Glossary of Budget terms

(15) Administration Office

Overview

The following glossary of terms is provided to offer explanations of acronyms and commonly used terms in the budget document. We have also included other financial and program terms that may be mentioned by staff or the public during budget hearings.

 

AB 8: The law that established the property tax allocation system in California following the

enactment of Proposition 13 in 1978, which imposed a 1% local property tax cap. In

San Benito County, the County General Fund’s AB8 share is approximately 13% of each

dollar collected - among the lowest of all counties.

 

ACCOUNT: A line item classification of expenditure or revenue. This is the lowest level of expenditure or revenue found in the budget. Example: "Travel & Meeting Expenses" is an account in "Services & Supplies".

 

ACCOUNTING: The process of identifying, recording, classifying and reporting information on economic events in a logical manner for the purpose of providing financial information for decision making.

 

ACCRUAL ACCOUNTING: A basis of accounting in which revenues are recognized in the period in which they are earned and become measurable, and expenses are recognized in the period incurred instead of when cash is actually received or spent. For example, in accrual accounting, revenue that was earned between April 1 and June 30, but for which payment was not received until July 10, is recorded as being received on June 30 rather than July 10. San Benito County uses the modified accrual basis of accounting.

 

ACTIVITY: A specific line of work performed to accomplish a function for which a governmental unit is responsible. Example: “Correction and Detention" is an activity performed in discharging the "Public Protection" function.

 

ADMINISTRATION: Depending on the context, refers to the County Administrative Office or County Administrative Officer also "CAO".

 

ADOPTED BUDGET: Refers to the budget as approved by the Board of Supervisors after the required public hearings and deliberations on the Proposed Budget.

 

AMADOR PLAN: For counties contracting with the California Department of Forestry & Fire Protection for fire protection services, the “Amador Plan” is an arrangement whereby counties can pay a cost differential to fund year-round staffing of CDF fire stations, including the winter months when staffing would otherwise be reduced. This ensures a constant

year-round level of fire protection for the area served.

 

ANNUALIZED COST: Operating cost incurred at annual rates for a portion of the prior fiscal year and which must be incurred at similar rates for the entire 12 months of the succeeding fiscal year.

 

APPROPRIATION: An authorization granted by the Board of Supervisors to make expenditures and to incur obligations for specific purposes. Note: An appropriation usually is time limited and must be expended before the end of the fiscal year.

 

APPROPRIATIONS LIMIT: An absolute dollar limit on the amount of funds derived from taxes that the County can legally appropriate and expend each fiscal year, which is specified by Article XIII-B of the State Constitution. Any proceeds of taxes revenues in excess of the Gann Limit must be returned to taxpayers. The base-year used on computing the Gann Limit is FY 1978-79, with adjustments to the appropriations limit allowed in succeeding fiscal years for (a)

changes in population; and (b) changes in the cost of living. Also referred to as the “Gann Limit”.

 

ASSESSED VALUATION: A valuation set upon real estate or other property by a government as a basis for levying property taxes. In California, the Assessor of each county determines the taxable values of all secured and unsecured property within his/her jurisdiction. The State Board of Equalization determines the taxable value of utilities. Under Article XIII of the State

Constitution (Proposition 13, adopted by the voters on June 6, 1978), the County Assessor values properties at 100% of full market value. Proposition 13 also modified the value of real taxable property for fiscal year 1979 by rolling back values to fiscal year 1976 levels. From this assessment base, subsequent annual increases in valuation are limited to a maximum of 2%. However, increases to full market value are allowed for property improvements or upon change of ownership. Personal property is excluded from these limitations, and is subject to annual re-appraisal.

 

ASSESSMENT ROLL: The official list prepared by the Assessor that contains the legal description of each parcel or item of property and its assessed valuation. This term is used to denote the total valuation of all taxable property in the County.

 

AUDIT: State law requires that a financial audit be done annually by an independent Certified

Public Accountant on every County. The primary objective of an audit is to determine if the County’s financial statements present fairly the County’s financial position and the financial transactions for the previous fiscal year in accordance with generally accepted accounting principles. It is customary for an independent auditor to issue a Management Letter stating the adequacy of the County’s internal controls for the safeguarding of funds and other assets as well as recommending improvements to the County’s financial management practices.

 

TYPES OF AUDITS:

  • Financial - Examination of the records and financial statements of a business or organization by an independent accountant for the purpose of expressing an opinion as to whether the financial statements present fairly the financial position at a given date and results of operations ending on that date in accordance with generally accepted accounting principles. Source documents are examined to substantiate legitimacy of transactions and internal controls are evaluated.
  • Internal - Investigation of the organization’s procedures and operations by the internal auditor to assure that they conform to the organization’s policies.
  • Management - Evaluation of management’s efficiency.
  • Compliance - Determination that the organization is complying with specific rules and regulations. Compliance audits may include the review and examination of property/ maintenance organizations, records, and operations to verify compliance with established government and Stanford requirements.

 

AUTHORIZED POSITIONS: The number of positions, their respective classification titles and salary ranges allowed in each budget unit as shown in the Schedule of Authorized Positions, which is adopted as part of the Budget. This serves as a control on the number and level of positions that may be filled in any department or program.

 

AVAILABLE FINANCING: All the means of financing a budget (current property taxes, miscellaneous revenues, and fund balance--except for encumbered reserves). Also referred to as resources.

 

AVAILABLE FUND BALANCE: The amount of fund balance that is free and unencumbered and available for financing expenditures and other funding requirements.

 

BUDGET: The planning and controlling document for the County of San Benito’s financial operation with estimates of proposed expenditures and revenues for a given period of time, known as a fiscal year, from July 1 to June 30 of the following year. The budget displays the

approved expenditures (costs) for providing services and the estimated revenues

(income) to pay for them. A department or agency may have one or more budget units

assigned to it. The budget is adopted annually by the Board of Supervisors after public

hearings on the Proposed Budget as presented by the County Administrative Officer.

Once adopted, the budget sets the maximum spending limit for departments and

programs. To this end, the budget is controlled at the object is controlled at the object level: i.e., Salaries & Benefits, Services & Supplies, Other Charges, and Fixed Assets.

 

BUDGET DOCUMENT: The written instrument compiled by the County Administrative Officer to present a comprehensive financial program to the Board of Supervisors. The budget document generally consists of two parts. The first part contains a message from the County Administrative Officer, together with a summary of the proposed expenditures and the means of financing them. The second consists of schedules supporting the summary. These schedules show in detail the information as to the past years actual revenues, expenditures and other data used in making the estimates. In addition to the budget document, a budget resolution is necessary to put the budget into effect.

 

BUDGET MESSAGE: A general discussion of the Proposed Budget as presented in writing by the County Administrative Officer to the Board of Supervisors. This letter contains an explanation of the principal budget items, an outline of financial transactions during the past period and its financial status at the time of the message, and recommendations regarding the financial policy for the coming fiscal year.

 

BUDGET POLICIES: General and specific policies adopted by the Board of Supervisors that provide guidance for budget preparation, approval and administration.

 

BUDGET PROCESS: The county budgetary process is ongoing and involves the following four generic phases:

  1. Preparation - This is shared the responsibility of department heads, the County Administrative Officer, and the County Auditor. It begins with each department head analyzing past financial data and projecting expenditure needs and revenues in order to develop and justify a requested budget for the coming fiscal year.
  2. Review - The CAO reviews and analyzes department budget requests, confers with department heads, and pares requested expenditures in order to prepare a proposed budget that is balanced, with revenues and fund balances available offsetting recommended expenditures.
  3. Adoption - Once the proposed budget has been prepared by the CAO, it is presented to the Board of Supervisors for consideration, possible modification, and approval. The public is invited to participate in this phase via public hearings on the proposed budget.
  4. Execution/Control/Revision - The proposed budget, as modified by the Board of Supervisors, becomes the final budget. Budgetary accounts are set up by the County Auditor to record the estimated revenue and approved expenditures for the various funds. Budgetary control and oversight is exercised by the CAO and County Auditor throughout the year to ensure that expenditures stay within appropriated amounts and that revenues are realized as planned. In response to changing economic conditions and circumstances, to transfer money between programs, or to accept and spend unanticipated revenue such as grants, the Board of Supervisors can amend the budget.

 

BUDGET, RECOMMENDED: The level of expenditures and revenues for a particular activity, program, or department as recommended by the County Administrative Officer for the upcoming fiscal year. See PROPOSED BUDGET.

 

BUDGET, REQUESTED: The level of expenditures and revenues for a particular activity, program, or department as proposed by the department head for the upcoming fiscal year.

 

BUDGET, REVISED: Refers to any changes or amendments made to the Final/Adopted/Approved Budget during the fiscal year. Such a change will consist of an increase or decrease in revenues that are recognized or in the level of authorized expenditures. The budget is not a static document and may be revised as needed during the fiscal year; e.g., to accept and expend unanticipated (non-budgeted) revenues.

 

BUDGET TRANSFER: A movement of budget dollars from one activity/account to another and/or from one object code to another. Often results in a transfer of funding.

 

BUDGET UNIT: An accounting and financial control unit for which a separate appropriation is approved by the Board of Supervisors. A department or agency may be divided into one or more budget units. Each budget unit has a collection of expenditure and revenue accounts

(line items) necessary to fund a certain organizational unit, division, or set of programs.

 

BUDGETARY CONTROL: The control or management of the approved budget throughout the fiscal year to ensure that expenditures are within the limitations of available appropriations and available revenues. In San Benito County, budgetary control is exercised at the object level within program budgets. Budgetary controls are required for sound financial management and oversight.

 

CAO: Acronym for County Administrative Officer or County Administrative Office, depending

on context.

 

CAPITAL OUTLAY FUND: Used to account for expenditures on buildings, construction, and land acquisition.

 

CAPITAL PROJECTS: The county's acquisitions, additions, and improvements to fixed assets; e.g., buildings, building improvements, and land purchases.

 

CASH ACCOUNTING: A basis of accounting under which transactions are recognized only when cash is received or disbursed.

 

CDF: California Department of Forestry and Fire Protection. The county contracts with CDF

for fire protection in the unincorporated areas of the county except for Aromas, which

is part of a multi-county fire protection district.

 

CERTIFICATES OF PARTICIPATION: A certificate showing participation through ownership of a “share” of lease payments or lease-purchase agreement. It is a method of financing a capital project whereby a tax-exempt corporation is formed, sells interests (certificates of participation) in the capital project, leases the project to a local government, and repays the certificates with the lease payments. After the certificates have been repaid, the local government typically has the option to purchase the capital project it has been leasing. There is no voter approval necessary for this type of financing. Since these leases are financing arranged for individual agencies and typically incorporate a clause abrogating the

agreement in the event of non-appropriation of revenues by the legislative body, the COPs do not qualify as debt for purposes of statutory debt limitations.

 

CHARGES FOR SERVICES: A charge or fee imposed by a County department for services rendered to the public. Charges are imposed in order to insure that those citizens receiving the service pay at least a portion of the cost of providing the service. Also known as “user fees”.

 

CHART OF ACCOUNTS: Key underlying structure of the General Ledger, providing a means for collecting, classifying and reporting on financial transactions. A listing of all accounts within the financial accounting system, the Chart of Accounts shows the account structure an

organization uses to record financial transactions and maintain account balances.

 

COG: Council of Governments of San Benito County

 

COMMUNITY FACILITIES DISTRICT: Under the Mello-Roos Community Facilities Act of 1982 (Government Code Section et seq.), a legislative body may create within its jurisdiction a special district that can issue tax-exempt bonds for the planning, design, acquisition, construction and/or operation of public facilities, as well as provide public services to district residents. Special tax assessments levied by the district are used to repay the bonds.

 

COMPENSATION (EMPLOYEE): Salary and benefits given to employees for their services.

CONSUMER PRICE INDEX (CPI): A statistical measure of change, over time, in the prices of goods and services in major expenditure groups--such as food, housing, apparel, transportation, and health and recreation--typically purchased by urban consumers. Essentially it measures the purchasing power of consumers' dollars by comparing what a sample "'market' basket" of goods and services costs today with what the same sample market basket cost at an earlier date. The United States Government, Bureau of Labor Statistics, maintains the Consumer Price Index.

 

CONTINGENCIES: Contingencies are established by the Board of Supervisors to set aside funding for emergencies or other unforeseen expenditures that occur after adoption of the Final Budget and which cannot be absorbed within other existing appropriations. The appropriation is also normally used to finance major items for which the total cost cannot be determined in advance (e.g., settlement of pending litigation). It is limited to not more than 15% of the appropriations in any fund.

 

COST: The estimated expenditure for a particular resource.

 

COST ALLOCATION PLAN: The documents identifying, accumulating, and allocating or developing billing rates based on the allowable costs of support or overhead services provided by the County to departments or programs that are supported by state and/or federal funds. San Benito County uses its Cost Plan to recover indirect costs from state and federal grant programs. This plan is prepared following federal guidelines specified in OMB Circular A-87.

 

COST APPLIED: Expense and reimbursement transactions in which one budget unit is reimbursed or charged by another budget unit within the same fund for expenditures or expenses initially made by one budget unit, but which are properly applicable to another. The transactions results in a reduction in expenditures or expenses in one budget unit and a corresponding increase in the other (expenditure transfer). The result for reporting purposes is to eliminate the original charge and to reflect only in the proper budget unit. Cost applied is intra-fund as opposed to inter-fund transfers.

 

COST OF LIVING ADJUSTMENT (COLA): Commonly used to refer to general salary increases granted to employees or increases in benefit payments for recipients of public assistance to keep pace with inflation in the cost of goods and services as measured by the CPI.

 

COUNTY SERVICE AREA (CSA): A geographic sub-area of a County used for the planning and delivery of street maintenance and lighting, water, sewer, and/or other services based on an assessment of the service needs of the population in that area.

 

COUNTYWIDE PROGRAMS: Programs that benefit all areas of the County, and are provided on an area-wide basis, both within city limits and outside city limits. (Examples are: Public Health programs, Social Services, County Jail, Juvenile Hall, and Family Support).

 

CSAC: The California State Association of Counties.

 

CSWD: Community and Workforce Services Development Department.

 

DEBT SERVICE: Payment of the principal and interest on an obligation resulting from the issuance of bonds, notes, or certificates of participation (COP’s).

 

DEBT SERVICE FUND: A fund established to finance and account for the payment of interest and principal on bonds or other long-term borrowing.

 

DEFICIT: An excess of expenditures over revenues (resources) during an accounting period, such as a fiscal year. By law, counties are required to adopt a balanced budget in which

planned expenditures are offset by expected revenues.

 

DEPARTMENT: A major organizational unit in County government in which programs similar in nature are grouped together under the management of an appointed or elected official (e.g., the Planning and Building Department or the Sheriff-Coroner’s Department). One or more program budget units may be used to fund a department and account for its expenses. A large department or two or more departments that have consolidated may be referred to as an “agency”, such as the Health & Human Services Agency.

 

DEPARTMENT HEAD: A county official appointed by the Board of Supervisors or County Administrative Officer or elected by San Benito County voters who is responsible for managing a County department.

 

DESIGNATED FUND BALANCE: A portion of an unreserved fund balance that has been "earmarked" or tentatively set aside by the CAO or the Board for specified purposes.

 

DESIGNATION: An account containing money set aside by the Board of Supervisors for a specific future use. Money in a designation is earmarked for a specific use, but may not be legally restricted to that use (see Reserve).

 

DISAGREED ITEMS: Difference in estimates for the following fiscal year between the submitting department’s request and the County Administrative Officer’s recommendations must be submitted in writing by law. Unless the department withdraws such requests, they

are shown in the budget document as “Disagreed Items”.

 

DISCRETIONARY REVENUES: Refers to revenues, such as property and sales taxes, which are available to the Board of Supervisors without restriction to be spent on the General Fund operations of County government, including police protection, parks, libraries, etc. Discretionary revenues are the opposite of “restricted revenues”, such as certain grants and subventions from the state and federal governments and user fees, which can only be spent on designated programs. Discretionary revenues are also referred to as “general purpose revenues” or “non-departmental revenues” in that they are generated by, or assigned to, any

particular department or program.

 

DIVISION: A sub-section or major activity within a department that provides specific services. For example, the Juvenile Hall is a division of the Probation Department and Parks is a division of the Public Works Department.

 

DOUBLE ENTRY: A system of bookkeeping that requires an entry to the debit side of an account or accounts for the corresponding amount or amounts of the entry to the credit side of another account or accounts.

 

EMPLOYEE BENEFITS: Amounts paid on behalf of employees by the County in addition to their gross salaries. Examples include: group health and life insurance premiums, contributions to Social Security and the Public Employees Retirement System, and payments for Workers’ Compensation and Unemployment Insurance programs. The total compensation of an employee includes their gross salary and the cost of Employer contributions to fringe

benefits.

 

ENCUMBRANCE OR ENCUMBERED FUNDS: An obligation in the form of a purchase order, contract, or other commitment, which is chargeable to an appropriation, and for which a part of the appropriation is reserved. In some cases reserves are carried over into succeeding fiscal years. The encumbrances end when the obligations are paid or otherwise terminated.

 

ENTERPRISE FUND: A fund established to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Example: airport, golf course, water and sewer service.

 

EQUIPMENT: Tangible property of a more or less permanent nature, other than land or buildings and improvements thereon. Examples are machinery, tools, trucks, cars, furniture, and furnishings.

 

ERAF: Education Relief Augmentation Fund. During the early 1990s, in response to significant state budget deficits, the state permanently shifted over $3 billion of local property taxes from cities, counties, and special districts to schools. About 2/3 of the shift comes from counties; the amount changes each year in proportion to growth in assessed valuation of taxable property. The purpose of this tax shift - commonly referred to as "ERAF," after the fund into which the property taxes are deposited (the Educational Revenue Augmentation Fund) - was to offset, on a dollar-for-dollar basis, required state spending for schools.

 

ESTIMATED ACTUAL: Refers to the amount of expenditures estimated to be made, or the amount of revenue estimated to be received, by the end of the fiscal year. Estimated Actual projections of expenditures or revenues are usually made several months before the end of the fiscalyear.

 

EXPENDITURE: The cost of goods or services funded by budget appropriation. An expenditure of funds decreases net financial resources. Expenditures include current operating expenses that require the current or future use of net current assets, debt service, and capital outlays.

 

EXTRA-HELP POSITION: A non-regular, temporary position created to meet a peak workload or other unusual work situation; can include season or recurrent intermittent employment. Also referred to as a TEMPORARY POSITION.

 

FEE: A fee is a charge imposed by the County on the beneficiary or recipient of a service it

provides. Its purpose is to help recover some or all of the costs incurred by the County in providing a service. By law, a fee or charge for service may not exceed the cost of providing a service.

 

FINAL BUDGET: Approved legal spending plan for a fiscal year. In San Benito County, the Board of Supervisors is responsible for approving a final budget by October 1 each year. The Final Budget is the budget document approved by the Board of Supervisors after required

public hearings and deliberations on the Proposed Budget together with any subsequent

additions, cancellations, or transfers. The Final Budget is a changing document reflecting

the current status of the authorized or approved budget at any time between its adoption and the end of the fiscal year.

 

FIRE FUND: A restricted-use fund used to account for those property taxes and other revenues that are designated to fund structural fire protection services in the unincorporated areas of the County.

 

FISCAL YEAR: Twelve-month period for which a budget is prepared. In San Benito County, the fiscal year is July 1 to June 30.

 

FISH AND GAME FUND: Accounts for all the fish and game fines collected by the courts. Expenditures from this fund must be for game and wildlife propagation and education.

 

FIXED ASSET: An asset of long-term character such as land, buildings, machinery, automotive equipment, furniture, and other equipment. In the private sector, these assets are

typically referred to as property, plant, and equipment.

 

FRINGE BENEFITS: Benefits to an employee paid for by the county. Examples include (1) group health, dental and life insurance plans; (2) contributions to employee PERS retirement and Social Security; (3) workers compensation payments; and (4) unemployment insurance

payments.

 

FRANCHISE: A special privilege granted by a government permitting the continued use of public property and usually involving the elements of monopoly and regulation. Examples

include: telephone, gas and electric utilities; cable television; and refuse collection. FTE: (Full-time Equivalent): This term is used in the budget to designate the equivalent of one full-time employee (2,080 hours per year). One FTE is equivalent to one full-time employee or any combination of part-time employees whose employment percentages total 100%.

 

FULL-TIME EMPLOYEE (FTE) OR POSITION: A full-time position is one in which an employee is budgeted to work 40 hours per week or 2,080 hours each year.

 

FUNCTION: A group of related activities aimed at accomplishing a major service for which a

governmental unit is responsible. The State Controller specifies these designations. The County Budget is divided into nine functions: General, Public Protection, Public Ways and Facilities, Health & Sanitation, Public Assistance, Education, Recreation, Debt Service, and Reserves/Contingencies. Each function is a group of related activities aimed at accomplishing a major service for which a governmental unit is responsible. Example: "Public Protection" is a function made up of several activities including “Police Protection”, “Corrections and Detention” and “Judicial”.

 

FUND: Independent fiscal and accounting entity; e.g., Public Works, Health and Capital Outlay Funds. Governmental entities, including counties, organize and operate their accounting and budgeting systems on a fund basis. The formal definition of a fund is a balanced set of accounts for a major County activity, which shows an equal amount of income and expenditures. Funds may contain one or more budget units. With the exception of the General Fund, which accounts for general purpose spending and is funded by discretionary revenues, each fund is restricted to use for specified purposes. Establishing funds enables the County to account for the use of restricted revenue sources and carry on specific activities or pursue specific objectives.

 

FUND BALANCE: The excess of assets and estimated revenues of a fund over its liabilities and appropriations. Fund balance represents a surplus carried over from the previous fiscal

year. Portions of the fund balance may be encumbered, reserved, or designated. The amount of fund balance available to finance the budget after deducting encumbrances and reserves is known as the “fund balance available”. This portion of fund balance is available, along with estimated revenues, to finance the succeeding year’s budget. In simple, non-accounting terms, ignoring such things as loans, designations, and reserves, fund balance is the amount of money available at the end of the fiscal year. It can be considered the beginning fund balance + actual revenues - actual expenditures. Fund balance of county governments can be divided into three categories:

  1. Reserved (Restricted) - The portion of fund balance that is legally segregated for a specific future use and is not available for expenditure. Reserve for Encumbrances and Reserve for Inventory are reserved portions of fund balance.
  2. Designated (Unreserved and Unrestricted) - A portion of the fund balance established to indicate tentative plans for the future use of current resources. For example, the Board of Supervisors may designate a portion of fund balance for future capital projects.
  3. Unreserved (Unrestricted) and Undesignated- Fund balance is the portion of a Fund balance that is not reserved or designated and, therefore, available for financing expenditures.

 

FUND TYPES: Any one of seven categories into which all funds are classified in governmental accounting. The seven fund types are: General, Special Revenue, Debt Service, Capital Projects, Enterprise, Internal Service, and Trust and Agency.

 

GENERAL FUND: The major Countywide Fund. The General Fund is the primary operating fund of the County. All revenues that are not allocated by law or contract to a specific fund are allocated to the General Fund. With the exception of subventions or grants that are restricted for specific uses, General Fund revenues are discretionary and can be used

for any legitimate governmental purpose.

 

GENERAL LEDGER: A record containing the accounts needed to reflect the financial position and the results of operations of a county. In double-entry bookkeeping, the debits and credits in the general ledger are equal (i.e., the debit balances equal the credit balances).

 

GENERAL OBLIGATION BOND: A bond whose repayment is guaranteed by pledging all the assets and revenues of a governmental agency.

 

GENERAL PLAN: A compendium of policies regarding long-term development, in the form of maps and accompanying text. The legal document required of each local agency by the State of California Government Code Section 65301 and adopted by the City Council or Board of Supervisors. In California, the General Plan has seven mandatory elements

(Circulation, Conservation, Housing, Land Use, Noise, Open Space, Safety, and Seismic

Safety) and may include any number of optional elements (e.g., Economic Development,

Parks and Recreation, Public Services and Utilities, Tahoe Basin).

 

GOVERNMENT AUDIT STANDARDS: Standards established by the U.S. General Accounting Office (GAO) in its publication Government Auditing Standards ("Yellow Book") for the conduct and reporting of financial and compliance audits. GAS set forth general standards applicable to audits and separate standards of fieldwork and reporting for audits. The GAS standards of fieldwork and reporting for financial audits incorporate and build upon GAS.

 

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP): Uniform minimum standards and guidelines for financial accounting and reporting. They govern the form and content of the financial statements of an entity. GAAP encompasses the conventions; rules and procedures necessary to define accepted accounting practice at a particular time. They include not only broad guidelines of general application, but also detailed practices and procedures. GAAP provides a standard by which to measure financial presentations.

 

GENERALLY ACCEPTED AUDITING STANDARDS: Standards established by the American Institute of Certified Public Accountants the conduct and reporting of financial audits. There are 10 basic GAAS, classed into three broad categories: general standards, standards of fieldwork, and standards of reporting. The Auditing Standards Board of the AICPA publishes Statements on Auditing Standards (SAS) to comment and expand upon these basic standards. These SAS, together with the 10 basic standards, constitute GAAS. These GAAS set forth the objectives of the audit and establish measures that can be applied to judge the quality of its performance.

 

GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB): The authoritative accounting and financial reporting standard-setting body for state and local governmental agencies, including counties.

 

GRANT: A contribution from one governmental unit to another usually made for a specific

purpose, activity, or facility, and time period.

 

H&HSA: Health & Human Services Agency.

 

IHSS: In-Home Supportive Services.

 

IMPACT FEES: Fees charged by the County to developers of undeveloped land to mitigate, in whole or in part, the fiscal impacts of new development on County service delivery systems and infrastructure. Development impact mitigation fees may be used, for example, to pay for the cost of County equipment, facilities and other public improvements needed to serve newly developed residential, commercial or industrial properties. Impact fees

are levied on a one-time basis and can only be used for capital costs. California

Government Code Section 66000, et seq, specifies that development impact fees shall

not exceed the estimated reasonable cost of providing the service for which the fee is

charged.

 

IMPROVEMENTS: Buildings, other structures, and other attachments or annexations to land which are intended to remain so attached or annexed, such as sidewalks, trees, drives, tunnels, drains, and sewers.

 

INTER-FUND TRANSFERS: Monies transferred from one fund to another. Such money is transferred to finance the operations of another fund or to reimburse that fund for certain expenditures/expenses. For example, an operating subsidy provided by the General Fund to the Public Works Fund to make up the difference between the financing requirements of that fund and the amount of financing available. Also known as “operating transfers”. In the aggregate, transfers in and transfers out offset each other in the fiscal year.

 

INTRA-FUND TRANSFERS: A transfer of costs or expenses between departments or programs within the same fund. Through this mechanism, a service-rendering program reduces its expenditures by an amount that is transferred or “cost applied” to the program or department benefiting from the services rendered. Also referred to as COST APPLIED.

 

LAFCO: Local Agency Formation Commission.

 

LAPSE: As applied to appropriations, the automatic termination of an appropriation. An

appropriation is generally made for a certain period of time (i.e., fiscal year). At the end

of this period, any unexpended or unencumbered balance lapses, unless otherwise

provided by law.

 

LINE ITEM: Used interchangeably with “Account”. (See ACCOUNT). Line items are the lowest and most detailed level of expenditure classification. Groups of similar expenditure line items or accounts are known as budget objects.

 

LINE ITEM BUDGET: A budget that lists each expenditure category (salary, materials, telephone service, travel, etc.) separately along with the dollar amount budgeted for each specified category. A budget document that lists detailed expenditures and revenue categories. Volume 2 of the Proposed Budget and the Final Budget document both present the budget broken down by numerous individual line items or accounts.

 

MAINTENANCE OF EFFORT: Refers to federal or state statutory or regulatory program requirements that the County must maintain to participate in a program and/or to receive funding for a program.

 

MANDATE (Mandated Service): A legal requirement, usually imposed by State or Federal law. This term is used to refer to County services that are provided to comply with State or Federal laws.

 

MATCHING FUNDS: Funds the state or federal government requires the County provide in order to receive to allocations for specific purposes. This might be a fixed dollar amount or a percentage of the total cost of a particular program.

 

MODIFIED ACCRUAL BASIS: A budgetary accounting system used by all governmental fund types. Revenues are recognized when they become both measurable and available (i.e. the amount of transaction can be determined and collected within the current period or soon enough thereafter to be used to pay liabilities of the current period). Expenditures are

recognized when the related fund liability is incurred.

 

NET COUNTY COST: The net cost (or unreimbursed cost) of a budget unit to the County’s General Fund. Net County Cost equals the excess of expenditures over revenues generated by and assigned to a particular program, department or fund (e.g., state and federal grants or

subventions, charges for services, etc.). The Net County Cost of a particular program or fund is subsidized by non-departmental discretionary General Fund revenues (e.g., property and sales taxes) and, in addition, if a non-General Fund budget, any beginning fund balance available (the excess of revenues over expenditures for the previous year) and/or amounts cancelled from reserves.

 

NON-DEPARTMENTAL: Designates revenues and expenditures that the County cannot specifically designate to any program or department. Property taxes are non-departmental revenues. Property insurance is a non-departmental expense.

 

OBJECT: A major category of appropriation. Example: "Salaries and Employee Benefits", "Services & Supplies", “Other Charges”, and “Fixed Assets”. Objects represent groupings of similar or related expenditure accounts or line items. For example, the “Services & Supplies”

object includes all expenditure accounts relating to purchase of office supplies, maintenance of equipment and structures, rents, contracts for professional services, telephone service, membership dues, etc. The budget is controlled at the object level.

 

OPERATING BUDGET: Refers to that portion of San Benito County’s annual budget that applies to non-capital projects and non-capital outlays; that is, the operating and maintenance costs for the fiscal year, including employee compensation, services and supplies, and other charges.

 

ORDINANCE: A formal legislative enactment of the Board of Supervisors. It has the full force and effect of law within County boundaries unless pre-empted by state or federal law. An

ordinance has a higher legal standing than that of a Resolution.

 

OTHER CHARGES: A payment to an agency, institution, or person outside the County Government. An expense not associated with the operating cost of a budget unit. Example: "Medi-Cal contributions" or “Aid to Families with Dependent Children” (AFDC) payments.

 

PART-TIME POSITION: A part-time position is one in which an employee is budgeted to work less than 40 hours per week. Part-time employees must work at least 20 hours per week (0.5 FTE) on a regular basis to receive County-paid benefits such as a holidays, vacation, sick pay,

retirement benefits, health insurance, etc., but do receive Social Security and Medicare

benefits.

 

PROGRAM: As subdivisions of departments, programs are budgetary or organizational units of government with limited sets of work responsibilities within their respective departments. Programs also serve to increase budgetary accountability. For example, “Jail” and “Sheriff’s Patrol” are programs within the Sheriff’s Department, and each has a separate budget.

 

PROPOSED BUDGET: The working document for the fiscal year under discussion. Approval of this document does not generally allow expenditures for new programs or fixed assets. The County Administrative Officer is responsible for preparing and submitting the Proposed Budget to the Board of Supervisors for consideration. Following budget hearings, at which time the Board may increase or decrease proposed revenues and expenditures, the Board

adopts the Final Budget.

 

PROPOSITION 4: The State-wide ballot initiative measure approved by the voters in November 1979, which established the Gann Appropriations Limit through amendment of the State Constitution (Article XIII-B of the State Constitution). See Appropriations Limit.

 

PROPOSITION 13: A tax limitation initiative approved by the voters in 1978 which provided for:

  1. a 1% property tax limit (tax rates to repay existing voter-approved bonded indebtedness are excluded from the limit),
  2. assessment restrictions establishing 1975 level values for all property, with an allowable increase of 2% annually and reappraisal to current value upon change in ownership and new construction,
  3. a two-thirds vote of the electorate for local agencies to impose "special taxes".

 

PUBLIC WORKS FUND: Accounts for expenditures on road, street, and bridge construction and improvements.

 

REALIGNMENT FUNDS: These funds come from vehicle license fee and sales tax revenue collected by the state and allocated to counties. The funds are "a backfill" of the loss of state General Fund support for health, social services and youth correction programs.

 

RESERVE: An account that contains money set aside for a legally restricted future use. A reserve is not an appropriation, and there is no limitation on the amount of reserve that can be established.

 

RESERVED FUND BALANCE: That portion of the fund balance that is not appropriable for expenditure or that is legally segregated for a specific future use.

 

RESOLUTION: A special order of the Board of Supervisors that has lower legal standing than an Ordinance. The Final Budget is adopted by resolution.

 

RESOURCES: The total amount available for appropriation. Includes estimated revenues, inter-fund transfers (e.g., General Fund contribution to Mental Health), beginning fund balances available (the excess of revenues over expenditures from the previous fiscal year), and cancellation of any prior year reserves (accumulated funds set aside for specific purposes) available to fund the total financing requirements (expenditures) for the fiscal year under consideration.

 

REVENUES: Sources of income available to finance County services or programs during a fiscal year, including transfers between funds. Examples: taxes, state and federal aid, interest on investments, fines and forfeitures, fees for licenses and permits, charges for services,

etc.

 

SALARIES AND BENEFITS: Accounts that fund employee-related costs, principally salaries for full and part-time employees as well as overtime and temporary employee wages and the cost of employer-paid benefits, such as health insurance, Social Security, and retirement

contributions.

 

SALES TAX: A tax levied on the sale of goods and services to consumers. The sales tax rate in San Benito County is 7%, of which all but 1% goes to the State of California. The local sales

tax rate is 1%. The County’s 1% sales tax rate applies only to transactions in the

unincorporated areas of the County whereas the cities of Hollister and San Juan Bautista

receive 1% of the sales tax collected within their respective jurisdictions. The State

Board of Equalization collects all sales tax revenue.

 

SECURED TAXES: Taxes levied on real properties in the County that must be "secured" by lien on the properties.

 

SERVICES AND SUPPLIES: Accounts that establish expenditures for most of the operating expenses of county departments and programs. Includes a variety of purchased goods and services. For example, office supplies, travel, rent, professional and specialized services, telephone service, etc.

 

SPECIAL DISTRICT: A unit of local government generally organized to perform a single function or a restricted number of related functions. Examples: water treatment and distribution, fire, hospital, air pollution control, and cemetery districts. Special districts usually have the power to incur debt and levy taxes.

 

SPECIAL FUNDS: Funds in the County budget apart from the General Fund that is segregated so that both revenues and expenditures are accounted for separately. These include the Public Works (Road) Fund, Capital Outlay Fund, Victim-Witness Fund, and Fish and Game Fund, among others.

 

SUBVENTION: Monies that are provided to the County after being collected by an outside agency. Example: most of the county welfare programs are financed by state and federal income taxes. The County expends the money and is reimbursed by state and federal

subventions.

 

SUPPLEMENTAL ASSESSMENT: An assessment of real property occurring after the regular assessment roll is filed on June 30th of each year as a result of new construction or a change in ownership.

 

TAXES: Compulsory charges levied by a government for the purpose of financing services

performed for the common benefit of the community. There are two types of taxes allowed by the Government Code: general taxes are imposed for general governmental purposes, and special taxes are imposed for specific purposes. This term does not include specific charges made against particular persons or property for current or permanent benefits, such as special assessments to finance certain public improvements. Neither does the term include charges for services rendered only to those paying such charges, such as, for example, building permit fees.

 

TAX LEVY: The amount of tax dollars billed to taxpayers based on the imposition of the property tax rate on the assessed valuation.

 

TAX RATE: The amount of tax levied for each $1,000 of assessed valuation. The tax rate is multiplied by the assessed valuation to determine the total amount. Proposition 13 limits the total property tax rate of all local taxing agencies to 1% of assessed valuation except where

the voters have approved a higher tax rate. San Benito County’s share of the 1% local

property tax is about 13 cents of every dollar.

 

TEMPORARY EMPLOYEE: An employee hired to perform work for a County department on either a part-time or full-time basis, but for less than 1,000 hours per fiscal year. Temporary employees are at-will and can be terminated at any time with or without cause and without right of appeal. They are not eligible for benefits other than Social Security. Also known as

“Extra-Help Employee”.

 

TRANSIENT-OCCUPANCY TAX: A percentage tax that is assessed on the daily rental rate charged for hotel and motel rooms as well as space in campgrounds and recreational vehicle parks in the County’s unincorporated areas.

 

UNINCORPORATED AREA: The areas of the County outside incorporated cities; i.e. Hollister and San Juan Bautista. The County is responsible for providing police, fire protection and road maintenance services to residents of unincorporated areas. (See County Service Areas).

 

UNDESIGNATED FUND BALANCE: That portion of a fund balance that is available for spending or appropriation and has not been “earmarked” for specified purposes by the County Administrative Officer or the Board of Supervisors.

 

UNRESERVED FUND BALANCE: That portion of a fund balance available for spending or appropriation in the future.

 

UNSECURED TAX: A tax on properties such as office furniture, equipment, and boats, which are not located on the owner’s property.

 

WELFARE & INSTITUTIONS CODE, SECTION 17000: This state statute defines county responsibilities for the care of the medically indigent and low income individuals who need financial assistance.