New Year Dictionary of Governmental Budget and Accounting Terms

Has your EOY caused your prior-year encumbrances and expenditures to deplete your reserves, or were you in the black because those expenditures were WRTFY?

If all this budget and accounting talk has your head spinning, we’re going to lighten it up with some Happy New Year Vocabulary, courtesy of the United States Senate Committee on Appropriations.

So if you don’t know your program budget from your appropriations, give them a quick once-over with a New Year Review of Governmental Budget and Accounting Terms.


H – Hourly (or Non-Exempt)
An employee who fills a temporary or short-term position. Such employees provide contingency staffing for government operations during peak workloads or address temporary staffing needs. Hourly employees are paid on a per-hour basis, and receive limited benefits.

A – Allocation
A distribution of funds or costs from one account or appropriation to one or more accounts or appropriations (e.g., the allocation of employee compensation funding from the statewide 9800 Budget Act items to departmental appropriation items).

P – Program Budget
A budget that allocates money to the functions or activities of a government, rather than to specific items of cost, or to specific departments.

P – Prior-Year Encumbrances
Obligations from previous fiscal years in the form of purchase orders, contracts, or salary commitments which are chargeable to an appropriation, and for which a part of the appropriation is reserved. They cease to be encumbrances when the obligations are paid or otherwise terminated.

Y – YOA (Year of Appropriation)
Refers to the first fiscal year of enactment or availability, whichever is later. Also referred to as Enactment Year, or ENY.

N – Nongovernmental Cost Funds
For legal basis purposes, nongovernmental cost funds are used to budget and account for revenues other than general and special taxes, licenses, and fees, or certain other state revenues. Generally, expenditures of these funds do not represent a cost of government.

E – Expenditure
Expenditures reported on a department’s year-end financial reports and “past year” budget documents consist of amounts paid and accruals (including outstanding encumbrances and payables) for obligations created for the last fiscal year. “Current year” and “budget year” expenditures in budget documents are estimates for the respective fiscal year.

W – WRTFY (Without Regard To Fiscal Year)
Where an appropriation has no period of limitation on its availability.

Y – YOB (Year of Budget)
The fiscal year that revenues and expenditures are recognized. For revenues, this is generally the fiscal year when revenues are earned, measurable, and “available.” For expenditures, this is generally the fiscal year when obligations, including encumbrances, have been created during the availability period of the appropriation.

E – Encumbrance
The commitment of all or part of an appropriation. Encumbrances represent valid obligations related to unfilled purchase orders or unfulfilled contracts. Outstanding encumbrances are recognized as budgetary expenditures in the individual department’s budget documents and their individual annual financial reports.

A – Appropriation
Authorization for a specific agency to make expenditures or create obligations from a specific fund for a specific purpose. It is usually limited in amount and period of time during which the expenditure is to be recognized. For example, appropriations made by the Budget Act are available for encumbrance for one year, unless otherwise specified. Appropriations made by other legislation are available for encumbrance for three years, unless otherwise specified, and appropriations stating “without regard to fiscal year” shall be available from year to year until fully expended.

R – Reserve
An amount of a fund balance set aside to provide for expenditures from the unencumbered balance for continuing appropriations, economic uncertainties, future apportionment, pending salary, or price increase appropriations, and appropriations for capital outlay projects.

Happy New Year government accountants, clerks, and budgeters! Lets plan to reconnect at the EOFY 2019!

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