Test 1 Flashcards
Anti-Deficiency Act
Officials can be fined or jailed if they obligate the government to spend funds beyond the legally authorized purpose, time or amount
Apportionment
OMB’s approval to use a portion of the legislatively approved budgetary authority
Appropriated budget
Budget that has been passed by the legislative branch; has effect of law
Appropriation
A legislative enactment that creates spending authority to incur expenses and spend money
Block grant
A formula grant that combines several service categories into one grant allowing maximum flexibility to use the funds to meet local needs (unlike a categorical grant)
Capital budget
Forecasts and controls spending for big ticket items acquired and used over several years such as construction projects and major equipment purchases
Capital lease
A lease of real property meeting defined criteria requiring the government to report the property as if it were purchased with the proceeds of long term debt
Cash-flow budget
Used to project the timing and amount of cash flows for a period of time
Categorical grant
A formula grant that can be used only for a narrowly defined purpose (unlike a block grant)
Central management agencies
Provide central management services to other components. An example would be a Human Resources office or Office of Management and Budget
Certificate of Excellence in Accountability Reporting (CEAR)
AGA program that helps agencies produce effective high quality performance and accountability reports and agency financial reports
Certificate of participation
Form of shared government financing where typically several financial institutions share in a loan arrangement with a government entity
Charter
Local government form of a constitution. States may provide for the establishment of local governments through charters.
Checks and balances
Flows from separation of powers. One branch of government can constrain actions of the other branches.
Chief Financial Officer (CFO) Act
1990 law that requires major executive branch agencies to have a CFO that prescribes duties and reporting requirements and requires audited financial statements
Commission
Government component established by law (permanent or temporary) that may have greater autonomy and authority than administratively established government components. Example is the Federal Communications Commission.
Component
Organized unit of government such as an agency, office or department found in all branches of government at all levels. Example is that the Fish and Wildlife Service is a component of the US Department of the Interior.
CAFR
Financial report that includes an MD&A, basic financial statements, footnotes, and RSI as well as an introductory section and additional financial information and a statistical section
Conflict of interest
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
A broad category tax that includes sales, use, excise and value-added taxes
Continuity of operations
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 defining the maturity date, revenue stream 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 used.
Credit-rating agency
Independent organization that assesses the credit worthiness of a borrower. Three major rating agencies are Standard & Poors, Moody’s Investor Service and Fitch Ratings
Data mining
Using special computer-based techniques to extract meaningful information from large bodies of data
Debt
Money owed by the entity usually as a result of planned 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 or other financial resource inflows
Diligence
Pursuing an event, action or assignment to a timely and sufficient end or close
Discretionary grant
Is a Project grant
Donation
Voluntary construction that confers no rights or benefits to 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
Revenue from specific taxes or other sources set aside for specific activities. Also called Dedicated Collections.
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 estate of the deceased person before their assets are distributed to heirs.
Ethics
A complex system of discipline that civilized societies impose on themselves through laws, customs, social etiquette, to govern moral conduct
Excise tax
Form of consumption tax. Levied on the consumption of a particular type of good or participation in a certain type of activity. Whereas general sales taxes are broad-based, excise taxes are more narrowly targeted.
Executive order
Order issued by the president, governor, or local chief of staff that does not violate laws or statutes, and had a substantial impact on policy and procedures of government. Carries less weight than a law because it can be overturned.
Fair
Free from self-interest, prejudice or favoritism. Implies an elimination of one’s own feelings, prejudices and desires so as to achieve a proper balance of conflicting interests.
Federal Accounting Standards Advisory Board (FASAB)
Defined GAAP for entities of the federal government
Federalism
Government authority and responsibility is shared among different levels of government
Financial Accounting Standards Board (FASB)
Defines GAAP for private sector entities
Financial management system
Organized means for the collection, processing, transmission and dissemination of financial information. Includes policies and procedures and trained personnel, as well as any applicable computer hardware and software.
Financial report
External report that depicts 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 amount of the grant is based on a formula, contained in law or regulation that determines the total amount each recipient will receive, if basic eligibility requirements are met.
Forensic auditing
Forensic implies that the results will be admissible as legal evidence. Combines the skills of auditors and accountants with investigative techniques, useful for both detection and prevention of 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 level of performance for the conduct of an audit or attestation. Also called the Yellow Book.
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
Government Performance and Results Act (GPRA)
U.S. law passed in 1993 requiring federal agencies to create long-term strategic plans followed by annual performance plans and reports.
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 or affecting all equally.
Income tax
Tax based on income and levied on individuals or corporations.
Independence
Free of relationships that may impair, or appear to impair, one’s ability to act with objectivity - free of any obligation to particular parties or interests.
Inheritance tax
Form of wealth tax. Levied on the person receiving the 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 legislature. 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.
Internal controls
Designed to ensure programs achieve their intended results without fraud or waste
Judicial review
Judicial branch may review actions by the legislative and executive branches. Flows from separation of powers.
Lease-purchase
When 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 do not require voter approval.
License fee
Fee paid to the government for a specific privilege, often related to an activity.
Line-item veto
Authority that allows the chief executive such as the 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 authority.
Lottery
State-controlled gambling, used by many states as a source of revenue.
Management cycle
Sequence of activities entailed in managing a government and/or its operations. Includes 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. Principle and interest typically retired at same time.
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
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, easy-to-read format
Popular sovereignty
Ultimate sovereignty rests with the people
Project grant
Sometimes referred to as “discretionary grants”. A type of grant that provides funding for specific purposes for limited periods of time. In contrast to formula 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. The proposal is then put to a vote.
Referendum
Process by which certain legislative actions are presented to voters before taking effect
Reserved clause
10th Amendment to the U.S. Constitution. Powers not delegated to the U.S. by the Constitution or prohibited by states are reserved to the states 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 the 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 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 and the outputs and outcomes achieved through application of those resources.
Shared revenues
Usually between state and local governments. Shared revenue funds are provided with few constraints so that local entities can use the funds as needed.
Situational leadership
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”. The federal government cannot be sued without its permission.
Special-purpose government
Organized for a single purpose or a few closely related purposes. Examples are school districts or 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.
Tax expenditure
Provision of tax law that uses tax deductions or credits to encourage certain behavior by individuals or businesses. It achieves through the tax system certain political or social goals that the government would otherwise have to spend money to accomplish.
Term bonds
A block of bonds in which all bonds on 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 de admission charge for a museum to tuition at a 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 or process by the person or organization adding value to the product
Warrant
A negotiable monetary instrument issued by the government
Wealth tax
Category of taxation that includes real property, personal property, intangibles, estate and inheritance taxes
