Page 82 - CityofForestHillFY25AdoptedBudget

Glossary

The City of Forest Hill Adopted Budget contains specialized and technical terminology that is unique to public finance
and budgeting. To help both City departments and the general citizenry understand the terminology used during the
budget process, this glossary is included in the adopted and published budget document as a reference.

Accrual Accounting: A basis of accounting in which revenues are recognized in the period in which they are earned
and become measurable, and expenses are recognized in the period incurred instead of when cash is actually
received or spent. For example, in accrual accounting, revenue that was earned between June 1 and September 30,
but for which payment was not received until October 1 through November 30, is recorded as being received on
September 30 rather than October 1 through November 30.

Appropriation: A legal authorization made by the City Council that permits the City to make expenditures and to
incur obligations for specific purposes. An appropriation is usually limited in amount and the time in which it may be
expended.

Appropriation Ordinance: The official enactment by the City Council to establish legal authority for City officials to
obligate and expend resources.

Assessed Valuation: A value that is established for real or personal property for use as a basis for levying property
taxes.

Audit: A comprehensive examination of how an organization’s resources were actually utilized, concluding in a
written report of the findings. A financial audit is a review of the accounting system and financial information to
determine how government funds were spent and whether expenditures were in compliance with the legislative
body's appropriations. A performance audit consists of a review of how well the organization met its stated goals.

Balanced Budget: A budget in which planned expenditures can be met by current income from taxation and other
central government receipts.

Balance Sheet: A financial statement that discloses the assets, liabilities, and equity of a specific governmental fund
as of a specific date.

Bond: An interest-bearing certificate of debt; a written contract by an issuer to pay to the lender a fixed principal
amount on a stated future date and a series of interest payments on the principal amount until it is paid.

Budget: A financial plan for a specified period of time (i.e. a fiscal year) that includes all planned expenditures for
various municipal services and the proposed means of financing them.

Budget Adjustment: A legal procedure utilized during the fiscal year by the City staff and City Council to revise a
budget appropriation. The City of Forest Hill's City Charter requires City Council approval through the adoption of a

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