Glossary of Budget Terminology
CAPITAL RESERVE FUNDS : Funds to set aside for future major expenditures such as land , equipment , or small construction projects . Capital reserves may also be used to defray major capital expenditures or match grant money from the federal or state governments for capital projects .
CONTINGENCY : Funds set aside in an operating budget to handle unanticipated expenditures over the course of the fiscal year ; expenditures from this reserve require specific authorization by the Town Council .
COST OF LIVING ADJUSTMENT : A fixed adjustment to each range / step of the classification and pay plan for the Town , usually tied to an increase in the cost of living .
DEBT LIMIT : The maximum amount of outstanding gross or net debt permitted by law .
DEBT SERVICE : Funds required to make principal and interest payments on outstanding long-term debt and to accumulate monies for future retirement of term bonds .
DECISION PACKAGES : Proposals by departments for new programs or projects which were not part of the prior year ’ s budget . Funding is subject to review by the Budget Team and approval by the Town Council .
EXPENDITURE : Depletion of financial resources to pay for the Town ’ s personnel services , professional services , operations and maintenance , capital outlay , or debt service .
FISCAL YEAR : A 12-month period to which the annual operating budget applies and at the end of which a government determines its financial position and the results of its operation ; for North Carolina local governments , this period is July 1-June 30 .
FIXED ASSETS : Long-lived tangible assets obtained or controlled as a result of past transactions , including buildings , equipment , improvements other than buildings , and land .
FTE ( FULL-TIME EQUIVALENT ): A unit that indicates the workload of a employed person in a way that makes workloads comparable across various contexts .
FULL-TIME EMPLOYEE : A Town employee hired to work forty ( 40 ) hours per week on a continuing basis and is eligible to participate in the Town ’ s benefits programs .
FUND : A set of financial accounts whose resources are equivalent to its liabilities plus equity . These sets of accounts are independent in order to achieve greater accountability or to help attain different goals . The Town uses the General Fund , which accounts for most governmental activities .
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