Glossary of Terms
GLOSSARY OF TERMS
This Glossary contains definitions of terms used on this web site and such additional terms as seem necessary to common understandings concerning financial accounting procedures for schools. Several terms which are not primarily financial accounting terms have been included because of their significance for school financial accounting.
ACCOUNTING SYSTEM – The total structure of records and procedures which discover, record, classify and report information on the financial position and operations of a school district or any of its funds, balanced account groups and organizational components.
ACCRUAL BASIS – The basis of accounting under which revenues are recorded when levies are made, and expenditures are recorded as soon as they result in liabilities regardless of when the revenue is actually received or the payment is actually made. Also see ESTIMATED REVENUE and EXPENDITURES.
ACCRUE – To record revenues when earned or when levies are made, and to record expenditures as soon as they result in liabilities, regardless of when the revenue is actually received or the payment is actually made. Sometimes the term is used in a restricted sense to denote the recording of revenues earned but not yet due, such as accrued interest on investments and the recording of expenditures which result in liabilities that are payable in another accounting period, such as accrued interest on bonds. Also see ACCRUAL BASIS.
APPROPRIATION – An authorization granted by a legislative body to make expenditures and to incur obligations for specific purposes. Note: An appropriation is usually limited in amount and as to the time when it may be expended.
AUTHORITY, SCHOOL – Appointed body created by State Law and vested with the responsibility of securing capital finances for school boards to build new buildings or additions.
BOARD OF SCHOOL DIRECTORS – The elected or appointed body which has been created according to State law and vested with responsibilities for educational activities in a given geographical area.
BUDGET – A plan of financial operation embodying an estimate of proposed expenditures for a given period or purpose and the proposed means of financing them.
CAPITAL RESERVE – Funds appropriated for building maintenance and capital projects. A plan as set forth for each project or maintenance item so that appropriate funds may be designated.
CHARTER SCHOOLS – Public Schools that are governed independently by their own board of directors and are granted more latitude in their operations than regular public schools.
CONTRACTED SERVICES – Labor, material and other costs for services rendered by personnel who are not on the payroll of the local education agency. These are classified as either Professional or Property service Objects.
COST PER PUPIL – See CURRENT EXPENDITURES PER PUPIL
CURRENT EXPENDITURES PER PUPIL – Current expenditures for a given period of time divided by a pupil unit of measure (average daily membership, average daily attendance, etc.)
DEBT – An obligation resulting from the borrowing of money or from the purchase of goods and services. Debts of local education agencies include bonds, warrants and notes, etc.
DEBT SERVICE – Expenditures for the retirement of debt and expenditures for interest on debt, except principal and interest on current loans.
EQUIPMENT – Those movable items used for school operation that are of a non-expendable and mechanical nature, i.e., perform an operation. Typewriters, projectors, vacuum cleaners, accounting machines, computers, lathes, clocks, machinery, and vehicles, etc. are classified as equipment. (Heating and air conditioning systems, lighting fixtures and similar items permanently fixed to or within a building are considered as part of the building.)
ESTIMATED REVENUE – When the accounts are kept on an accrual basis, this term designates the amount of revenue estimated to accrue during a given period regardless of whether or not it is all to be collected during the period.
EXPENDITURES – This includes total charges incurred, whether paid or unpaid, for current expenses, capital outlay, and debt service. (Transfers between funds, encumbrances, exchanges of cash for other current assets such as the purchase of stores and investment of cash in U.S. Bond, payments of cash in settlement of liabilities already accounted as expenditures, and the repayment of the principal of current loans are not considered as expenditures.)
FISCAL YEAR – A twelve-month period of time to which the annual budget applies and at the end of which a local education agency determines its financial position and the results of its operation. (The SCASD fiscal year begins July 1 and ends June 31)
FUND – A sum of money or other resources set aside for specific activities of a school district. The fund accounts constitute a complete entity and all of the financial transactions for the particular fund are recorded in them.
FUND BALANCE – The excess of assets of a fund over its liabilities and reserves. During the fiscal year prior to closing, it represents the excess of the fund’s assets and estimated revenues for the period over its liabilities, reserves and appropriations for the period.
FUND, GENERAL – The fund used to finance the ordinary operations of the local education agency. It is available for a legally authorized purpose and consists of money not specifically designated for some other particular purpose.
FUND, SPECIAL REVENUE – The fund used to finance special operations of the school district. These operations are legally restricted to expenditures for the special purposes.
INSTRUCTION – The activities dealing directly with the teaching of students or improving the quality of teaching.
LEVY – (Verb) To impose taxes or special assessments. (Noun) The total of taxes or special assessments imposed by a government unit.
LOCAL EDUCATION AGENCY (LEA) – Public school system located within district boundaries.
SCHOOL – A division of the school system consisting of a group of pupils composed of one or more teachers to give instruction of a defined type, and housed in a school plant of one or more buildings. More than one school may be housed in one school plant, as is the case when the elementary and secondary programs are housed in the same school plant.
SCHOOL, ELEMENTARY – A school classified as elementary by State and local practice and composed of any span of grades not above grade six. In this handbook this term includes kindergartens and nursery schools if they are under the control of the local board of education. State College’s grade structure currently includes students in grades K through 5.
SCHOOL, MIDDLE – A school offering the transition years between elementary and high school grades. State College’s grade structure currently includes students in grades 6, 7 and 8.
SCHOOL, HIGH – A school offering the final years of high school work necessary for graduation; invariably preceded by a junior high school in the same system. State College’s grade structure currently includes students in grades 9 through 12.
SCHOOL, VOCATIONAL – A secondary school which is separately organized under a principal for the purpose of offering training in one or more skilled or semi-skilled trades or occupations. It includes such schools whether federally aided or not.
TAXES – Compulsory charges levied by a governmental unit for the purpose of financing services performed for the common benefit. The term includes licenses and permits. It does not include special assessments.