MARTY’S SIMPLE GLOSSARY OF FINANCE TERMS

(Unabashed and Unofficial)

C808 Report: A widely used report monitor budgets and expenditures. This report is
like the gold standard for daily financial management. This is also the report most
commonly used by the Office of Management and Budget for reference. The network
connection to the reports is \\Apple\FI-Reports. After establishing the connection, click
on the PeopleSoft hyperlink and follow the trail.

Budget: Legal authority to spend.

Appropriation: Committing funds to be spent. Appropriations must be in place to

create a requisition, purchase order or make a payment.

Pre-encumbrance: Requisitions entered as the first step of creating a purchase order.

When the Procurement Office approves a requisition, it becomes a purchase order at that
time.

Encumbrance: Purchase orders are encumbrances. When the Procurement Office

approves a requisition, the associated pre-encumbrance becomes an encumbrance.

Expenditure: Recognition of the cost of some good or service. When a purchase order
(encumbrance) is paid, it becomes expenditure.

Life Cycle of Expenditures: Appropriation (commit funds)  Requisition (pre-

encumbrance)  Purchase Order (encumbrance)  Payment (expenditure).

PeopleSoft Accounting Distribution: The group of numbers and letters that define
where a revenue or expenditure is recorded on the City’s PeopleSoft financial system.
These are the official set of codes instructed per the Finance Director. The codes consist
of Fund-Operating Unit-Department ID-Program Code-Project Code-Account Code.

Fund: Defines the organization at the highest level of roll up. Fleet Services fund
number is 350. The CIP fund number is 039.

Operating Unit: Defines the organization at the level just below Fund. There can be
more than one operating unit per fund. Fleet Services operating unit number is 0455.
The CIP operating unit number is 0175.

Department ID: Defines the organization at the service level or other means that
Departments need to manage their budget, or other financial purposes. Department ID
are now defined to identify LFR programs in the City’s financial system.
Program Codes: Optional codes Departments can use for various purposes. Usually
used to track costs for specific activities in more detail than provided by Department ID.

Project Codes: Optional codes Departments can use for various purposes. Usually used
to track costs for specific activities in more detail than provided by Department ID.
Project Codes are more restricted for purpose than Program Codes. The CIP uses
Program Codes to allocate funding for special projects.

Account Codes: The highest level of detail available. They are used to record specific
expenditures, such as salaries, computer supplies, fuel purchases, and the like.

Fund Balance: A calculated amount of funds remaining at a specific time.

Funds Available For Appropriation: The amount of Fund Balance that is not obligated
in any way. These are the funds that are free to increase appropriations that also allow
increased spending (the life cycle starts with an appropriation).

Municipal Budget Act: An act in the Oklahoma State Statute that defines procedures for
municipal finance. Key features are establishment of budgets by expenditure class
(Personal Services, Other Services and Fees, Supplies and Capital Outlay), amendment of
budgets, and other compliance issues.