Editorial note: These concepts are presented in the context of the United States. Some terms do not have an exact Brazilian equivalent; where that matters, the English term is preserved.
Appropriation
An appropriation is legal authority granted by a governing body to spend public money for a stated purpose and period. It is an authorization to spend, not proof that the money has already been spent.
Why it matters: It helps readers distinguish permission to spend from an actual payment.
Jurisdiction note: The legal form, level of detail, and expiration rules vary by state and local charter.
Assessed Value
Assessed value is the value assigned to property for applying a property-tax levy or rate. It may differ from market value because state law can use assessment ratios, classifications, exemptions, or other adjustments.
Why it matters: It is one of the inputs used to understand a property-tax bill.
Jurisdiction note: Assessment systems and ratios are set by state and local law; do not assume assessed value equals market value.
Audit
An audit is an independent, objective examination performed for a defined purpose, scope, and set of criteria. Government audits may address financial statements, compliance, operations, or program performance.
Why it matters: The audit type and scope determine what conclusions a report can support.
Jurisdiction note: Requirements and terminology differ across federal, state, local, and specialized audit settings.
Annual Financial Report
An annual financial report presents a government’s financial activity and position for a completed reporting period. It answers what was reported after the period ended, not simply what a budget authorized beforehand.
Why it matters: It prevents readers from treating a plan and a report of results as the same document.
Jurisdiction note: The format, name, filing deadline, and required sections vary by government and applicable standards.
Annual Comprehensive Financial Report (ACFR)
An Annual Comprehensive Financial Report, or ACFR, is a government’s comprehensive annual financial reporting package, typically including introductory information, management’s discussion and analysis, basic financial statements, and other required or supplementary information under the applicable reporting framework. The name ACFR replaced Comprehensive Annual Financial Report in GASB terminology; governments do not all publish identical packages or face identical requirements.
Why it matters: The acronym ACFR helps readers find the government’s broader annual financial reporting package.
Jurisdiction note: The contents, format, and applicable reporting requirements depend on the government and framework; there is no single uniform legal package for every government.
Balanced Budget
A budgetary or legal balance means that a proposed or adopted budget meets the balance rule that applies to the government. A structurally balanced budget is a stronger planning concept: recurring revenues support recurring expenditures over time, without relying on one-time fixes.
Why it matters: A budget can satisfy a legal balance rule and still depend on temporary resources.
Jurisdiction note: The legal definition, budget basis, and meaning of structural balance differ across jurisdictions.
Bond
A bond is a debt instrument through which an issuer borrows money from investors and promises repayment under stated terms. The terms normally describe principal, interest, maturity, security, and permitted use of proceeds.
Why it matters: A bond creates a long-term obligation that future budgets must recognize.
Jurisdiction note: Authorization, tax treatment, disclosure, and repayment rules depend on state law and the bond documents.
Budget Amendment
A budget amendment is a formal change to an adopted budget. It may change an appropriation, revenue estimate, spending purpose, fund balance use, or another authorized budget element.
Why it matters: Amendments show that the adopted plan changed and should be read with its approval record.
Jurisdiction note: Some amendments require legislative action or public notice; others may be allowed administratively.
Budget Adoption
Budget adoption is the formal approval of a government’s budget by the body authorized to approve it. Adoption turns a proposed plan into the budget that governs spending and financing for the period, subject to local rules.
Why it matters: The adopted budget is the authoritative starting point for comparing plan and execution.
Jurisdiction note: The approving body, hearing requirements, timing, and legal effect vary by jurisdiction.
Budget Hearing
A budget hearing is a public meeting or proceeding in which residents may receive information about a proposed budget and, where allowed, provide comments before or during adoption.
Why it matters: It is one point at which the public can examine proposed priorities before they become final.
Jurisdiction note: Notice, timing, participation rights, and whether a hearing is required depend on local and state law.
Capital Budget
A capital budget is the part of a budget that plans and authorizes major long-lived assets, facilities, infrastructure, or projects. It is often connected to a multi-year capital improvement plan.
Why it matters: Capital decisions create both upfront costs and future operating responsibilities.
Jurisdiction note: Thresholds for capital items and the separation between operating and capital budgets vary locally.
Capital Improvement Plan (CIP)
A Capital Improvement Plan is a multi-year plan for identifying, prioritizing, scheduling, and financing major public capital projects. It can connect project needs to the capital budget and long-term financial planning.
Why it matters: A CIP shows how a project fits into a sequence of needs rather than presenting it as an isolated purchase.
Jurisdiction note: Names, time horizons, approval status, and required detail differ by government.
Capital Expenditure
A capital expenditure is spending to acquire, construct, improve, or extend the useful life of a long-lived asset. A capital purchase is not automatically the same as a complete capital project or a particular funding source.
Why it matters: It helps readers separate investment in assets from routine operating costs.
Jurisdiction note: Capitalization thresholds and classifications are set by the government’s accounting and budget policies.
Debt
Debt is an obligation to repay borrowed money or another financing commitment under stated terms. Government debt can support capital projects, but it also creates future principal, interest, disclosure, and compliance responsibilities.
Why it matters: Debt changes future budget capacity even when the borrowed money arrives today.
Jurisdiction note: Legal limits, permitted uses, and repayment structures differ among governments and debt instruments.
Debt Service
Debt service is the scheduled payment of principal and interest on debt. A government may also need to budget related fees, reserves, or coverage requirements depending on the financing documents.
Why it matters: Debt service is a recurring claim on future resources.
Jurisdiction note: Payment schedules, coverage tests, and accounting treatment depend on the instrument and its documents.
Encumbrance
An encumbrance is a commitment, such as a purchase order or contract, that reserves part of an appropriation for a future obligation. It is not necessarily a cash payment or a final expenditure.
Why it matters: Encumbrances can explain why an appropriation is not freely available even before payment.
Jurisdiction note: Whether and when encumbrances are recognized differs between budgetary systems and GAAP financial reporting.
Enterprise Fund
An enterprise fund is a proprietary fund used for a government activity that provides goods or services, often charging users and operating in a business-like way. It focuses on economic resources, revenues, expenses, and cash flows.
Why it matters: The fund type signals that readers should examine costs, rates, and financial position differently from a general governmental activity.
Jurisdiction note: The decision to use an enterprise fund depends on the government’s facts, policies, and applicable standards.
Expenditure
An expenditure is an outflow or use of financial resources for a government purpose, such as paying for services, supplies, benefits, or capital items. In governmental funds, the term is used differently from expense in proprietary accounting.
Why it matters: The word helps readers identify which accounting model a report is using.
Jurisdiction note: Recognition timing and classification depend on the fund type and accounting or budget basis.
Fiscal Year
A fiscal year is the twelve-month period a government uses for budgeting, accounting, and reporting. It does not have to match the calendar year.
Why it matters: Comparing documents from different fiscal years can otherwise create misleading conclusions.
Jurisdiction note: Start and end dates are set by law, policy, or the government’s governing documents.
Fund
A fund is a fiscal and accounting entity with a self-balancing set of accounts used to track resources, obligations, and activity for a particular purpose or legal requirement. It is not automatically a separate bank account.
Why it matters: Fund structure helps readers see restrictions, responsibilities, and reporting boundaries.
Jurisdiction note: Fund names and required types vary, and one government’s fund structure should not be assumed universal.
Fund Balance
Fund balance is the reported difference between assets and liabilities of a governmental fund, presented under applicable financial-reporting or budgetary rules. It describes a fund’s reported resources after liabilities; it is not the same thing as cash available to spend.
Why it matters: The classification and availability of fund balance matter more than the headline number alone.
Jurisdiction note: GAAP fund balance and budgetary fund balance may differ because recognition and timing rules differ; neither headline balance alone proves spendable cash.
General Fund
The general fund is the primary governmental fund used to account for and report many general government activities and resources that are not required to be reported in another fund. It is not necessarily the place where every unrestricted dollar sits.
Why it matters: The general fund is often central to operating-budget discussions, but its balance is not automatically spendable.
Jurisdiction note: The legal role and contents of a general fund depend on the government and applicable standards.
General Obligation Bond
A general obligation bond is a municipal debt obligation typically supported by the issuer’s pledge of full faith, credit, and taxing power, subject to the pledge and legal terms of the issue. The precise source and priority of payment can vary under state or local law.
Why it matters: The security pledge helps readers understand which resources may support repayment.
Jurisdiction note: Pledge language, voter approval, tax limits, and legal treatment vary by jurisdiction.
Governmental Fund
A governmental fund is a fund type used to account for the government’s general governmental activities and resources, with a focus on current financial resources and expenditures. General, special revenue, debt service, and capital projects funds are common governmental fund types.
Why it matters: It signals that readers should look for fund balance and expenditures rather than proprietary-style net income.
Jurisdiction note: Fund classification follows applicable standards and the government’s activities, not just the fund’s name.
Grant
A grant is funding provided by one government or organization to another government or recipient for an approved purpose, often subject to conditions, reporting, or matching requirements. A grant is not automatically unrestricted revenue.
Why it matters: The grant agreement may determine what the recipient can spend and what it must report.
Jurisdiction note: Eligibility, allowable costs, matching rules, and clawback provisions vary by program and grantor.
Intergovernmental Revenue
Intergovernmental revenue is financial assistance or shared revenue received from another government, including grants, shared taxes, reimbursements, and certain payments in lieu of taxes. It is distinct from a sale of goods or services to another government.
Why it matters: The source of money can be as important as the amount when restrictions and accountability are analyzed.
Jurisdiction note: Classification and eligible uses depend on the transaction and applicable reporting system.
Internal Control
Internal control is the set of ongoing processes used by management to provide reasonable assurance about effective operations, reliable reporting, compliance, and safeguarding of resources. It is not a guarantee that every error or fraud will be prevented.
Why it matters: Controls explain how an organization reduces risk in everyday decisions and transactions.
Jurisdiction note: Frameworks and requirements differ; GAO’s Green Book is a federal framework that may also inform nonfederal organizations.
Levy
A levy is the legal act of imposing a tax or the total amount of tax authorized by a government, depending on context. In property taxation, a levy is often discussed alongside the assessed tax base and rate.
Why it matters: Levy explains the government’s authority or target amount, not necessarily the final bill for one property.
Jurisdiction note: The term can mean an action, an authorized amount, or a rate depending on the state and document.
Millage Rate
A millage rate is a property-tax rate expressed in mills. One mill commonly represents one dollar of tax for each one thousand dollars of taxable value, although the exact presentation and calculation are set by state and local rules.
Why it matters: Millage is a common U.S. term that appears on property-tax documents but has no single Brazilian equivalent.
Jurisdiction note: Assessment ratios, exemptions, and the presentation of one mill vary across jurisdictions.
Operating Budget
An operating budget plans recurring revenues and expenditures for the government’s day-to-day services and operations during a fiscal period. It may also include transfers, reserves, or other financing elements under local practice.
Why it matters: It is the main document for seeing how recurring services are expected to be financed.
Jurisdiction note: The boundary between operating and capital spending is defined by local policy and accounting rules.
Operating Revenue
Operating revenue is revenue generated from a government’s ongoing activities, such as charges for services, sales, or other recurring sources associated with an operation. The label and recognition can vary by reporting framework and fund type; it should not automatically be treated as tax revenue or as unrestricted.
Why it matters: Recurring operating revenue supports services but may have cost, legal, or use restrictions.
Jurisdiction note: Classification depends on the activity, fund type, and reporting framework.
Performance Audit
A performance audit evaluates a program, activity, or function against stated criteria and develops evidence-based conclusions about performance, economy, efficiency, or effectiveness. It is different from an audit limited to financial statement opinions.
Why it matters: It helps readers understand that an audit report may ask whether a program worked, not only whether numbers were recorded.
Jurisdiction note: Objectives, criteria, scope, and reporting language must be read in the individual audit.
Property Tax
Property tax is a tax imposed on property under the authority of applicable state and local law. In many U.S. systems, the bill reflects taxable value, rates or levies, exemptions, and the taxing bodies that share the bill.
Why it matters: A property-tax bill may combine decisions from more than one government.
Jurisdiction note: Assessment, exemptions, payment dates, and rate formulas vary widely by state and locality.
Revenue
Revenue is money received by a government from external sources, excluding items such as debt issuance, liquidation of investments, and certain agency transactions. Revenue is not the same as cash on hand or borrowing.
Why it matters: It is the starting point for asking where funding came from and what conditions attach to it.
Jurisdiction note: Classification and recognition depend on the government’s reporting system and transaction type.
Revenue Bond
A revenue bond is a municipal debt obligation payable from a specified source of revenue, such as charges from a utility or facility, under the bond’s legal pledge. The issuer’s general taxing power is not automatically pledged; the official bond documents control.
Why it matters: The repayment source affects risk, rates, and which users or activities may bear the cost.
Jurisdiction note: A government’s legal pledge may include reserves, additional bonds tests, or other support; read the documents.
Restricted Revenue
Restricted revenue is revenue whose use is limited by an external party, law, contract, grant, voter action, or another enforceable requirement. The limitation applies to how the revenue may be used; it does not by itself identify a particular fund type.
Why it matters: A restricted receipt may not be available for a new priority even when it increases total revenue.
Jurisdiction note: The source and legal terms determine whether a restriction is external, formal, temporary, or permanent.
Special Revenue Fund
A special revenue fund is a governmental fund used in circumstances where specific restricted or committed revenue sources support specified purposes, subject to applicable standards. Here, “committed” refers to a technical fund-balance classification created by formal action of the government’s highest-level decision-making authority; it is not the same as externally restricted revenue.
Why it matters: The distinction prevents readers from inferring a fund type from a restriction alone.
Jurisdiction note: The criteria and classification must be checked against the government’s financial report and applicable standards.
Tax Base
A tax base is the value, income, transaction, or other measure to which a tax rate is applied. For property tax, it is commonly tied to taxable assessed value, but special taxes may use another measure.
Why it matters: Changes in the base can change revenue even when the rate does not change.
Jurisdiction note: The base, exclusions, assessment method, and timing are defined by the tax law.
Tax Rate
A tax rate is the rate applied to a tax base to calculate a tax amount. In property taxation, the displayed rate may interact with assessment ratios, exemptions, caps, or multiple taxing authorities.
Why it matters: The rate alone may not explain why two properties or jurisdictions have different bills.
Jurisdiction note: Units, formulas, and statutory limits vary by tax and jurisdiction.
Transparency
Transparency is the practical availability of understandable, timely, and relevant information about public decisions, resources, and results. Posting a document is not enough if the document is inaccessible, incomplete, or impossible to interpret.
Why it matters: Transparency connects publication to the public’s ability to ask informed questions.
Jurisdiction note: Disclosure duties, records rules, and budget publication formats vary by jurisdiction.
Unrestricted Revenue
Unrestricted revenue is revenue without an external restriction that limits it to a particular purpose. It may still be subject to legal, policy, budgetary, timing, or existing-obligation constraints, so “unrestricted” does not mean immediately spendable.
Why it matters: Availability depends on obligations, appropriations, timing, and policy—not only on the absence of a restriction.
Jurisdiction note: The classification and practical availability must be checked in the relevant budget and financial report.
User Fee
A user fee is a charge paid by a person or organization for a government service or facility, often designed to recover some or all of the cost. It is not automatically a tax, and the legal distinction depends on the jurisdiction.
Why it matters: Fee policy affects who pays, how much is recovered, and whether a service is subsidized.
Jurisdiction note: Authority, cost-recovery limits, exemptions, and naming conventions vary by state and local law.
Sources
- boston.gov
- gfoa.org
- gfoa.org
- comptroller.tn.gov
- census.gov
- gao.gov
- storage.gasb.org
- storage.gasb.org
- gao.gov
- budget.digital.mass.gov
- seminolecountyfl.gov
- gfoa.org
- sao.wa.gov
- dbm.maryland.gov
- idahofallsidaho.gov
- gfoa.org
- gfoa.org
- census.gov
- rolesvillenc.gov
- ebudget.ca.gov
- gasb.org
- gfoa.org
- msrb.org
- sec.gov
- gao.gov
- flsenate.gov
- budget.digital.mass.gov
- budget.digital.mass.gov