Glossary of Terms

The Annual Budget contains specialized and technical terminology that is unique to public finance and budgeting. To assist the reader in understanding these terms, a budget glossary of terms has been included.

Accrual - Represents liabilities and non-cash-based assets used in accrual-based accounting. These account types include, but are not limited to, accounts payable and accounts receivable.

ACFR - An Annual Comprehensive Financial Report, formerly called Comprehensive Annual Financial Report (CAFR) is a set of U.S. government financial statements comprising the financial report of a state, municipal or other governmental entity that complies with the accounting requirements promulgated by the Governmental Accounting Standards Board (GASB).

Appropriation - The legal authorization granted by a legislative body (City Council) to make expenditures and to incur obligations for specific purposes. An appropriation is usually limited in both amount and time.

Assessed Value - The estimated value placed on real and personal property by the County’s Assessor used the basis for levying property taxes.

Audit - A methodical examination of the use of resources. It concludes in a written report of its findings and it is a test of management's accounting system to determine the extent to which internal accounting controls are both available and being used. Prepared by an independent certified public accountant (CPA), an audit's primary objective is to determine if the City's financial statements fairly present the City's financial position and results of operation in conformity with generally accepted accounting principles.

Balanced Budget - A budget in which revenues fully cover expenditures. Appropriations may be made from prior year fund balance provided favorable reserves are maintained.

Bond - A form of borrowing which reflects a written promise to pay a specified sum of money, called the face value or principal amount, at a specific date or dates in the future, called the maturity date(s), together with periodic interest at a specific rate.

Budget - A comprehensive financial plan of operation which incorporates an estimate of proposed expenditures for a given period and the proposed means of financing them.

Capital Expenditures - The City considered items which cost more than $5,000 and have a useful life of greater than one year to be capital assets.

Capital Improvement Plan (CIP) - A plan of capital improvement expenditures to be incurred each year over a period of the project’s life, setting forth each capital project, the amount to be expended and the proposed method of funding the project.

C.A.R.E.S Act - The Coronavirus Aid, Relief, and Economic Security (CARES) Act (2020) and the Coronavirus Response and Consolidated Appropriations Act (2021) provided fast and direct economic assistance for American workers, families, small businesses, and industries.

COVID-19 - COVID-19 is a respiratory disease caused by SARS-CoV-2, a coronavirus discovered in 2019.

Debt Limit - The maximum amount of general obligated debt which is legally permitted. The State of South Carolina forbids cities from incurring debt in excess of 8% of the total assessed valuation of taxable property within the City.

Debt Service - The payment of principal and interest on borrowed funds, such as bonds.

Deficit - an excess of expenditures over revenue a given period.

Department - An organizational unit of the City which manages an operation or group of related operations within a functional area.

FEMA(Federal Emergency Management Agency) Mission is to support the citizens and first responders to promote that as a nation we work together to build, 

sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.

Fiscal Year (FY) - A 12-month period to which the annual operating budget applies and at the end of which a government determines its financial position and the results of its operations. The City of Beaufort’s fiscal year begins July 1st and ends the following June 30th.

Full-Time Equivalent (FTE) - A position which works a 40-hour week on an ongoing basis and is specifically authorized for ongoing funding by classification in the annual budget. Two part-time positions equal one FTE. Most Public Safety (Fire and Police) employees work in shifts. The normal Fire employee shift is 96 work hours during a two-week period, while a normal Police employee shift is 85.5 work hours during a two-week period.

Fund - A fiscal and accounting entity that has self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

Fund Balance - The difference between governmental fund assets and liabilities. Fund Balance is intended to serve as a measure of the current financial resources available in a governmental fund.

GAAP - Generally accepted accounting principles (GAAP) refer to a common set of accounting rules, standards, and procedures issued by the Financial Accounting Standards Board (FASB). Public companies in the U.S. must follow GAAP when their accountants compile their financial statements.

GASB - The Government Accounting Standards Board (GASB) is a private non-governmental organization that creates accounting reporting standards, or generally accepted accounting principles (GAAP), for state and local governments in the United States.

General Fund - The fund used to account for all financial resources except those required to the accounted for in another fund. This is considered the City’s chief operating fund.

General Obligation (G.O.) Bonds - When the City pledges its full-faith and credit to the repayment of the bonds it issues, then those bonds are general obligation (G.O.) bonds. These bonds are usually repaid from taxes relating to debt.

GFOA - The Government Finance Officers Association (GFOA), founded in 1906, represents public finance officials throughout the United States and Canada. The association's more than 20,000 members are federal, state/provincial, and local finance officials deeply involved in planning, financing, and implementing thousands of governmental operations in each of their jurisdictions. GFOA's mission is to advance excellence in public finance.

Governmental Funds - Funds generally used to account for tax-supported activities that rely mostly on current assets and current liabilities. There are five different types of governmental funds: General, Special Revenue, Debt Service, Capital Projects and Permanent Funds.

Intergovernmental Revenue - Revenue received from other governments, whether local, state or federal, usually in the form of grants, shared revenues or payments in lieu of taxes.

Mill - A tax rate based on the valuation of property. A tax rate of one mill produces one dollar of taxes on each $1,000 of property valuation.

Modified Accrual Accounting - A basis of accounting in which expenditures are accrued, but revenues are accounted for on a cash basis. This accounting technique is a combination of cash and accrual accounting since expenditures are immediately incurred as a liability, while revenues are not recorded until they are actually received or are “measurable and available”. It is recommended as the standard for most governmental funds.

Operating Budget - A financial plan for the City’s general operations, such as salaries, contract services, utilities and supplies.

Performance Indicators - Statistical information which denotes the demands for services with a department.

Property Tax - Property taxes are levied on both real and personal property according to the property’s assessed valuation and the tax rate applied.

Special Revenue Fund - A fund used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposed other than debt service or capital projects.

Special Revenue Fund - A fund used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposed other than debt service or capital projects.

Tax Increment Financing (TIF) - Funding of public investments in an area slated for development by capturing for a time, all or a portion of, the increased tax revenue that may result when the development stimulated private investment. As private investments add to the tax base with the development area, the increased tax revenue can only be used to public purposes permitted by ordinance.