Glossary

Glossary of Terms

Academic Blueprint - An eight-year plan for expansion of academic programs (degrees and degree options) that includes the design, processing and implementation phases, complements the college and academic senate processes and takes into account State and regional needs, student demand, pedagogical concerns, resources and collaborations.

Accounting system - The methods and records used to accurately report transactions and to maintain accountability for assets and liabilities.  This system is used to identify, measure and communicate economic information to various users.

Accounts Payable (AP) - Amounts owed for the purchase of inventory, goods, or services acquired in the normal course of business.

Accounts Receivable (AR) - An amount due from the customer, but not yet collected.  Accounts receivable is an asset.

Accrual Basis of Accounting - A method of accounting that recognizes the financial effect of transactions, events, and inter-fund activities when they occur, regardless of the timing or related cash flows.  A system of accounting in which revenues are recognized when earned and expenses when incurred.

AD-NOATS - Accounting Department-Notice of Accounting Transactions

Agency fund - A fund consisting of resources received and held by the governmental unit as an agent for others; for example, taxes collected and held by a municipality for a school district.  Note: Sometimes resources held by one fund of a governmental unit for other funds of the unit are handled through an agency fund. An example would be taxes held by an agency fund for redistribution among other funds.

Allocation - A distribution of funds or an expenditure limit established for an organizational unit or function.

Allotment - The approved division of an amount (usually of an appropriation) to be expended for a particular purpose during a specified time period.  An allotment is generally authorized on a line item expenditure basis by program or organization.

Appropriation - An authorization from a specific fund to a specific agency to make expenditures or incur obligations for a specified purpose and period of time. In California state government, the budget act contains many appropriations, or items. These appropriation items are limited to one year, unless otherwise specified. Appropriations are made by the state legislature in the annual budget act and in other legislation. Legislation can provide for continuing appropriations (which require no subsequent legislative action) and are also provided by the California constitution.

Appropriations limit - In California state government as defined in section 8 of article xiiib of the California constitution, enacted by the passage of proposition 4 at the November 6, 1979 general election and amended with the passage of proposition 111 at the June 5, 1990 primary election, the growth in the level of certain appropriations from tax proceeds are generally limited to the level of the prior year's appropriation limit as adjusted for changes in California per-capita personal income and population. Other adjustments may be made for such reasons as the transfer of services from one government entity to another.

Assets - Financial representations of economic resources owned by an organization or individual.

Audit - The examination of documents, records, reports, systems of internal control, accounting and financial procedures, and other evidence for one or more of the following purposes: A) To ascertain whether the statements prepared from the accounts present fairly the financial position and the results of financial operations of the constituent funds and account groups of the governmental unit in accordance with generally accepted accounting principles and on a basis consistent with that of the preceding year;  B) To determine the compliance with applicable laws and regulations of a governmental unit's financial transactions; C) To review the efficiency and economy with which operations were carried out; D) To review effectiveness in achieving program results.

Auxiliary enterprises - Activities of a college or university, which furnish a service to students, faculty, or staff on a user-charge basis. The charge is directly related to, but not necessarily equal to, the cost of the service. Examples include college unions, residence halls, stores, faculty clubs, and intercollegiate athletics.  

Balance sheet - A statement which discloses the assets, liabilities, reserves, and equities of a fund or governmental unit at a specified date, properly classified to exhibit financial position of the fund or unit at that date.

Budget - A plan of financial operation embodying an estimate of proposed expenditures for a given period, and the proposed means of financing them. Used without any modifier, the term usually indicates a financial plan for a single fiscal year.

Budget bill and budget act - In California state government, the budget bill is prepared by the state department of finance and is submitted to the legislature in January accompanying the governor's budget. The budget bill is the governor's proposal for spending authorization for the subsequent fiscal year for on-going programs authorized by the legislature. The state constitution requires the legislature to pass the budget bill and send it to the governor for signature by June 15. After signature by the governor, the budget bill becomes the budget act.

Budgetary accounts - Those funds, which reflect budgetary operations and condition, such as estimated revenues, appropriations, and encumbrances, as distinguished from proprietary accounts.

Budgetary basis of accounting - The method used to determine when revenues and expenditures are recognized for budgetary purposes.

Budget balance available (BBA) - In the General Fund, it is the excess of budget over expenditures and encumbrances that is available.  In proprietary funds, it is the excess of assets over liabilities, or fund balance, that is available.

Budget model - A budget model has three components, the format, the projection assumptions, and the time period covered.  Format refers to level of detail including the categories of revenues and expenditures that are recorded in the budget and to the nature of the categories used - some budget models detail financial projections by organizational unit and others by type of activities. Budget models project financial activity and may show actual revenues and expenditures for comparison. Assumptions can be very conservative, assuming enrollment and revenue projections will fall short, or more aggressive, assuming that targets will be exceeded.  Budget models differ by the time period projected.  In general, a budget model that projects farther into the future will be much more speculative and uncertain than a budget model that predicts a shorter time period.

Campus Wide Activities (CWA) - Campus Wide Activities is a divisional unit within the General Fund that has been established to account for those programs that support most of the campus community.  The President has oversight responsibilities for all Campus Wide Activities and manages the resources allocated to each program.

Capital budget - A plan of proposed capital outlays and the means of financing them for the current fiscal period. It is usually a part of the current budget. If a capital program is in operation, it will be the first year thereof. A capital program is sometimes referred to as a capital budget.

Capital outlay - In California state government, the term capital outlay includes purchase of land and related costs, construction projects and related costs, and equipment related to a construction project. Construction projects include new construction, alteration, and extension or betterment of existing structures. Capital outlays are classified as either major projects or minor projects. Each state department or agency must submit to the state department of finance, by February 1 of each fiscal year, a five-year plan for capital outlay.

Capital outlay - group 1 and group 2 equipment - In California state government, all equipment related to a capital outlay project is classified as a major capital outlay. Equipment, when used in connection with a capital outlay project, shall include group 1 and group 2 equipment. Group 1 equipment is defined as installed (permanently attached to the facility) and shall be budgeted as part of the construction phase. Group 2 is defined as moveable equipment and shall be budgeted as a separate phase.

Capital outlay - major projects - In California state government, these are construction projects for new construction, alteration, extension or betterment of existing structure, estimated to cost in excess of $250,000. The purchase of equipment related to a specific construction project, irrespective of amount, is classified as a major capital outlay. The purchase of land (including related cost such as condemnation and court costs, legal fees, and title reports, etc.), irrespective of amount, is classified as major capital outlay.

Capital outlay - minor projects - In California state government, these are construction projects for new construction, alteration, extension or betterment of existing structure, estimated to cost $250,000 or less.

Capital program - A plan for capital expenditures to be incurred each year over a fixed period of years to meet capital needs arising from the long-term work program or otherwise. It sets forth each project or other contemplated expenditure in which the government is to have a part and specifies the full resources estimated to be available to finance the projected expenditures.

Carry Over Funding – Sometimes referred to as “rollover” funds.  Budget balances available at the end of one fiscal year that can be carried forward into the next fiscal year and are in addition to the next fiscal years budget allocation.

Cash - As used in connection with cash flows reporting, includes not only currency on hand, but also demand deposits with banks or other financial institutions.  Cash also includes deposits in other kinds of accounts or cash management pools that have the general characteristics of demand deposit accounts in that the governmental enterprise may deposit additional cash at any time and also effectively may withdraw cash at any time without prior notice or penalty. 

Cash flow statement - The financial statement that summarizes the cash receipts and cash payments during the period from operating, investing and financing activities.  Amounts recorded as accruals, which do not affect cash, are not reflected in this statement.

Chargeback - An expenditure made for or on behalf of another governmental unit, fund, or department, or for a private individual, firm, or corporation which will subsequently be recovered in cash or its equivalent.

Continuing appropriation - An appropriation which, once established, is automatically renewed without further legislative action, period after period, until altered or revoked.

Cost accounting - That method of accounting which provides for the assembling and recording of all the elements of cost incurred to accomplish a purpose, to carry on an activity or operation, or to complete a unit of work or a specific job.

Current assets - The assets that are available, or can be made readily available to meet the cost of operations, or to pay current liabilities. Some examples are cash, temporary investments, and taxes receivable, which will be collected within about a year from the balance sheet date.

Current budget - The annual budget, prepared for and effective during, the present fiscal year; or in the case of some state governments, the budget for the present biennium.

Current funds - Funds the resources of which are expended for operating purposes during the current fiscal period. In its usual application in plural form, it refers to general, special revenue, debt service, and enterprise funds of a governmental unit. In the singular form, the current fund is synonymous with the general fund.

Current liabilities - Liabilities that are payable within a relatively short period of time, usually no longer than a year.

Current revenue - Revenues of a governmental unit, that are available to meet expenditures of the current fiscal year.

Current year - A term used in budgeting and accounting to designate the operations of the present fiscal year in contrast to past or future periods.

Decentralized management - An organizational approach in which the headquarters function maintains minimal direction and authority over operations and policies relating to a number of identifiable separate activities and operations. Decentralized management allows great freedom for decision making at the level of the separate units.

Deficit - The excess of liabilities and reserved equity of a fund over its assets. (2) The excess of expenditures over revenues during an accounting period; or, in the case of enterprise and internal service funds, the excess of expense over income during an accounting period.

Depreciation - Expiration in the service life of fixed assets, other than wasting assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy, and obsolescence. (2) The portion of the cost of a fixed asset, other than a wasting asset, which is charged as an expense during a particular period.  Note: In accounting for depreciation, the cost of a fixed asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost. Through this process, the cost of the asset less salvage value is ultimately charged off as an expense.

Designated - Assets, or equity, set aside by action of the governing board are designated; as distinguished from assets or equity set aside in conformity with requirements of donors, grantors, or creditors, which are properly referred to as restricted.

Disbursements - Payments in cash.

Discretionary - Resources that can be allocated for use as determined by the governing board or management.

Encumbrances - Contingent liabilities in the form of purchase orders, contracts, or salary commitments that are chargeable to an appropriation and for which a part of the appropriation is reserved. They cease to be encumbrances when paid or when the actual liability is recorded. In the CSU, the monthly financial statements produced by the financial accounting system use the term "open commitments" as the equivalent to encumbrances.

Endowment fund - A fund whose principal must be maintained inviolate but whose income may be expended. An endowment fund is accounted for as a trust fund.

Enterprise fund - A fund established to finance and account for the acquisition, operation, and maintenance of governmental facilities and services which are entirely or predominantly self-supporting by user charges; or where the governing body of the governmental unit has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate. Government owned utilities and hospitals are ordinarily accounted for by enterprise funds.

Equipment - Tangible property of a more or less permanent nature (other than land, buildings, or improvements other than buildings) that are useful in carrying on operations. Examples are machinery, tools, trucks, cars, furniture, and furnishings. See capital outlay for the definition of equipment related to capital outlay projects in California state government.

Executive Council (EC) - The council is composed of the President, Provost, University Planning Officer, Vice President of  Finance & Administrative Services, Vice President of External Affairs, Executive Director of the Foundation and the Vice President of Student Affairs.

Executive order (EO) - An order signed by the Director of Finance and, if necessary, the Governor, for authorizing various increases or decreases in appropriations (e.g., deficiencies or augmentations).  Executive Orders may be necessary to transfer money from one fund to another pursuant to any other statutory provisions for such transfers.

Expenditures - Where accounts are kept on a cash basis, this term is an outlay of cash or cash equivalent for goods or services or in settlement of an obligation. In an accrual or modified accrual basis, this represents the amount of an appropriation used for goods and services ordered, whether paid or unpaid.  In governmental accounting, expenditures measure the using up of appropriated resources.

Financial Accounting Standards Board (FASB) - The group in the private sector with authority to set accounting standards.

Financial audit - Audits designed to provide independent assurance of the fair presentation of financial information.

Financial Information Record Management System (FIRMS) - This system is used to transmit a variety of financial information from CSU campuses to the Chancellor’s Office.  Quarterly accounting reports, annual budget data, federal Integrated Postsecondary Education Data System data, and auxiliary accounting data are transmitted via FIRMS.

FIRMS codes - The annual expenditure budget allocation is based on allocating expenditures by functional programs, such as instruction, research, public service, academic support, student services, institutional support, operations and maintenance of plant and scholarship & fellowship.  Within each of these programs are classifications, for example within instruction is general academic instruction, special session instruction and community education.  The FIRMS codes are used to indicate the functional classifications used within the higher education environment.

Fiscal year (FY) - A 12-month accounting period during which obligations are incurred, encumbrances are made, and appropriations are expended. In California State government, the fiscal year runs from July 1 through the following June 30.

Fixed assets - Assets of a long-term character which are intended to continue to be held or used, such as land, buildings, machinery, furniture, and other equipment.  Note: The term does not indicate the immobility of an asset, which is the distinctive character of "fixture."

Foundation - Responsible for grants, gifts

Fund - A fiscal and accounting entity with a 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.  In California state government, a fund is a legal entity that provides for the segregation of monies or other resources in the state treasury for specific activities or obligations in accordance with specific restrictions or limitations. A separate set of accounts must be maintained for each fund to show its assets, liabilities, reserves, and surplus (fund balance), as well as its income and expenditures. The assets of a fund may also be placed into separate accounts to provide for limitations on specified fund income or expenditures.

Fund balance - The difference between assets and liabilities reported in a governmental fund that is available for appropriation.

Fund equity - The excess of fund assets and resources over fund liabilities. A portion of the equity of governmental fund may be reserved or designated; the remainder is referred to as fund balance.

GAAP (Generally Accepted Accounting Principles) - The conventions, rules, and procedures that serve as the norm for the fair presentation of financial statements.

GASB (Governmental Accounting Standards Board) - The ultimate authoritative accounting and financial reporting standard-setting body for state and local governments.  Established in June 1984, it is made up of seven members from various backgrounds including state and local government, public accounting, academe and user groups. 

General fund - A fund used to account for all transactions of a governmental unit, which are not accounted for in another fund. In California state government, the general fund is the predominant fund for financing state operations. The primary sources for the state general fund are the personal income tax, sales tax and bank and corporation taxes. Note: the general fund is used to account for the ordinary operations of a governmental unit that are financed from taxes and other general revenues.

General ledger (GL) - A book, file, or other device, which contains the accounts needed to reflect, in summary and in detail, the financial position and the results of financial operations of the governmental unit.  Note: In double entry bookkeeping, the debits and credits in the general ledger are equal, and therefore the debit balances equal the credit balances.

Governmental accounting - The composite activity of analyzing, recording, summarizing, reporting, and interpreting the financial transactions of governmental units and agencies. The term generally is used to refer to accounting for state and local governments, rather than the U.S. federal government.

Governor’s compact -  An agreement between Governor Schwarzenegger and the CSU 2005/06 through 2010/11.  In May 2004, the CSU and the University of California negotiated a compact for higher education to begin the fiscal recovery of the university and establish long-term funding stability to enroll students; restore academic and student services programs; provide for moderate, predictable, and affordable tuition fees; and make progress on salaries for staff and faculty at the CSU.

Internal auditor - A person within the governmental unit that is responsible for the review and appraisal of the accounting and administrative controls.

Internal service fund - A fund established to finance and account for services and commodities furnished by a designated department or agency to other departments and agencies within a single governmental unit, or to other governmental units. Amounts expended by the fund are restored thereto either from operating earnings or by transfers from other funds, so that the original fund capital is kept intact. Formerly called a working capital fund or intra-governmental service fund.

Liabilities - Debt or other legal obligations arising out of transactions in the past, which must be liquidated, renewed, or refunded at some future date.

Line item budget - A detailed expense or expenditure budget, generally classified by object within each organizational unit, and, often, classified within each object as to the authorized number of employees at each salary level within each job classification, etc.

Modified accrual basis of accounting - Basis of accounting according which (a) revenues are recognized in the accounting period in which they become available and measurable and (b) expenditures are recognized in the accounting period in which the fun fund liability is incurred.

Non-Discretionary - Resources that are reserved for specific purposes.

Operating budget - A budget that applies to all outlays, other than capital outlays.

Operating expenses & equipment (OE&E) -  (1) As used in the accounts of governmental enterprises, the term means those costs, which are necessary to the maintenance of the enterprise, the rendering of services, the sale of merchandise, the production and disposition of commodities produced, and the collection of enterprise revenues. (2) The term is also sometimes used to describe expenses for general governmental purposes.

Operating statement - A statement summarizing the financial operations of a governmental unit for an accounting period as contrasted with a balance sheet, which shows financial position at a given moment in time.

Original budget - The first complete appropriated budget.  The original budget may be adjusted by reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes before the beginning of the fiscal year.  The original budget includes actual permanent appropriation amounts automatically carried over from prior years. 

Prior Year (PY) - Refers to accounting periods that have occurred in the past year(s).

President’s Cabinet - This group discusses and recommends policy initiatives and changes, future directions and priorities for the campus and provides leadership in implementation of University’s priorities.  It also acts as the planning council and reviews planning benchmarks.  Members include the President, Vice Presidents, Provost, Deans, Associate Vice Presidents, Chair of the Academic Senate, President of Associated Student, Inc., Planning Champion and a Staff Representative.

Program - Group activities, operations or organizational units directed to attaining specific purposes or objectives.

Program budget - A budget wherein inputs of resources and outputs of services are identified by programs without regard to the number of organizational units involved in performing various aspects of the program.

Proprietary fund - Funds that focus on the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows.  These funds show actual financial position and operations, such as actual assets, liabilities, reserves, fund balances, revenues, and expenditures, as distinguished from budgetary accounts. There are two types of proprietary funds: enterprise funds and internal service funds.

PeopleSoft (PS) - A system to standardize CSU System-wide reporting among all 23 campuses and the Chancellor’s office.  It is a web-based database that supports administrative functions with a shared, common suite of applications software, enabling the CSU to perform administrative functions with a common set of administrative “best practices” approaches.

Reimbursement - Cash or other assets received as a repayment of the cost of work or services performed or of other expenditures made for or on behalf of another governmental unit or department or for an individual, firm, or corporation.

Reserve - An account that records a portion of the fund equity that must be segregated for some future use and is, therefore, not available for further appropriation or expenditure.

Resources  - Financial resources that are or will become available for spending.  These may include cash and resources ordinarily expected to be converted to cash (e.g., receivables, investments), as well as transfers from other funds, federal receipts and fund reimbursements.

Retained earnings - The accumulated earnings of an enterprise or internal service fund that have been retained in the fund and are not reserved for any specific purpose.

Revenue - The addition to cash or other current assets of governmental funds (receipts) which do not increase any liability or reserve and do not represent the recovery of an expenditure, i.e., reimbursements. Generally, revenue is derived from taxes, licenses and fees or investment earnings.

Reversion - The return of the unused portion of an appropriation to the fund from which the appropriation was made. In California state government, the undisbursed portion of an appropriation reverts two years after the last day of availability (normally June 30) for encumbrance. The budget act often provides for the reversion of unused portions of appropriations when such reversion is to be made prior to the statutory limit.

Salaries - Permanent and temporary earnings.

Salary savings - In California state government, the amount of budgeted salary savings is to reflect personnel cost savings resulting from vacancies and downward reclassification as a result of turnover of employees. The budgeted salary savings for the CSU is computed at 3.3 percent for non-faculty salaries and staff benefits, and 1.17 percent for faculty salaries and staff benefits.

Service Fees - Fees or charges required of persons who use the services.  Examples of the types of service fees are graduation and diploma fees, and miscellaneous course fees.

Special fund - Any fund that must be devoted to some special use, in accordance with specific regulations and restrictions. Generally, the term applies to all funds other than the general fund.

Special revenue fund - A fund used to account for revenues from specific taxes or other earmarked revenue sources, which by law are designated to finance particular functions or activities of government. After the fund is established, it usually continues year after year until discontinued or revised by proper legislative authority. An example is a motor fuel tax fund used to finance highway and road construction.

Staff benefits - In California state government, staff benefits represents the state (employer) costs of contributions for employees' retirement, OASDI, health and welfare benefits, worker's compensation, unemployment insurance, industrial disability leave benefits, and non-industrial disability leave benefits.

Student Tuition Fees - In addition to the system wide Tuition Fee, students must also pay certain campus mandatory fees in order to attend the university.  All campus tuition fee adjustments are governed by CSU's student tuition fee policy.

Subsidiary ledger - A group of subsidiary accounts the sum of the balances of which is equal to the balance of the related control account in the general ledger. For example, the general ledger contains a control account for "appropriations" (i.e., the approved budget) while the subsidiary ledger contains the detail of subsidiary accounts where the appropriations are allotted and allocated. For this reason, the subsidiary ledger that records the approved budget appropriations is sometimes referred to as the "allotment ledger" or the "allotment-expenditure ledger."

Traditional budget - A term sometimes applied to the budget of a governmental unit wherein appropriations are based entirely or primarily on objects of expenditure. The focus of a traditional budget is on input of resources, rather than the relationship between input of resources and output of services.

Transfers In – Trust Fund - Transfers in from another fund to augment available revenue.

Trial Balance - A worksheet showing the balances in each fund; used to prove the equality of debits and credits.

Trust fund - A fund consisting of resources received and held by the governmental unit as trustee, to be expended or invested in accordance with the conditions of the trust.

University Budget Committee (UBC) -  This committee establishes an inclusive process for budget development, and recommends budget allocations concerning the entire University budget based on divisional and campus-wide budget proposals.  It also has the ability to set aside specific funds to achieve performance indicators and prioritizes proposals across divisions aimed at achieving desired performances.  They study best practices in higher education budgeting and recommends budget development processes to the President.

Use of Funds – Interest  -  Interest received on investments that is available to support operations.