CGFM Terms Flashcards
Accountability
Principle that, in a democracy, government operates by the consent of the people. Therefore, it is responsible to, and must answer to, the people for its actions and results, including the taking and using of the people’s resources.
Allotment
In the federal government, an agency distributes apportioned budgetary authority to various components within the agency. After the executive agency receives its apportionment, it allots budgetary authority to specific components within the agency.
Annual Comprehensive Financial Report (ACFR)
A financial report that includes an MD&A (Management’s Discussion and analysis) basic financial statements, footnotes, and other required supplementary information, as well as an introductory section, additional financial information (i.g., combining and individual fund schedules, if applicable), and a statistical section.
Antideficiency Act
Federal law states that officials can be fined and/or jailed if they obligate the government to spend funds beyond the legally authorized purpose, time, or amount.
Apportionment
Definitions may vary at different levels of government. At the federal level, this is OMB’s approval to use a portion of the legislatively approved budgetary authority.
Appropriated budget
The Budget passed by the legislative branch (and signed by the chief executive, if required) has the effect of law.
Appropriation
A legislative enactment (law, statute, or ordinance) that creates spending authority, the legal authority to incur expenses and spend money.
Authorization
Legislative enactment that approves programs prescribes what activities an agency may pursue if funding is available.
Block grant
One type of formula grant. Block grants combine several service categories into one grant and, thus, allow maximum flexibility to the grantee to use the funds to meet local needs. (Also see “Categorical grant.”)
Capital Budget
Forecasts and controls spending for “big-ticket” items that are acquired and used over several years, such as construction projects and major equipment purchases. Used at the state and local levels.
Capital Lease
A lease of real property that meets defined criteria requires the government to report the property as if it were purchased with long-term debt proceeds.
Cash-flow budget
Forecasts the timing, as well as the amount of cash flows, for a period. Used to project required cash levels.
Categorical Grant
One tyoe of formula grant that can be used ony for a narrowly defined purpose (also see “Block grant”)
Central Management Agencies
Government agencies that provide central management services to other components. An example would be a state government’s human resources office (that serves all state agencies) or the Office of Management and Budget at the federal level.
Certificate of Excellence in Accountability Reporting (CEAR)
An AGA program that helps federal agencies and their performance and accountability reports/agency financial reports.
Certificate of participation
Form of shared government financing. In a typical form, several financial institutions share in a loan arrangement with a government entity.
Charter
Local government version of a constitution. States may provide for the establishment of local governments through charters.
Checks and Balances
Process by which one branch of government (legislative, executive or judicial) can constrain actions of the other branches. Flows from separation of powers.
Chief Financial Officers (CFO) Act
A 1990 law that, among other provisions, requires the federal government’s major executive branch agencies to have a Chief Financial Officer. Prescribes duties and reporting requirements, and requires audited financial statements.
Commission
Government component established by law, statute or ordinance. May be permanent or temporary. Because it is established by law, it may have greater autonomy and authority than government components that are administratively established. Example: Federal Communications Commission.
Component
Organized unit of government, such as agency, office or department. Found in all branches of government at all levels. Example: U.S. Fish & Wildlife Service is a component of the U.S. Department of the Interior.
Conflict of Interest
Arises when one has a personal interest in matters relating to official duties or activities. Such conflicts can destroy objectivity and independence and prevent the exercise of due care.
Consumption tax
Broad category of tax that includes sales, use, excise and value-added taxes.
Continuity of Operations
Refers to efforts to ensure the organization can sustain essential operations, regardless of planned or unplanned incidents or disruptions.
Covenant (bond)
Legal requirements pertaining to a specific bond issue. Typically defines the maturity date, revenue stream that will be used to repay the debt, interest rate and repayment schedule. May require a sinking fund and may specify conditions that must be met while the bonds are outstanding, and/or before new debt can be issued.
Credit-rating agency
Independent organization that assesses the credit worthiness of borrower. Three major rating agencies are Standard & Poors, Moody’s Investor Service and Fitch Ratings.
Data mining
Using special, computer-based techniques, such as filters and algorithms, to extract meaningful information from large bodies of data.
Debt
Money owed by the entity to individual or organizational creditors, usually as a result of planned short-or long-term borrowing to finance government objectives.
Dedicated Collections
Taxes levied or other revenues collected to finance a specific activity. Proceeds are deposited into an account restricted to that activity. Also referred to as earmarked or restricted taxes.
Deficit
Occurs when government expenditures for a specific fiscal period exceed revenues and other financial resource inflows.
Diligence
Pursuing an event, action or assignment to a timely and sufficient end or close.
Discretionary Grant
A term sometimes used to mean “project grant.” (See “ project grant.”)
Donation
Voluntary contribution that confers no rights or benefits on the giver
Due care
To discharge professional responsibilities with competence and diligence, to the best of one’s ability, and with the same level of ability and skill as others in similar positions. It also means to act in the best interest of those served.
Earmarking
Variation on use of special funds. Revenue from specific taxes or other sources is the earmarking of gasoline taxes for highway improvements. Also referred to as “dedicated collections”. The term also signifies the legislature reserving a portion of an appropriation for a specific, limited purpose.
Enterprise resource planning (ERP) system
Major “end-to-end” computer system that links many functions and departments. Used to simplify and streamline financial management and to integrate operations with financial management.
Estate Tax
Form of wealth tax. Levied on the deceased person’s estate before his or her assets are distributed to heirs.
Ethics
A complex system of discipline that civilized societies impose on themselves through laws, customs, standards, social etiquette, and other rules to govern moral conduct.
Exercise Tax
Form of consumption tax. Levied on consuming a particular type of good or participating in a certain type of activity. Whereas general sales taxes are broad-based, excise taxes are more narrowly targeted.
Executive Order
An order issued by the president, governor, or a local government’s chief executive that does not violate laws or statutes and substantially impacts policy and procedures of government. It carries less weight than a law because the legislature or next chief executive may overturn the previous order.
Fair
Free from self-interest, prejudice, or favoritism. Implies eliminating one’s feelings, prejudices, and desires to achieve a proper balance of conflicting interests.
Federal Accounting Standards Advisory Board (FASAB)
Defines GAAP for federal government entities; this includes the national government as a whole plus distinct components.
Federalism
The principle that government authority and responsibility are shared among different levels of government. (in practice, people often use the term “federal’ when referring to the national level of government)
Financial Accounting Standards Board (FASB)
Defines GAAP for private sector entities. Occasionally, GASB and FASAB make FASB standards applicable to state, local, or national governments, respectively.
Financial Management System
Organize means for collecting, processing, transmitting, and disseminating financial information. Includes policies and procedures, trained personnel, and any applicable computer hardware and software.
Financial Report
External report that depicts the financial position and financial results of an entity.
Formula Grant
A type of intergovernmental grant that includes both categorical and block grants, in which the grant amount is based on a formula contained in law or regulation that determines the total amount each recipient will receive if basic eligibility requirements are satisfied.
Forensic auditing
“Forensic” implies that the results will be admissible as legal evidence. Forensic auditing combines the skills of auditors and accountants with investigative techniques, which are useful for detecting and preventing fraud.
General Assembly
Name often applied to the legislative branch at the state level
General obligation bonds
Form of government debt that is backed by the full faith and credit of the government. Contrasts with revenue bonds.
General-purpose government
Entity at the national, state or local level that provides a broad range of services
Generally Accepted Government Auditing Standards (GAGAS)
Issued by the Government Accountability Office (GAO), to define the expected levels of performance for the conduct of an audit or attestation of a government organization, program, activity, or function (also called Government Auditing Standards or Yellow Book)
Governmental Accounting Standards Board (GASB)
Defines GAAP for state and local government entities
Government corporation
Quasi-government entity formed to support businesslike functions where most, if not all, operating expenses are expected to be covered through revenues and fees, rather than from appropriated budget authority.
Government Performance and Results Act (GPRA)
U.S. Law passed in 1993; requires federal agencies to create long-term strategic plans. The strategic plans are followed by annual performance plans (currently performance budgets), and annual performance reports. (The law has been updated with the Government Performance and Results Act Modernization Act, enacted in 2010)
Grant
Funds transferred from one level of government to another for specific or broad purposes
Impartial
Lack of favoritism. The absence of favor or prejudice.
Not partial or biased. Treating of affecting all equally.
Income tax
Tax based on income and levied on individuals or corporations. Used most often at national and state levels, though some states allow local government ot impose income taxes.
Independence
Free of relationships that may impair, one’s ability to act with objectivity. Independence is the quality of being free of any obligation to particular parties or interests.
Inheritance tax
Form of wealth tax. Levied on the person receiving a bequest.
Initiative
Process that enables citizens to present their view of a problem and a proposed solution, rather than depending on a solution devised and enacted by the legislative branch. Allows direct citizen action to affect laws.
Intangibles tax
Form of wealth tax. Applied to intangible assets such as stocks and bonds, savings accounts, trademarks, and accounts receivable (in the case of a business)
Internal controls
Organization and activites designed to ensure programs achieve their intended results; resources are used efficiently and effectively; programs and resources are protected from waste, fraud and mismanagement; laws and regulations are followed; and reliable and timely information is obtained, maintained and reported.
Judicial Review
Principle by which the judicial branch may review actions by the legislative and executive branches and, if appropriate, declare them unconstitutional or illegal. Flows from the separation of powers.
Lease-purchase
Practice by which a government entity assumes a long-term lease on a capital asset and, at the end of the lease period, the asset may transfer to the government. Usually, these long-term obligations do not require voter approval.
Lease-purchase
Practive by which a government entity assumes a long-term lease on a capital asset and, at the end of the lease period, the asset may transfer to the government. Usually, these long-term obligations do not require voter approval.
License fee
Fee paid to the government for a specific privilege, often related to an activity. Ranges from recreation (fishing license) to business (real estate license)
Line-item veto
Authority that allows the chief executive, such as a governor or mayor, to strike individual line items from the budget without vetoing the entire budget bill. U.S. presidents do not have line-item veto authority.
Lottery
State-controlled gambling, used by many states as a source of revenue.
Management Cycle
Refers to the sequence of activities entailed in managing a government and/or its operations. The activities include planning, programming, budgeting, operations, accounting, reporting and auditing.
Mediation
Form of conflict resolution that involves an objective, third-party mediator who tries to bring the disputants closer together. Unlike arbitration, mediation is usually voluntary and non-binding.
Note
Form of government debt used as a short-term financing source. Due to the short maturity period, the principle and interest for a note are frequently retired simultaneously upon maturity ( that is, no periodic interest payments)
Object class
A budget or accounting category that defines the resources to be applied to specific types of inputs, such as personnel, travel, tools or supplies.
Objectivity
Imposes the obligation to be impartial, intellectually honest, and free of conflicts of interest. Public officials are objective when they uphold the expectation of fairness, make decisions on merit, and do not allow prejudice or bias to influence their decisions or behavior
Operating budget
Defines level of resources to be applied in providing government programs and services; usually covers periods of one to two years.
Ordinance
Law enacted by a legislative body below the state level, such as a county, city or town.
Outcome
Results of government programs, such as the number of gainfully employed graduates or reduction in road accidents. May take many months or years to achieve. Outcomes are often more difficult to measure than outputs.
Output
The goods or services produced, such as number of students trained or number of road miles repaired.
Performance and accountability report
A single report that combines financial results and performance results. Recent requirement for federal executive agencies, but may be practiced at other levels of government.
Performance Report
External report that indicates what has been accomplished with the resources consumed by a government.
Personal property tax
Form of wealth tax. Personal property differs from real property in that it is not attached to the ground and can be transferred from one location to another.
Popular report
Condensed form of external financial report that provides basic financial information and other performance data in a short, essay-to read format.
Popular Sovereignty
Principle that, while governments are sovereign entities, in a democracy, ultimate sovereignty rests with the people.
Project grant
A type of grant that provides funding for specific purposes for limited periods of time. In contrast to formula grants, project grants are competitive and receipt of funding is less assured. Project grants are sometimes referred to as “discretionary grants.”
Quasi - government entities
Entities that blend characteristics of governments and the private sector
Recall
Process that enables voters to remove elected officials from office. Usually involves collecting signatures on a petition. If enough legitimate signatures are collected, the proposal is put to the vote.
Referendum
Process by which certain legislative actions are presented to voters before taking effect.
Reserved clause
10th Amendment to the U.S.Constitution. “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people. “
Revenue bond
Form of debt that is secured by a specific source of financing, such as revenue from the project being funded. Contrasts with general obligation bonds, which are backed by the full faith and credit of government.
Sales tax
Form of consumption tax based on individual sales transactions; usually collected at point of sale by the vendor who then remits the tax to the government.
Separation of powers
Principle that each branch of government (legislative, executive and judicial) possesses certain powers with regard to the other branches and acts in some ways to constrain the other branches. Checks and balances and judicial review flow from this principle.
Serial bonds
A bond issue featuring maturities, every year, over a period of several years. Contrasts with term bonds in which the entire issue matures on the same date or near the same date.
Service efforts and accomplishments. (SEA)
A generic term for a program to measure performance, including the inputs to government programs (such as financial resources, work hours or supplies) and the outputs and outcomes achieved through application of those resources (such as number of students graduated or the number of students moving to the next level).
Shared revenues
Usually associated with revenue sharing between the state and local governments. In most instances, shared revenue funds are provided with few constraints so that local entities can use the funds as needed.
Situational Leadership
Leadership model developed by Ken Blanchard and Paul Hersey. Encourages leaders to diagnose developmental level of employees and vary their leadership style accordingly.
Sovereignty
Means”possessed of supreme power.” One consequence of federal government sovereignty is that the federal government cannot be sued without its permission.
Special-purpose government
Special-purpose governments are organized for a single purpose or a few closely related purposes. Examples are school districts and conservation districts.
Stewardship
Principle that government is accountable for safeguarding assets and promoting long-term economic security of citizens.
Tax equity
Principle that taxes should treat taxpayers fairly. When applied to income taxes, horizontal equity means different taxpayers with the same income level pay the same amount of taxes, and vertical equity means taxpayers with different income levels pay different amounts of taxes.
Tax expenditure
Provision of tax law or regulation that uses tax deductions, tax credits, or income exemptions to encourage certain behavior by individuals or businesses. Called tax expenditure because it achieves, through the tax system, certain political, economic or social goals that the government would otherwise have to expend monies to accomplish.
Term bonds
A block of bonds in which all bonds in the issue mature on the same date or near the same date, usually many years after issuance. Contrasts with serial bonds.
Use tax
Tax charged on goods purchased from out-of state and used within the state. Tax is levied for the right to use the item in the state. One form of consumption tax.
User Fee
Fee imposed on the specific beneficiary of a good or service. User fees range from the admission charge for a museum, to tuition at a municipal day-care center.
Value added tax (VAT)
An indirect tax on consumption that resembles a sales tax, but is paid at each stage in the development, manufacturing or distribution process by the person or organization adding value to the product.
Warrant
A negotiable monetary instrument issued by a state or local government or the federal government.
Wealth Tax
Category of taxation that includes real property, personal property, intangibles, estate and inheritance taxes.
