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Governmental Environment Glossary


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Association of Government Accountants
Certificate of Excellence in Accounting Reporting
Chief Financial Officer
Certified Government Finance Manager
Enterprise Resource Planning
Federal Accounting Standars Advisory Board
Financial Accounting Standards Board
Government Accountability Office
Governmental Accounting Standards Board
Government Performance and Results Act
Office of Management and Budget
Performance and Accountability Report
Service Efforts and Accomplishments
Principle that in a democracy, government operates at the consent of the people. Therefore, it must answer to the people for its actions and results, including the taking and using of the people's resources.
In the federal government, an agency's distribution of 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.
Anti-Deficiency Act
At the federal level, a law stating that officials can be fined and/or jailed if they obligate the government to spend funds beyond the legally authorized purpose, time or amount.
Definitions may vary at different levels of government. At the federal level, 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.
A legislative enactment (law, statute or ordinance) that creates spending authority; the legal authority to incur expenses and spend money.
Attestation engagement
Engagement primarily concerned with examing or performing aagreed-upon procedures on a subbbject matter, or an assertion about a subject matter, and reporting on the results. The subject matter may be financial or nonfinancial and can be part of a financial audit audit or performance audit. Possible subjects include reporting on an entity's internal control, compliance with law or performance measures.
Legislative enactment that approves programs; prescribes what activities an agency may persue if funding is available.
Block grants
Intergovernmental provision of resources for broadly defined purposes. Contrasts with category grants.
Capital budget
Forecasts and controls spending for "big-ticket" items that are acquired and used over a period of several years, such as contruction projects and major equipment purchases. Used at the state and local level.
Capital Leases
Capital lease is a lease of real property that meets defined criteria requiring the government to report the propertyas it purchased long-term debt.
Cash-flow budget
Forecasts the timing as well as amount of caash flows for the year. Used to project required cash levels.
Category grants
Intergovernmental provisions of resources to be used for activities in a specific category ofpurpose. May be further classified as discretionary grants or formula grants. Contrasts with block grants.
Central managment agencies
Government agencies that provide central management services to other components. Example would be a state government human resource office (that serves all state agencies) or the Office of Management and Budget at the federal level.
Certification of Excellence in Accountability Reporting (CEAR)
An AGA program that helps federal agencies and their components to produce effective, high-quality Performance and Accountability Reports
Cerfificate of participation
Form of shared government financing. In a typical form, several financial institutions share in a loan arrangement with a government entity.
Local government version of a contitution. States may provide for the establishment of local governments through charters.
Checks and balances
Process by which one branch of govenment (legislative, executive or judicial) can constrain actions of the other branches. Flows from separation of powers.
Chief Financial Officers (CFO) Act
1990 law that, among oother provisions, requires the federal government's major executive branchh agencies to have a Chief Financial Officer. Prescribes duuuies and reporting requirements, and requires audited financial statements.
Government components established by law, statute or ordinance. May be permanent or temporary. Because they are established by law, may have greater authority than government components that are administratively established. Example: Federal Communications Commission.
Organized units of government such as agencies, offices and departments. Found in all branches of government at all levels. Example: U.S. Fish & Wildlife Service is a component of the Department of the Interior.
Consumption taxes
Broad category of tax that includes sales, use, excise and value-added taxes.
Covenant (bond)
Legal requirements pertaining to a specific bond issue. Typically define 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 before new debt can be issued.
Credit-rating agencies
Independent organizatins that assess the credit worthiness of debt. Three major rating agencies are Standard & Poors, Moody's Investor Service and Fitches Rating
Money owed by the entity to individual or organizational creditors, ususally as a result of planned short-term borrowing to finance government objectives.
Dedicated tax
Taxes levied to finance a specific activity. Proceeds are deposited into an account restricted to that activity. Also referred to as earmarked or restricted taxes.
Occurs when government expenditures for a specific fiscal period exceeds revenues and/or financial resource inflows.
Pursuing an event, action or assignment to a timely and sufficient and or close.
Discretionary grants
Form of a category grant. Transfers funds between governments for a specific purpose; whether a grant is awarded and the amount of the award depend on discretion of the entity providing the funds.
Voluntaray contributions that confer no rights or benefits on the giver.
Variation on use of special funds. Revenue from specific taxes or other sources is set aside for specific activities. One example is the earmarking of gasoline taxes for highway improvements.
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 operation with financial management.
Estate tax
Form of wealth tax. Levied on the estate of the deceased person before assets are distributed to heirs.
A set of moral principles and values; the principles of conduct governing an individual or a (professional) group. A complex system of discipline that civilized societies impose on themselves through laws, customs, standards, social etiquette and other rules 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 taxs are broad-based, excise taxes are more narrowly targeted.
Executive Orders
Orders issued by the president, governor or a local government's chief executive that do not violate laws or statutes and have substantial impact on policy and procedures of government. They carry less weight than laws because the legislature or next chief executive may overturn the previous order.
Free from self-interest, prejudice or favoritism. Implies an elimination of one's own feelings, prejedicues and desires so as to achieve a proper balance of conflicting interests.
Federal Accounting Standards Advisory Board (FASAB)
Defines GAAP for entities of the federal government; this includes the national government as a whole plus ditinct components.
Principle that government authority and responsibility is 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 national, state or local government.
Financial statement audit
Examination of financial statements, accomplished by an independent auditor. Results in an opinion on whether the financial statements are presented fairly in accordance with GAAP (generally accepted accounting principles) or another comprehensive basis of accounting.
Financial reports
External reports that depict financial position an financial results of operations of the entity.
Formula grants
Form of category grants. The amount of the intergovernmental transfer is based on a formula contained in law or regulation, which determines the total amount recipients will receive if basic eligibility requirements are satisfied.
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
Entities at the national, state, or local level that provide a broad range of services.
Governmental Accounting Standards Board (GASB)
Defines GAAP for state and local government entities.
Government corporations
Quasi-government entities 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 budgeted authority.
Government Performance and Results Act
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), performance measures and performance reports.
Funds transferred from one level of government to another for specific or broad purposes.
Lack of favoritism. The absence of favor or prejudice. Not partial or biased. Treating or affecting all equally.
Financial Accounting Standards Advisory Board (FASAB)
Defines GAAP for entities of the federal government; this includes the national government as a whole plus distinct components.
Finacial reports
External reports that depict financial position and financial results of operations of the entity.
General-purpose government
Entities at the national, state, or local level that provide a broad range of services.
Government Accounting Standards Board (GASB)
Defines GAAP for state and local government entities.
Income tax
Tax based on income and levied on indivuals or corporations. Used most often at national and state levels, though some states allow governments to impose income taxes.
Freedom from actual or perceived impairments, whether mental, physical, financial or other conflicts of interest.
Inheritance tax
Form of wealth tax. Levied on the person receiving the bequest.
Process that enables citizens to present their view of a problem and a proposed solution, rather then 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
Activities 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.
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.
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.
State-controlled gambling, used by many states as a source of revenue.
Management cycle
Steps in the continuous government management cycle include planning, programming, budgeting, operations, accounting, reporting and auditing.
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 nonbinding.
Myers-Briggs Type Analysis
Personality assessment based on the psychological theory of Carl Jung and the diagnostic instrument developed by Isabel Briggs-Myer and her mother Katharine Briggs.
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 usually retired simultaneously upon maturity (that is, no periodic interst payments).
Object class
A budget or accounting category that defines the reources to be applied to specific types of inputs such as personnel, travel, tools or supplies.
A combination of impartiality, intellectual honesty and a freedom from prejudice, bias and conflicts of interest or influence of others. Stresses a tendency to view events or persons as apart from oneself and one's own interest or feelings.
Operating budget
Defines level of resources to be applied in providing government programs and services; usually covers periods of one to two years.
Law enacted by a legislative body below the state level, such as of a county, city or town.
The goods or services produced, such as 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 outputs.
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 audits
Examination of the performance and management of a program against objective criteria. Contrasts with a financial audit, which is limited to financial information and results.
Performance reports
External reports that indicate 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 mobile and can be transferred from one location to another.
Popular reports
Condensed form of external financial reports that provide basic financial information and other performance data in a short, easy-to-read format.
Popular sovereignty
Principle that while governments are sovereign entities, in a democracy, ultimate sovereignty rest with the people.
Quasi-government entities
Entities that blend characteristics of governments and private sector.
Process that enables voters to remove elected officials from office. Usually involves collecting signatures on a petition. If enough legitimate signatures are collected, proposal is put to the vote.
Process by which certain legislative actions are presented to voters before taking effect. Alternatively, legislation can take effect immediately and then be overturned in the event of a successful referendum.
Resevered clause
Tenth 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 bonds
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 tothe 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)
Refers to inputs to government programs (such as financial resources, work hours and 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 proved 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.
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.
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 amount of taxes.
Tax expenditures
Provisions of tax laws and regulations that encourage certain behavior by individuals or businesses. Called tax expenditures because they achieve through the tax system 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, ususally 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 monthly 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.
An order by authorized executive officials that directs the treasury to pay a specific sum to order or to bearer.
Wealth tax
Category of taxation that includes real property, personal property, intangibles, estate and inheritance taxes.

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