Laserfiche WebLink
Financial Management for Elected Officials January 2013 <br /> <br />Institute for Local Government www.ca-ilg.org 21 <br /> <br /> <br /> <br />Brief Glossary of Financial Management Terms <br /> <br />Note: The following glossary is designed to help non-finance experts understand some of the <br />terminology used in public agency financial management. Public agency financial management <br />frequently involves terms that are unfamiliar to non-experts, the definitions of which also involve <br />other unfamiliar terms. The definitions and explanations offered below sometimes sacrifice <br />technical accuracy in order to promote a general understanding of what a term means. <br /> <br />The Institute for Local Government encourages those that wish absolute technical accuracy to <br />consult additional sources. <br /> <br /> <br /> <br />Accounting Standards Generally accepted accounting principles (sometimes <br />referred to by the acronym GAAP) published by the <br />Governmental Accounting Standards Board (sometimes <br />referred to by the acronym GASB) that guide local and <br />state agencies’ recording and reporting of financial <br />information. The standards establish such guidelines as <br />when transactions are recognized and annual financial <br />report content. <br /> <br />Accrual Basis Accounting An accounting method in which revenues (or income) are <br />entered into the accounting system when they are payable <br />(even though the money may not have been received yet), <br />and expenses are recognized when the commitment to pay <br />is made (even though no payment may have occurred yet). <br />Compare with Cash Basis Accounting. <br /> <br />Bond An interest-bearing promise to repay a specified sum of <br />money borrowed (known as the principal amount) by a <br />specified date. See also “General Obligation Bonds.” <br />CalTRUST A joint powers authority created by public agencies to <br />provide a safe and convenient method for public agencies <br />to pool their assets for investment purposes. <br />Capital Budget A spending plan for improvements to or acquisition of <br />land, facilities, and infrastructure. The capital budget <br />balances revenues and expenditures, specifies the sources <br />of revenues, and lists each project or acquisition. <br />Capital Improvement Program (CIP) The section in the agency’s budget for capital <br />improvement projects, such as street or park <br />improvements, building construction, and various kinds of <br />major facility maintenance. <br /> <br /> <br />Attachment 2 <br />Page 43 of 109