Page 119 - Forest Hill FY22 Annual Budget

Fore,Hill

C

I Glossary (Continued)

Cash Basis Accounting: A basis of accounting in which transactions are recorded when cash is either
received or expended for goods and services

Cash Management: The management of the cash that is necessary to pay for government services while
investing temporary cash excesses in order to earn interest revenue. Cash management refers to the
activities of forecasting the inflows and outflows of cash, mobilizing cash to improve its
availability for investment, establishing and maintaining banking relationships, and investing funds in order
to achieve the highest interest and return available for temporary cash balances.

Character: A basis for distinguishing types of expenditures; the five major characters used by the City of
Forest Hill are: personnel services, supplies, contractual services, capital outlays, and debt service.
• The Personnel Services category includes all salary, benefit and supplement costs associated with
employees compensations.
• The Supplies category includes expenditures for items costing less than $5,000 per unit, or for items
costing more than $5,000 with a useful life of less than two years. Examples of supplies include basic office
supplies, books and magazines; materials used in city operations including paving material, streetlights, and
signals; postage, uniforms, and vehicle related costs including parts, supplies and fuel. In addition, minor
equipment is budgeted as a supply cost. Minor equipment is distinguished from capital outlays by the
$5,000 cost per unit threshold and includes items like minor audio/video equipment, water meters, scanners,
fax machines, and minor appliances.
• Expenditures in the Contractual category represent activities performed under expressed or
implied agreements involving the use of equipment or commodities; and for professional, specialized
or trade services rendered. Contractual services also include payment of utilities for electricity, gas, water,
wastewater, and storm water. Finally, transfers among Funds are captured as contractual costs. These
include transfers for insurance, healthcare, and administrative services.
• The Capital Outlays category reflect all outlays that result in the acquisition of, or additions to, the
City's fixed assets (assets of a long-term nature which are intended to be held or used beyond the current
fiscal year and which may be eligible for depreciation), including real and tangible assets. Capital Outlays
must cost at least $5,000 and must have an expected life of two or more years. Primarily four types of fixed
assets (Capital Outlays) are used: 1) Land; 2) Improvements other than buildings; 3) Buildings; and 4)
Equipment.
• The Debt Service category includes money paid on loans and bonds by the City, as a borrower, of the
principal and interest.

Commitment: The pledge of appropriated funds to purchase an item or service. Funds are committed when
a requisition is issued through the Finance Department of the City.

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