County of Santa Cruz
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 persons or organizations for goods and services furnished by a
government (but not including amounts due from other funds or other
ACCRUAL BASIS.† The recording of the financial effects on a
government of transactions and other events and circumstances that have cash
consequences for the government in the periods in which those transactions, events
and circumstances occur, rather than only in the periods in which cash is
received or paid by the government.
ACCUMULATED DEPRECIATION.† A contra-asset account used to report the
accumulation of periodic credits to reflect the expiration of the estimated
service life of capital assets.
ADVANCE FROM OTHER FUNDS.† A liability account used to record
noncurrent portions of a long-term debt owed by one fund to another fund within
the same reporting entity.† See DUE TO OTHER FUNDS and INTERFUND RECEIVABLE/PAYABLE.
ADVANCE TO OTHER FUNDS.† An asset account used to record noncurrent
portions of a long-term loan from one fund to another fund within the same
reporting entity.† See DUE FROM OTHER FUNDS.
AGENCY FUND.† A fund normally used to account for assets
held by a government as an agent for individuals, private organizations or
other governments and/or other funds
AMORTIZATION.† (1) The portion of the cost of a
limited-life or intangible asset charged as an expense during a particular
period.† (2) The reduction of debt by
regular payments of principal and interest sufficient to retire the debt by
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.
ASSESSED VALUATION.† A valuation set upon real estate or other
property by a government as a basis for levying taxes.
AUDITORíS 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.
BALANCE SHEET.† The financial statement disclosing the
assets, liabilities and equity of an entity at a specified date in conformity
BASIC FINANCIAL STATEMENTS (BFS).† The minimum combination of financial statements and
note disclosures required for fair presentation in conformity with GAAP.† Basic financial statements have three
components:† government-wide financial
statements, fund financial statements and notes to the financial statements.
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.
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 CONTROL.† The control or management of a government or
enterprise in accordance with an approved budget to keep expenditures within
the limitations of available appropriations and available revenues.
ASSETS.† Long-lived tangible assets
obtained or controlled as a result of past transactions, events or
circumstances.† Capital assets include
buildings, equipment, improvements other than buildings, land and
infrastructure.† In the private sector,
these assets are referred to most often as property, plant and equipment.
CAPITAL EXPENDITURES.† Expenditures resulting in the acquisition of
or addition to the government's general capital assets.
CAPITALIZATION POLICY.† The criteria used by a government to
determine which outlays should be reported as capital assets.
CAPITAL LEASE.† An agreement that conveys the right to use
property, plant or equipment, usually for a stated period of time.† See LEASE-PURCHASE
CAPITAL PROJECTS FUND.† A fund created to account for financial
resources to be used for the acquisition or construction of major capital
facilities (other than those financed by proprietary funds and trust funds).
CASH BASIS.† A basis of accounting under which
transactions are recognized only when cash is received or disbursed.
CASH WITH FISCAL AGENT.† An asset account reflecting deposits with
fiscal agents, such as commercial banks, for the payment of bond principal and
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN
FINANCIAL REPORTING PROGRAM.† A
voluntary program administered by the GFOA to encourage governments to publish
efficiently organized and easily readable CAFRs/CUFRs and to provide technical
assistance and peer recognition to the finance officers preparing them.
CHANGE IN THE FAIR VALUE OF INVESTMENTS.† The difference between the fair value of
investments at the beginning of the year and at the end of the year, taking
into consideration investment purchases, sales, and redemptions.
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, postretirement benefits, deferred compensation or other long-term
fringe benefits, such as group insurance and long-term disability pay.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR).† A financial report that encompasses all
funds and component units of the government. The CAFR should contain (a) the
basic financial statements and required supplementary information, (b)
combining statements to support columns in the basic financial statements that
aggregate information from more than one fund or component unit, and (c)
individual fund statements as needed.†
The CAFR is the governmental unitís official annual report and also
should contain introductory information, schedules necessary to demonstrate
compliance with finance-related legal and contractual provisions, and
CONTINGENT LIABILITY.† Items that may become liabilities as a
result of conditions undetermined at a given date, such as guarantees, pending
lawsuits, judgments under appeal, unsettled disputed claims, unfilled purchase
orders and uncompleted contracts.†
Contingent liabilities should be disclosed within the financial statements
(including the notes) when there is a reasonable possibility a loss may have
been incurred.† Guarantees, however,
should be disclosed even though the possibility of loss may be remote.
COST ĖSHARING MULTIPLE-EMPLOYER PLAN.† A single
plan with pooling (cost-sharing) arrangements for the participating
employers.† All risks, rewards, and
costs, including benefit costs, are shared and are not attributed individually
to the employers.† A single actuarial
valuation covers all plan members and the same contribution rate(s) applies for
CURRENT FINANCIAL RESOURCES MEASUREMENT FOCUS.† Measurement focus according to which the aim of a set of
financial statements is to report the near-term (current) inflows, outflows,
and balances of expendable (spendable) financial resources.† The current financial resources measurement
focus is unique to accounting and financial reporting for state and local
governments and is used solely for reporting the financial position and results
of operations of governmental funds.
DEBT.† An obligation resulting from the borrowing
of money or from the purchase of goods and services.† Debts of governments include bonds, time warrants and notes.
DEBT SERVICE FUND.† A fund established to account
for the accumulation of resources for, and the payment of, general long-term
debt principal and interest.
DEFERRED CHARGES.† Expenditures that are not
chargeable to the fiscal period in which they were made but that are carried as
an asset on the balance sheet, pending amortization or other disposition (e.g.
bond issuance costs).† Deferred charges
differ from prepaid items in that they usually extend over a long period of
time (more than five years) and are not regularly recurring costs of operation.
DEFERRED REVENUE.† Resource inflows that do not
yet meet the criteria for revenue recognition.†
Unearned amounts are always reported as deferred revenue.† In governmental funds, earned amounts also
are reported as deferred revenue until they are available to liquidate
liabilities of the current period.
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.
DEFINED BENEFIT PENSION PLAN.† A pension
plan having terms that specify the amount of pension benefits to be provided at
a future date or† after a certain period
of time; the amount specified usually is a function of one or more factors such
as age, years of service, and compensation.
DEFINED CONTRIBUTION PENSION PLAN. A pension plan
having terms that specify how contributions to a plan memberís account are to
be determined, rather than the amount of retirement income the member is to
receive. The amounts received by a member will depend only on the amount
contributed to the memberís account, earnings on investments of those
contributions, and forfeitures of contributions made for other members that may
be allocated to the memberís account.
DEPRECIATION.† (1) Expiration in the service
life of capital 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 capital asset,
other than a wasting asset, charged as an expense during a particular
period.† In accounting for depreciation,
the cost of a capital 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.
DESIGNATED FUND BALANCE.† A portion
of an unreserved fund balance that has been "earmarked" by the chief
executive officer or the legislative body for specified purposes.
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
DUE TO OTHER FUNDS.† A liability account reflecting
amounts owed by a particular fund to another fund for goods sold or services
rendered.† These amounts include only
short-term obligations on open account, not interfund loans.
MEASUREMENT FOCUS. Measurement focus under which the aim of a set of financial statements
is to report all inflows, outflows, and balances affecting or reflecting an entityís
net assets. The economic resources measurement focus is used for proprietary
and fiduciary funds, as well as for government-wide financial reporting.† It is also used by business enterprises in
the private sector.
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.
ENTERPRISE FUND.† Proprietary fund type used to
report an activity for which a fee is charged to external users for goods and
EXPENDITURE-DRIVEN GRANTS. Government-mandated or
voluntary nonexchange transactions in which expenditure is the prime factor for
determining eligibility.† Also referred
to as reimbursement grants.
EXCHANGE-LIKE TRANSACTION.† Transaction
in which there is an identifiable exchange between the reporting government and
another party, but the values exchanged may not be quite equal or the direct
benefits of the exchange may not be exclusively for the parties to the
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
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 out other activities that
constitute the entity's ongoing major or central operations.
EXTERNAL AUDITORS. Independent auditors typically engaged to
conduct an audit of a governmentís financial statements.
EXTERNAL INVESTMENT POOL.† An
arrangement that commingles (pools) the moneys of more than one legally
separate entity and invests, on the participantsí behalf, in an investment
portfolio; one or more of the participants is not part of the sponsors
reporting entity.† An external
investment pool can be sponsored by an individual government, jointly by more
than one government, or by a nongovernmental entity.† An investment pool that is sponsored by an individual state or
local government is an external investment pool if it includes participation by
a legally separate entity that is not part of the same reporting entity as the
sponsoring government.† If a
government-sponsored pool includes only the primary government and its
component units, it is an internal investment pool and not an external
FAIR VALUE.† The amount at which a
financial instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
FIDUCIARY FUNDS.† The trust and agency funds
used to account for assets held by a government unit in a trustee capacity or
as an agent for individuals, private organizations, other government units
and/or other funds.
FINANCIAL RESOURCES.† Resources that are or will
become available for spending. Financial resources include cash and resources
ordinarily expected to be converted to cash (e.g. receivables, investments).
Financial resources may also include inventories and prepaids (because they
obviate the need to expend current available resources).
FISCAL AGENT.† A fiduciary agent, usually a
bank or county treasurer, who performs the function of paying debt principal
and interest when due.
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 limitations.
FUND BALANCE.† The difference between fund
assets and fund liabilities of governmental and similar trust funds.
FUND FINANCIAL STATEMENTS.† Basic
financial statements presented on the basis of funds.† Term used in contrast with government-wide financial
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 REVENUES. All revenues that are not required to be
reported as program revenues.† All
taxes, even those that are levied for a specific purpose, are general revenues
and should be reported by type of tax - for example, property tax, sales tax,
transient occupancy tax.† All other
nontax revenues (including interest, grants and contributions) that do not meet
the criteria to be reported as program revenues should also be reported as
GENERAL FUND.† The general fund is one of
five governmental fund types and typically serves as the chief operating fund
of the government.† The general fund is
used to account for all financial resources except those required to be
accounted for in another fund.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP).† The conventions, rules, and procedures that serve as the norm for
the fair presentation of financial statements. The various sources of GAAP for
state and local governments are set forth by SAS No. 69, The Meaning of
ďPresent Fairly in Conformity with Generally Accepted Accounting PrinciplesĒ in
the Independent Auditorís Report.
GOVERNMENTAL ACCOUNTING.† The
composite activity of analyzing, recording, summarizing, reporting and
interpreting the financial transactions of governments.
GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB).† The ultimate authoritative accounting and financial reporting
standard-setting body for state and local governments.† The GASB was established in June 1984 to
replace the National Council on Governmental Accounting (NCGA).
GOVERNMENTAL FUNDS.† Funds generally used to
account for tax-supported activities. There are five different types of
governmental funds: the general fund, special revenue funds, debt service
funds, capital projects funds and permanent funds.
GOVERNMENT-WIDE FINANCIAL STATEMENTS. Financial
statements that incorporate all of a governmentís governmental and
business-type activities, as well as its nonfiduciary component units.† There are two basic government-wide
financial statements: the statement of net assets and the statement of net
activities.† Both basic governmental
financial statements are presented using the economic resources measurement
focus and the accrual basis of accounting.
INFRASTRUCTURE. Long-lived capital assets that normally are
stationary in nature and normally can be preserved for a significantly greater
number of years than most capital assets. Examples of infrastructure assets
include roads, bridges, tunnels, drainage systems, water and sewer systems,
dams and lighting systems.
INTERFUND RECEIVABLE/PAYABLE. †Short-term loans made by one fund to another, or the current
portion of an advance to or from another fund.
INTERFUND TRANSFERS.† Flow of assets (such as cash
or goods) between funds and blended component units of the primary government
without equivalent flows of assets in return and without a requirement for
INTERNAL SERVICE FUND.† A fund used
to account for the financing of goods or services provided by one department or
agency to other departments or agencies of a government, or to other
governments, on a cost-reimbursement basis.
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 public or service recipients and in which the
government retains an ongoing financial interest.
LAPSE.† As applied to appropriations, the automatic
termination of an appropriation.† Except
for indeterminate appropriations and continuing appropriations, an
appropriation is made for a certain period of time.† At the end of this period, any unexpended or unencumbered balance
thereof lapses, unless otherwise provided by law.
LEASE-PURCHASE AGREEMENTS.† Contractual
agreements that are termed leases, but that in substance are purchase
LEGAL LEVEL OF BUDGETARY CONTROL.† The
level at which spending in excess of budgeted amounts would be a violation of
LEVEL OF BUDGETARY CONTROL.† The level
at which a governmentís management may not reallocate resources without special
approval from the legislative body.
LIABILITIES.† Probable future sacrifices of
economic benefits, arising from present obligations of a particular entity to
transfer assets or provide services to other entities in the future as a result
of past transactions or events.
LOANS RECEIVABLE.† An asset account reflecting
amounts loaned to individuals or organizations external to a government,
including notes taken as security for such loans.† Loans to other funds and governments should be recorded and
MAJOR FUND.† A governmental fund or enterprise fund reported as a
separate column in the basic fund financial statements. The general fund is
always a major fund.† Otherwise, major
funds are funds whose revenues/expenditures, assets or liabilities are at least
10 percent of corresponding totals for all government or enterprise funds and
at least 5 percent of the aggregate amount for all governmental and enterprise
funds for the same item.† Any other
government or enterprise fund may be reported as a major fund if the
governmentís officials believe that fund is particularly important to financial
MANAGEMENTíS DISCUSSION AND
component of required supplementary information used to introduce the basic
financial statements and to provide an analytical overview of the governmentís
MEASUREMENT FOCUS. †A way of presenting an entityís financial performance and position
by considering which resources are measured (financial or economic) and when
the effects of transactions or events involving those resources are
recognized (the basis of accounting).†
The measurement focus of government-wide financial statements,
proprietary fund financial statements and fiduciary fund financial statements
is economic resources. The measurement focus of governmental fund financial
statements is current financial resources.
MODIFIED ACCRUAL BASIS.† The accrual
basis of accounting adapted to the governmental fund-type measurement
focus.† Under it, revenues and other
financial resource increments (e.g. bond issue proceeds) are recognized when
they become susceptible to accrual, that is when they become both
"measurable" and "available to finance expenditures of the
"Available" means collectible in the current period or soon
enough thereafter to be used to pay liabilities of the current period.† Generally, expenditures are recognized when
the fund liability is incurred.† All
governmental funds, expendable trust funds and agency funds are accounted for
using the modified accrual basis of accounting.
OTHER FINANCING SOURCES.† An increase
in current financial resources that is reported separately from revenues to
avoid distorting revenue trends. The use of the other financing sources
category is limited to items so classified by GAAP.
OTHER FINANCING USES.† A decrease
in current financial resources that is reported separately from expenditures to
avoid distorting expenditure trends. The use of other financing uses category
is limited to items so classified by GAAP.
OVERLAPPING DEBT.† The proportionate share
property within each government must bear of the debts of all local governments
located wholly or in part within the geographic boundaries of the reporting
government.† Except for special
assessment debt, the amount of debt of each unit applicable to the reporting
unit is arrived at by (1) determining what percentage of the total assessed
value of the overlapping jurisdiction lies within the limits of the reporting
unit, and (2) applying this percentage to the total debt of the overlapping
jurisdiction.† Special assessment debt
is allocated on the basis of the ratio of assessment receivable in each
jurisdiction, which will be used wholly or in part to pay off the debt, to
total assessments receivable, which will be used wholly or in part for this
PROGRAM REVENUES. Term used in connection with
the government-wide statement of activities.†
Revenues that derive directly from the program itself or from parties
outside the reporting governmentís taxpayers or citizenry, as a whole; they
reduce the net cost of the function to be financed from the governmentís
PROPRIETARY FUNDS.† Funds that focus on the
determination of operating income, changes in net assets (or cost recovery),
financial position, and cash flows. There are two different types of
proprietary funds: enterprise funds and internal service funds.
REBATABLE ARBITRAGE. A term used in connection
with the reinvestment of the proceeds of tax-exempt debt. A requirement to
remit to the federal government interest revenue in excess of interest costs
when the proceeds from the sale of tax-exempt securities are reinvested in a
taxable money market instrument with a materially higher yield.
REPORTING ENTITY.† The oversight unit and all of
its component units, if any, that are combined in the CAFR/BFS.
REQUIRED SUPPLEMENTARY INFORMATION.†
Consists of statements, schedules, statistical data or other information
which, according to the GASB, is necessary to supplement, although not required
to be a part of the basic financial statements.
RESERVED FUND BALANCE.† The portion
of a governmental fundís net assets that is not available for appropriation.
RESTRICTED ASSETS.† Assets whose use is subject to
constraints that are either (a) externally imposed by creditors (such as
through debt covenants), grantors, contributors, or laws or regulations of
other governments or (b) imposed by law through constitutional provisions or
RESTRICTED NET ASSETS. A component of net assets
calculated by reducing the carrying value of restricted assets by the amount of
any related debt outstanding.
RETAINED EARNINGS. †An equity account reflecting
the accumulated earnings of an enterprise or internal service fund.
REVENUE BONDS.† Bonds whose principal and
interest are payable exclusively from earnings of an enterprise fund.† In addition to a pledge of revenues, such bonds
sometimes contain a mortgage on the enterprise fund's property.
RISK MANAGEMENT.† All the ways and means used to
avoid accidental loss or to reduce its consequences if it does occur.
SELF-INSURANCE.† A term often used to describe
the retention by an entity of a risk of loss arising out of the ownership of
property or from some other cause, instead of transferring that risk to an
independent third party through the purchase of an insurance policy.† It is sometimes accompanied by the setting
aside of assets to fund any related losses.†
Because no insurance is involved, the term self-insurance is a misnomer.
SINGLE AUDIT.† An audit performed in
accordance with the Single Audit Act of 1997 and Office of Management and
Budgetís (OMB) Circular A-133, Audits of
State and Local Governments and Non-Profit Organizations.† The Single Audit Act allows or requires
governments (depending on the amount of federal assistance received) to have
one audit performed to meet the needs of all federal agencies.
SPECIAL DISTRICT.† An independent unit of local
government organized to perform a single government function or a restricted
number of related functions.† Special
districts usually have the power to incur debt and levy taxes; however, certain
types of special districts are entirely dependent upon enterprise earnings 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.
SPECIAL REVENUE FUND.† A fund used
to account for the proceeds of specific revenue sources (other than expendable
trusts or major capital projects) that are legally restricted to expenditure
for specified purposes. †
TAX AND REVENUE ANTICIPATION NOTES (TRANS).† Notes issued in anticipation of the collection of taxes and
revenues, usually retirable only from tax collections, and frequently only from
the proceeds of the tax and revenues levy whose collection they anticipate.
TRUST FUNDS.† Funds used to account for
assets held by a government in a trustee capacity for individuals, private
organizations, other governments and/or other funds.
UNDESIGNATED UNRESERVED FUND BALANCE.† That
portion of a fund balance that is available for spending or appropriation and
has not been "earmarked" for specified purposes by the chief
executive officer or the legislative body.
UNQUALIFIED OPINION.† An opinion rendered without
reservation by the independent auditor that financial statements are fairly
UNRESERVED FUND BALANCE.† That
portion of a fund balance available for spending or appropriation in the
UNRESTRICTED NET ASSETS. That portion of net assets
that is neither restricted not invested in capital assets (net of related