Transactions processed to record receipts and expend funds are performed based on assigned account numbers.  Functioning under Generally Accepted Accounting Principles (GAAP) on the basis of fund accounting, account numbers are established as follows:

 

ACCOUNT NUMBER - FUND/DEPARTMENT/FUNCTION/OBJECT

XX   -             XXX    .                     XXXXX

FUND     DEPT        FUNCTION    OBJECT

A Fund is an accounting and budgeting entity established to finance a specific purpose and maintain financial records of transactions for this purpose.

A Department is an organizational or budgetary break down within a fund. Each department serves a specific function as a distinct organizational unit of government.

A Function is a sub-division of a department.

An Object of Expenditure is a detailed expenditure classification which relates to a specific type of item purchased or service obtained.

The following are definitions of some of the more common terms that may be encountered in reviewing this document.

Accrual Basis - A basis of accounting in which transactions are recognized at the time they are incurred, as opposed to when cash is received or spent.

Ad Valorem Taxes - Commonly referred to as property taxes, are levied on both real and personal property according to the property's valuation and the tax rate.

Appropriation - A legal authorization granted by the Legislative body (City Council) to make expenditures and incur obligations for specific purposes. Appropriations Ordinance - The formal budgetary document enacted by the legislative body which contains all approved appropriations for the fiscal year.

Attrition - A method of achieving a reduction in personnel by not refilling the positions vacated through resignation, reassignment, transfer, retirement, or means other than layoffs.

Authorized Personnel (positions) - The total number of personnel (positions) authorized to be employed in a particular department/function at any given time during the fiscal year. Available Fund Balance - Financial resources carried forward at the end of a fiscal year which have not been reserved or designated for a specific purpose such as working capital.   These resources are considered "available" to finance future budgets.

Bond - A long-term I.O.U. or promise to pay.  It is a promise to repay a specified amount of money (the face amount of the bond) on a particular date (the maturity date).  Bonds are primarily used to finance capital projects.

General Obligation (G.O.) Bond - This type of bond is backed by the full faith, credit, and taxing power of the government requires approval by referendum, in Georgia, the debt ceiling is ten percent of the assessed value of all taxable property.  The cost of financing is spread over the life of the improvement so that future users help to repay the cost.

Revenue Bond - This type of bond is backed only by the revenues from a specific enterprise or project, such as a hospital or toll road.

Budget - A proposed plan for raising and spending money for specified programs, functions, and activities during a fiscal year.

Budget Adjustment - A legal procedure utilized by City staff to revise a budget appropriation.  City staff has the prerogative to adjust expenditures within or between departmental budgets according to budget policy, but no increase in the total budget can occur without approval of the City Council.

Budget Calendar - The schedule of key dates which a government follows in the preparation and adoption of the budget.

Budgetary Basis - This refers to the basis of budgeting used to estimate financing sources and uses in the budget.  This generally takes one of three forms:  GAAP, cash, or modified accrual.

Capital Fund - A fund used to account for financial resources used for the acquisition or construction of major capital facilities.

Capital Improvement Program (CIP) Budget - The first year of the CIP as approved by the City Council.   The Capital Budget should be based on a set of long term capital improvement programs.  When the capital budget is reviewed each year, the programs are forwarded one year.

Capital Outlay (Assets)  - Expenditure which result in the acquisition of or addition to fixed assets, including short-lived machinery and equipment.

Capital Projects - Projects which involves the acquisition of major machinery, equipment, land, buildings, renovations, and/or construction with a cost of more than $20,000.

Contingency - A budgetary reserve set aside for emergencies or unforeseen expenditures not otherwise budgeted for.  The Mayor and City Council have separate contingencies which may be used at their discretion.

Cost-of-living Adjustment (COLA) - An increase in salaries to offset the adverse effect of inflation on compensation.

Debt Service Fund - A fund used to account for the accumulation of resources for, and payment of, general long-term debt principal and interest.

Debt Service - Interest and principal payments associated with Bond Issues.

Deficit - The excess of an entity's liabilities over its assets or the excess of expenditures or expenses over revenues during a single accounting period.

Depreciation - Expiration in the service life of capital assets attributable to wear and tear, deterioration, action of the physical elements, inadequacy or obsolescence.

Encumbrance - The commitment of appropriated funds to purchase an item or service.  To encumber funds means to set aside or commit funds for a future expenditure.

Enterprise Fund - A governmental accounting fund in which the services provided are financed and operated similarly to those of a private business.  The rate schedules for these services are established to insure that revenues are adequate to meet all necessary expenditures.

Expenditures - The payment for goods and services; expenses incurred for specific items, or services.

Fees - Charges for services rendered by City Departments.

Fiscal Year - A 12 month period for which a budget is proposed at the end of which a government determines its financial position and the results of its operations. The City of Macon operates on a July 1st through June 30th fiscal year.

Full-time Equivalent Position (FTE) - A part-time position converted to the decimal equivalent of a full-time position based on 2,080 hours per year.  For example, a part-time typist working for 20 hours per week would be the equivalent to .5 of a full-time position.

Fund Balance - The amount by which assets exceed liabilities in a governmental fund.

Funded Agencies - Nonprofit agencies who provide community services which supplement and support City programs and for which City dollars are made available.