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Definitions of Government Accounting Terms

Expenditures: outflows of resources which the government spends to perform its functions -- the dollars actually spent on those functions. Major government expenditures include items such as wages and salaries, equipment maintenance, etc.

Fiscal Year: a 12-month period used by a government for accounting purposes. The fiscal year may not be the same as the calendar year. Most governments use the July 1 - June 30 fiscal year.

Fund Balance: the jurisdiction’s total financial resources or reserves at a given point in time, including accumulated surpluses or shortfalls from previous years.

General Fund: provides for most of a jurisdiction’s primary operations -- general government administration, services, supporting services, operation of facilities, etc. The general fund normally includes all financial resources not required to be accounted for separately. Usually public employees are paid out of the general fund.

Interfund Transfers: transfers from one fund within a government entity to another fund within that same government entity. For example, it is common for transfers to be made out of the general fund into special revenue funds or capital projects funds. Such transfers would deplete the general fund balance, while contributing to the other funds’ balances.

Revenues: inflows of resources which the government can use to perform its functions, i.e., the dollars available for those functions. Major government revenues include taxes and user fees.

Shortfall: the excess of expenditures over revenues in a given time period (usually a fiscal year). Shortfalls generally require the difference to be made up from the fund balance, thus decreasing that balance.

Surplus: the excess of revenues over expenditures in a given time period (usually a fiscal year). A surplus for a year should increase the fund balance at the end of that year.

Unreserved Fund Balance: a subset of the fund balance. Unreserved funds are those available to the government essentially to use as it sees fit. Unreserved funds may be designated or earmarked for specific purposes, but are not legally committed to those purposes. (In contrast, reserved funds -- such as those held in trust -- are legally committed.)

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