAP or some other comprehensive basis of accounting.

AUTHORITY  
A government or pubic agency crated to perform a single function or a restricted group of related activities.  Usually, such units are financed from service charges, fees and tolls but in some instances they also have taxing powers.  An authority may be completely independent of other governments or be partially dependent upon other governments for its financing or the exercise of certain powers.  See SPECIAL DISTRICT.

BALANCE SHEET
The financial statement disclosing the assets, liabilities and equity of an entity at a specified date in conformity with GAAP.

BASIC FINANCIAL STATEMENTS
Those financial statements, including notes thereto, necessary for the fair presentation of the financial position and results of operations of an entity in conformity with GAAP.  The basic financial statements include a balance sheet, an “all-inclusive” operatingstatement, a budget comparison statement (for all governmental funds for which annual appropriated budgets are adopted) and a statement of changes in financial position (for proprietary funds, pension trust funds and nonexpendable trust funds).

BASIS OF ACCOUNTING
A term used to refer to when revenues, expenditures, expenses, and transfers -- and the related assets and liabilities -- are recognized in the accounts and reported in the financial statements.  Specifically, it relates to the timing of the measurements made, regardless of the nature of the measurement, on either the cash or the accrual method.

BENEFITS 
Payments to which participants may be entitled under a pension plan including pension benefits, death benefits, and benefits due to termination of employment.

BILL 
A term used to denote a law or statute passed by a certain legislative bodies.  A bill has greater legal formability and standing than a resolution.

BUDGET
A plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them.  Used without any modifier, the term usually indicates a financial plan for a single fiscal year.  The term “budget” is used in two senses in practice.  Sometimes it designates the financial plan presented to the appropriating governing body for adoption, and sometimes, the plan finally approved by that body.

BUDGETARY ACCOUNTING
The process of comparing actual expenditures to budgeted amounts.

BUDGETARY ACCOUNTS
Accounts used to enter the formally adopted annual operating budget into the general ledger as part of the management control technique of formal budgetary integration.

BUDGET DOCUMENT
The instrument used by the budget-making authority to present a comprehensive financial program to the appropriating governing body.  The budget document usually consists of three parts.  The first part contains a message from the budget-making authority, together with a summary of the proposed expenditures and the means of financing them.  The second consists of schedules supporting the summary.  These schedules show in detail the past years’ actual revenues, expenditures and other data used in making the estimates.  The third part is composed of drafts of the appropriation, revenue and borrowing measures necessary to put the budget into effect.

BUDGET MESSAGE
A general discussion of the proposed budget as presented in writing by the budget-making authority to the legislative body.  The budget message should contain an explanation of the principal budget items, an outline of the government’s experience during the past period and its financial status at the time of the message and recommendations regarding the financial policy for the coming period.

BUILDINGS AND BUILDING IMPROVEMENTS
A fixed asset account reflecting the acquisition cost of permanent structures owned or held by a government and the improvements thereon.

CAPITAL EXPENDITURES
Expenditures resulting in the acquisition of or addition to the government’s general fixed assets.

CASH BASIS 
A basis of accounting under which transactions are recognized only when cash is received or disbursed.

CERTIFIED PUBLIC ACCOUNTANT (CPA)  
An accountant who has met all the statutory and licensing requirements of a given state for use of that designation.  All U. S. states require accountants, at a minimum , to complete successfully a uniform national examination before being allowed to designate themselves as CPA’s

CHECK 
A Bill of exchange drawn on a bank and payable on demand; a written order on a bank to pay on demand a specified sum of money to a named person, to his ro her order, or to bearer out of money on deposit to the credit of the maker.  A check differs from a warrant in that the latter is not necessarily payable on demand and may not be negotiable.  It differs from a voucher in that the latter is not an order to pay.  A voucher-check combines the distinguishing characteristics of a voucher and a check; it shows the propriety of a payment and is an order to pay.

CLAIM 
(1)Potential losses than can rise from (a) employment (e.g., worker compensation and unemployment), (b) contractual action (e.g., delays or inadequate specifications), © actions of government personnel (e.g., medical malpractice, damage to privately owned vehicles by government-owned vehicles, improper police arrest) and (d) governmental properties (e.g., personal injuries, property damage).  (2) In the context of insurance, a demand for payment of a policy benefit because of the occurrence of an insured event, such as the destruction or damage of property and related deaths or injuries.

COMPENSATED ABSENCES 
Absences, such as vacation, illness and holidays, for which it is expected employees will be paid.  The term does not encompass severance or termination pay, post-retirement benefits, deferred compensation or other long-term fringe benefits, such as group insurance and long term disability.

COST 
The amount of money or other consideration exchanged for goods or services.

CURRENT  
As applied to budgeting and accounting, designates the operations of the present fiscal period as opposed to past or future periods.  It usually connotes items likely to be used up or converted into cash within one year.

DEBT  
An obligation resulting from the borrowing of money or from the purchase of goods and services.  Debts of government include bonds, time warrants and notes.

DEDUCTIBLE 
In the context of an insurance policy with a deductible clause, the amount that first must be subtracted from the total loss incurred before determining the insurers’s liability.  The deductible may be in the form of an amount of dollars, a percentage of the loss, a percentage of the value of the insured property or a period of time (as in health insurance).

DEFERRED COMPENSATION PLANS
Plans that offer employees the opportunity to defer receipt of a portion of their salary and the related liability for federal income taxes.  Several sections of the Internal Revenue Code authorize certain state and local governments to provide deferred compensation plans for their employees.

DEFICIT 
1) The excess of the liabilities of a fund over its assets. 
2)The excess of expenditures over revenues, during an accounting period or, in the case of proprietary funds, the excess of expenses over revenues during an accounting period.
 
DELINQUENT TAXES
Taxes remaining unpaid on or after the date which a penalty for nonpayment is attached.  Even though the penalty may be subsequently waived and a portion of the taxes may be abated or canceled, the unpaid balances continue to be delinquent taxes until abated, canceled, paid or converted into tax liens.

DEPLETION  
The allocation of the cost of wasting assets (e.g., timer, oil, coal) to the periods benefited by their use.

DEPOSITS
In the context of required not disclosures, cash and near cash items placed on account with a financial institution or fiscal agent.  Some deposits (e.g., checking accounts) are subject to withdrawal upon demand without notice or penalty (demand deposits) and others (e.g., certificates of deposit) can only be withdrawn without penalty upon completion of a fixed period (time deposits)

DEPRECIATION  
1)Expiration in the service life of fixed assets, other than wasting assets, attributable to wear and tear, deterioration , action of the physical elements, inadequacy and obsolescence.
2)The portion of the cost of a fixed asset, other than a wasting asset, charged as an expense during a particular period.  In accounting for depreciation, the cost of a fixed asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost.  Through this process, the entire cost of the asset is ultimately charged off as an expense.

DEPRECIATION SCHEDULE 
A schedule listing the annual allocation of the cost of fixed assets to future periods, using one of the depreciation methods acceptable under GAAP.

DISCOUNT  
In the context of bonds payable and investments, the amount by which par value exceeds the price paid for a security.  The discount generally represents the difference between the nominal interest rate and the actual or effective rate of return to the investor.

DUE FROM OTHER FUNDS 
An asset account used to indicate amounts owed to a particular fund by another fund for goods sold  or services rendered.  This account includes only short-term obligations on open account, not interfund loans.

ENCUMBRANCES 
Commitments related to unperformed (executory) contracts for goods or services.   Used in budgeting, encumbrances are not GAAP expenditures or liabilities, but represent the estimated amount of expenditures ultimately to result if unperformed contracts in process are completed.

ENTITY 
1)The basic unit upon which accounting and/or f
inancial reporting activities focus.  The basic government legal and accounting entity is the individual fund and account group. 
2)That combination of funds and account groups that constitutes the reporting entity for financial reporting purposes and alone may issue CAFR’s and CPFS.

ENTRY 
The record of a financial transaction in the appropriate book of account.

EPSDT
Early and Periodic Screening, Diagnosis and Treatment Program: A Nursing Fund program for young children.

EXPENDITURES 
Decreases in net financial resources.  Expenditures include current operating expenses requiring the present or future use of net current assets, debt service and capital outlays, and intergovernmental grants, entitlement and shared revenues.

EXPENSES 
Outflows or other using up of assets or incurrences of liabilities (or a combination of both) from delivering or producing goods, rendering services or carrying to other activities that constitute the entity’s ongoing major or central operations.

FINANCIAL AUDIT 
An audit made to determine whether the financial statements of a government are presented fairly in conformity with GAAP.

FINANCIAL RESOURCES 
Cash and other assets that, in the normal course of operations, will become cash.

FISCAL AGENT 
A fiduciary agent, usually a bank or county treasurer, who performs the function of paying debt principal and interest when due.

FISCAL PERIOD 
Any period at the end of which a government determines its financial position and the results of its operations.

FISCAL YEAR 
A 12-month period to which the annual operating budget applies and at the end of which a government determines is financial position and the results of its operations.

FIXED ASSETS 
Long-lived tangible assets obtained or controlled as a result of past transactions, evens or circumstances.  Fixed assets include buildings, equipment, improvements other than buildings and land.  In the private sector, these assets are referred to most often as property, plant and equipment.

FORECLOSURE 
The seizure of property as payment for delinquent tax or special assessment obligations.  Ordinarily, property foreclosed is resold to liquidate delinquent tax or special assessment obligations, but on occasion governments retain possession for their own needs.

FUNCTION
A group of related activities aimed at accomplishing a major service or regulatory program for which a government is responsible.

FUND
A fiscal and accounting entity with a self-balancing set of accounts in which cash and other financial resources, all related liabilities and residual equities, or balances, and changes therein, are recorded and segregated to carry on specific activities or attain certain objectives in accordance with special regulations, restrictions or limitation.

FUND BALANCE
The difference between fund assets and fund liabilities of governmental and similar trust funds.

FUND TYPE
Any one of seven categories, into which all funds are classified in governmental accounting.  The seven fund types are: general, special revenue, debt service, capital projects, enterprise, internal service, and trust and agency.

GENERAL FIXED ASSETS
Capital assets that are not assets of any fund, but of the government unit as a whole.  Most  often these assets arise from the expenditure of the financial resources of governmental funds.

GENERAL FUND
The fund used to account for all financial resources, except those required to be accounted for in another fund.

GENERAL JOURNAL
A journal in which are recorded all entries not recorded in special journals.

GENERAL LEDGER
A record containing the accounts needed to reflect the financial position and the results of operations of a government.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
Uniform minimum standards and guidelines for financial accounting and reporting.  They govern the form and content of the financial statements of an entity.  GAAP encompass the conventions, rules and procedures necessary to define accepted accounting practice at a particular time.  They include not only board guidelines of general application, but also detailed practices and procedures.  GAAP provide a standard by which to measure financial presentations.  The primary authoritative body on the application of GAAP to state and local governments is the GASB.

GOALS
The purpose toward which an endeavor is directed.

GOVERNMENTAL ACCOUNTING
The composite activity of analyzing, recording, summarizing, reporting and interpreting the financial transactions of governments.

GOVERNMENTAL FUND TYPES 
Funds used to account for the acquisition, use and balances of expendable financial resources and the related current liabilities -- except those accounted for in proprietary funds and fiduciary funds.  In essence, these funds are accounting segregations of financial resources. Expendable assets are assigned to a particular governmental fund type according to the purposes for which they may be used.  Current liabilities are assigned to the fund type from which they are to be paid.  The difference between the assets and liabilities of governmental fund types if referred to as a fund balance.  The measurement focus in these fund types is on the determination of financial position and changes in financial position (sources, uses and balances of financial resources), rather than on net income determination.  The statement of revenues, expenditures and changes in fund balances is the primary governmental fund type operating statement.  It may be supported or supplemented by more detailed schedules of revenues, expenditures, transfers and other changes in fund balance.  Under current GAAP, there are four governmental fund types: general, special revenue, debt service, and capital projects.

GRANTS
Contributions or gifts of cash or other assets from another government to be used or expended for a special purpose, activity or facility.

INCOME 
A term used in proprietary fund-type accounting to represent (1) revenues or (2) the excess of revenues over expenses.

INDEPENDENT AUDIT
An audit performed by an independent auditor

INDEPENDENT AUDITOR
An auditor meeting the independent criteria set forth in GAAS or GAGAS.

INSURANCE
The transfer of risk or loss from one party (the insured) to another party ( the insurer) in which the insurer promises (unusually specified in a written contract) to pay the insured (or others on the insured’s behalf) an amount of money (or services, or both) for economic losses sustained from an unexpected (accidental) event during a period of time for which the insured makes a premium payment to the insurer.

INVENTORY
1)A detailed list showing quantities, descriptions and values of property and, frequently, units of measure and unit prices. 
2)An asset account reflecting the cost of goods held for resale or for use in operations.

INVESTMENTS
Most commonly, securities and real estate held for the production of revenues in the form of interest, dividends, rentals or lease payments.  The term does not include fixed assets used in government operations.

IV-D
A Social Services program dealing with child welfare of divorced households.

JOINT VENTURE
A legal entity or other contractual arrangement in which a government participates as a separate and specific activity for the benefit of the pubic or service recipients and in which the government retains an ongoing financial interest.

JOURNAL 
A book of original entry.

LEAP
Low Income Energy Assistance Program: A Social Services program to deal with payments for heat for low income clients.

LEDGER
A group of accounts in which are recorded the financial transaction of an entity.

LEVY
1)(Verb) To impose taxes, special assessments or service charges for the support of government activities. 
2)Noun.  The total amount of taxes, special assessments or service charges imposed by a government.

LIABILITIES
Probable future sacrifices of economic benefits, arising from present obligations of a particular to transfer assets or provide services to other entities in the future as a result of past transactions or events.

MACHINERY AND EQUIPMENT 
Property that does not lose its identity when removed from its location and is not changed materially or consumed immediately (e.g., within one year) by use.

MAINTENANCE 
The act of keeping capital assets in a state of good repair.  It includes preventive maintenance; normal periodic repairs; replacement of parts, structural components and so forth and other activities needed to maintain the asset so that it continues to provide normal services and achieves its optimum life.

MILL
One one-thousandth of a dollar of assessed value.

OAP
Old Age Pension: A Social Services program.

OPERATING BUDGET
Plans of current expenditures and the proposed means of financing them. The annual operating budget (or, in the case of some state governments, the biennial operating budget), is the primary means by which most of the financing, acquisition, spending and service delivery activities of a government are controlled.  The use of annual operating budgets is usually required by law.  Even when not required by law, however, annual operating budgets are essential to sound financial management and should be adopted by every government.

OPERATING EXPENSE 
Proprietary fund expenses related directly to the funds’ primary activities.

POLICY
Any plan or course of action adopted by a government, political  party, business organization, or the like, designed to influence and determine decisions, actions and other matters.

RECEIPTS 
Cash received.

REFUND
(1)Noun An amount paid back or credit allowed because of an over collection or because of the return of an object sold.  (2)(Verb) To pay back or allow credit for an amount because of an over collection or because of the return of an object sold (3)(Verb) To provide for the payment of an obligation through cash or credit secured by a new obligation.

RESOLUTION
A special or temporary order of a legislative body; an order of a legislative body requiring less legal formality than an ordinance or statute.

REVENUES 
(1) Increases in the net current assets of a governmental fund type from other than expenditure refunds and residual equity transfers.  Also general long-term debt proceeds and operating transfers are in classified as “other financing sources” rather than as revenues. (2)Increases in the net total assets of a proprietary fund type from other than expense refunds, capital contributions and residual equity transfers.  Also operating transfers in are classified separately from revenues.

RISK MANAGEMENT
All the ways and means used to avoid accidental loss or to reduce its consequences if it does occur.

SLV
San Luis Valley.

SPECIAL DISTRICT
An independent unit of local government organized to perform a single government function or a restricted number of related functions.  Special district usually have the power to incur debt and levy taxes; however, certain types of special districts are entirely dependent upon enterprise earning and cannot impose taxes. Examples of special districts are water districts, drainage districts, flood control districts, hospital districts, fire protection districts, transit authorities, port authorities and electric power authorities.

STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS 
A financial presentation summarizing an entity’s cash transactions in an accounting period.  This statement is not currently required by the GAAP.

STATEMENT OF REVENUES AND EXPENDITURES 
The financial statement that is the governmental fund and expendable trust fund GAAP operating statement.  It presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in an entity’s net current assets.  Statements of changes in equity of governments should be combined with operating statements into “all-inclusive” operating statement formats.

STATUTE 
A written law enacted by a duly organized and constituted legislative body.

TABOR
Taxpayer’s Bill of Rights - associated with Article X, Section 20 of the Colorado Constitution.

TANF
Temporary Assistance to Needy Families: A Social Services program.

TAX CERTIFICATE 
A certificate issued by a government as evidence of the conditional transfer of title to tax-delinquent property from the original owner to the holder of the certificate.  If the owner does not pay the amount of the tax arrearage and other charges required by law during the specified period of redemption, the holder can foreclose to obtain title.  Also called tax sale certificate and tax lien certificate in some jurisdictions.

TAX DEED 
A written instrument by which title to property sold for taxes is transferred unconditionally to the purchaser.  A tax deed is issued upon foreclosure of the tax lien and it obtained by the purchaser at the tax sale.  The tax lien cannot be foreclosed until the expiration of the period during which the owner may redeem the property by paying the delinquent taxes and other charges.

TAXES 
Compulsory charges levied by a government to finance services performed for the common benefit.  This term does not include specific charges made against particular person or property fur current or permanent benefits, such as special assessments.  Neither does the term include charges for services rendered only to those paying such charges.

TAX LIENS 
Claims governments have upon properties until the taxes levied against them have been paid.  Their term is sometimes limited to those delinquent taxes the government has taken legal action to collect through the filing of liens.

TAX ROLL 
The official list showing the amount of taxes levied against each taxpayer or property.  Frequently, the tax roll and the assessment roll are combined, but even in these cases the two can be distinguished.

TRUSTEE
A fiduciary holding property on behalf of another.

TRUST FUNDS 
Funds used to account for assets held by a government in a trustee capacity for individuals, private organizations, other governments and/other funds.

VOUCHER 
A written document that evidences the propriety of transactions and usually indicates the accounts in which they are to be recorded.

VOUCHER SYSTEM  
A system that calls for the preparation of vouchers for transactions involving payments and for the recording of such vouchers in a special book of original entry, known as a voucher register, in the order in which payment is approved.

WARRANT  
An order drawn by the legislative body or an officer of a government upon its treasurer, directing the latter to pay a specified amount to the person name or to the bearer.  It may be payable upon demand, in which case it usually circulates the same as a bank check; or it may be payable only out of certain revenues when and if received, in which case it does not circulate as freely.

WIC
Women, Infant, Children program: A Nursing fund program dealing with nutrition.