Glossary of General Accounting Terms

Edited and Prepared by: Prof. Dr. Mentz

ACCOUNT - A fiscal and accounting entity with a self-balancing set of general ledger codes in which cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, are recorded and segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. For reporting purposes, the state identifies certain accounts as major funds, and administratively combines all remaining accounts into roll-up funds. Refer to MAJOR FUND, and ROLL-UP FUND.

ACCOUNT CODE - The three-character alpha/numeric code assigned by the Office of Financial Management (OFM) to identify each account. Refer to ACCOUNT.

ACCOUNTING PERIOD - Any period of time designated for which financial statements are prepared. Refer to FISCAL PERIOD.

ACCOUNTING PROCEDURES - All procedures that discover, identify, record, classify, maintain, and summarize financial information to either produce financial reports or to provide internal control.

ACCOUNTING SYSTEM - The methods and records established to identify, assemble, analyze, classify, record, and report the state's transactions and to maintain accountability for its assets and liabilities.

ACCOUNTS PAYABLE - Amounts owed to private persons or organizations for goods and/or services received by the state. Accounts Payable does not include amounts due to other agencies, funds, or other governments. Refer to DUE TO.

ACCOUNTS RECEIVABLE - Amounts due from private persons or organizations for goods, and/or services furnished by the state. Accounts Receivable does not include amounts due from other agencies, funds, or other governments. Refer to DUE FROM.

ACCRETED VALUE - A valuation basis for certain investments and debt instruments that reports on the balance sheet only that portion of their face value that reflects principal and interest accrued to date.

ACCRUAL BASIS - The basis of accounting whereby revenues are recognized when earned and measurable regardless of when collected; and expenses are recorded on a matching basis when incurred. All proprietary and fiduciary funds use the accrual basis of accounting.

ACCRUE - To record revenues and expenditures/expenses when they meet the recognition criteria of the fund type involved regardless of when the cash activity occurs.

ACCRUED EXPENDITURES/EXPENSES - Expenses or expenditures that meet the appropriate recognition criteria of the fund type involved but have not been paid. Accrued expenditures are expected to be paid in a subsequent accounting period. Refer to ACCRUAL BASIS and ACCRUE.

ACCRUED LIABILITIES - Liabilities reflecting the obligation to pay for goods or services that have been incurred or received but not paid for by the end of the accounting period.

ACCRUED REVENUES - Revenues that meet the appropriate recognition criteria of the fund type involved, but are not realized during the accounting period. Refer to ACCRUAL BASIS, ACCRUE, and MODIFIED ACCRUAL BASIS.

ACCUMULATED DEPRECIATION - A contra-asset valuation account used to record the accumulation of periodic credits made to reflect the expiration of the estimated useful life of capital assets.

ACTUARIAL BASIS - A basis used in computing the amount of contributions to be made periodically to a fund or account so that the total contributions plus the compounded earnings thereon will equal the required payments to be made out of the fund or account. A Pension Trust Fund for a public employee retirement system is an example of a fund concerned with actuarial basis data.

ADA - An acronym for the Americans with Disabilities Act of 1990.

ADMINISTERING AGENCY - An agency designated by the Office of Financial Management to provide general oversight of financial accounting activity. An administering agency is also responsible for the cash management of the funds it administers.

ADVANTAGEOUS - Direct non-financial, work-related benefits accruing to the state.

AFRS - Refer to AGENCY FINANCIAL REPORTING SYSTEM.

AGENCY - Every state agency, office, board, commission, department, state institution, or state institution of higher education, which includes all state universities, regional universities, The Evergreen State College, and community and technical colleges.

AGENCY CODE - The four character numeric code assigned by the Office of Financial Management to designate the distinct operational units of state government. Agency codes are used for the identification of state agencies. Agencies are to use only the code assigned to their agency unless specified elsewhere in this manual. Refer to AGENCY.

AGENCY FINANCIAL REPORTING SYSTEM (AFRS) - The statewide accounting system maintained by the Office of Financial Management. AFRS is the state of Washington's official accounting system.

AGENCY FUNDS - Agency funds are used to account for the assets held by the state as an agent for individuals, private organizations, and other governments. Agency funds are purely custodial in nature. Refer to FIDUCIARY FUNDS.

ALLOCATE - To divide a lump-sum appropriation into parts that are designated for expenditure by specific governmental units and/or for specific purposes, activities, or objects. Refer to ALLOCATION.

ALLOCATION - A part of a lump-sum appropriation that is designated for expenditure by specific governmental units and/or for specific purposes, activities, or objects. Refer to EXPENDITURE AUTHORITY.

ALLOTMENT - An agency's plan of estimated expenditures, revenues, cash disbursements, and cash receipts for each month of the biennium.

ALLOWABLE MOVING COSTS - Except as noted in Subsection 60.20.20 and within certain limitations, allowable moving costs include the costs associated with moving household goods, personal effects, and property used in a dwelling, and normal equipment and supplies used to maintain a dwelling from a residence to a new station within the state. Refer to HOUSEHOLD GOODS and Chapter 60.

ALLOWANCE FOR DEPRECIATION - Refer to ACCUMULATED DEPRECIATION.

ALLOWANCE FOR UNCOLLECTIBLES - A contra-asset valuation account used to indicate the portion of accounts receivable that is estimated to be uncollectible.

AMORTIZATION - The gradual reduction or liquidation of an amount over a period of time according to a specified schedule (such as, the retirement of a debt by serial payments to the creditor or in a sinking fund) either by a direct credit, or debit; or through the use of a valuation account.

AMORTIZED COST - The par value of the investment increased or decreased by any unamortized premium or discount.

AMOUNT AVAILABLE IN DEBT SERVICE FUNDS - An "other debit" general ledger code used in the General Long-Term Obligations Subsidiary Account that designates the amount of assets available in debt service funds for the retirement of outstanding general obligation debt.

AMOUNT TO BE PROVIDED FOR RETIREMENT OF LONG-TERM OBLIGATIONS - An "other debit" general ledger code used in the General Long-Term Obligations Subsidiary Account that represents the amount to be provided from taxes or other general revenues to retire outstanding general long-term obligations debt.

ANCILLARY COSTS - Costs that are directly attributable to asset acquisition, such as freight and transportation costs, site preparation costs, and professional fees, that are necessary to place a capital asset into its intended state of operation. Ancillary costs are capitalized as part of the cost of a capital asset. For an investment, ancillary costs include legal fees and commissions and are included as part of the cost of the investment.

ANNUITY - A series of equal money payments made or received at equal intervals over a designated period of time.

APPRAISAL - (1) The act of appraising. (2) The estimated value resulting from such action. Refer to APPRAISE.

APPRAISE - To make an estimate of value of an asset, for example an investment or capital asset, particularly of the value of property.

APPROPRIATION - A legislative authorization for an agency to make expenditures for specific purposes from designated resources available or estimated to be available during a specified time period.

APPROPRIATION CODE - Refer to EXPENDITURE AUTHORITY CODE.

APPROVING MANAGER - An individual within an agency who is responsible for designating purchase card custodians and establishing purchase card limits within the organization.

ART COLLECTION - An individual work of art or group of items of original artwork such as paintings, sculptures, craftwork or other materials commonly identified as a work of art. Art collections that are considered inexhaustible and meet certain criteria are not required to be capitalized. Agencies meeting the criteria for not capitalizing a collection have the option of capitalizing art collections as non-depreciable capital assets. Art collections that are exhaustible (such as those whose useful lives are diminished by display or educational/research applications) are to be capitalized and depreciated.

ASSETS - A probable future economic benefit obtained or controlled by a particular entity as a result of past transactions or events. These economic resources can be tangible or intangible.

AUDIT - A systematic collection of the sufficient, competent evidential matter needed to attest to the fairness of management's assertions in the financial statements or to evaluate whether management has efficiently and effectively carried out its responsibilities. The auditor obtains this evidential matter through inspection, observation, inquiries, and confirmations with third parties. Refer to COMPLIANCE AUDIT, CORRECTIVE ACTION PLAN, FINANCIAL AUDIT, PERFORMANCE AUDIT, AND SINGLE AUDIT.

AUTHORIZED TRAVEL PERIOD - That period of time when the traveler is in authorized travel status away from the official station and official residence. Refer to OFFICIAL STATION, OFFICIAL RESIDENCE, and TRAVELER.

AUTOMATED CLEARING HOUSE (ACH) - A nationwide payment and collection system that provides for electronic distribution and settlement of funds. Although the term Electronic Fund Transfer (EFT) is technically more inclusive than the term ACH, the term EFT is often used synonymously with ACH..

AUTOMATED TELLER MACHINE (ATM) - Computer controlled terminals located at a bank branch or other location, which enable a customer to perform basic banking activities (such as, withdrawals, deposits, or transferring funds) as they would through a bank teller.

BALANCE SHEET - A financial statement that discloses the assets, liabilities, and equities of an entity at a specified date in conformity with generally accepted accounting principles (GAAP).

BASIS OF ACCOUNTING - This refers to the methodology and timing of when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Refer to ACCRUAL BASIS, MODIFIED ACCRUAL BASIS and CASH BASIS.

BETTERMENT - An addition made to, or change made in, a capital asset, other than maintenance, that is anticipated to prolong its expected useful life or to increase its capacity, efficiency, or quality of output.

BIENNIUM - A 24-month fiscal period. In Washington, the biennium extends from July 1 of odd numbered years to June 30 of odd numbered years.

BLOCK GRANT - A federal grant that consolidates, for a broad purpose, funding previously awarded for a wide range of activities.

BOND - A debt instrument issued through a formal legal procedure and secured either by the pledge of specific properties or revenues or by the general credit of the state.

BOND DISCOUNT - The excess of the face value of a bond over the price for which it is acquired or sold resulting from a disparity between the market rate of interest and the stated rate of interest on the bonds, also referred to as original issue discount (OID). In governmental funds, bond discount associated with a bond sale is reported as an other financing use.

BOND ISSUE - A reference indicating the particular classification or quantity of bonds issued at a given time.

BOND PREMIUM - The excess of the price for which a bond is acquired or sold over its face value resulting from a disparity between the market rate of interest and the stated rate of interest on the bonds, also referred to as original issue premium (OIP). In governmental funds, bond premium associated with a bond sale is reported as another financing source.

BOND REDEMPTION - The regaining of possession of bonds formerly issued by payment of amount due to the holder.

BONDS PAYABLE - The face value of bonds issued and unpaid. In the case of zero-coupon bonds, however, only the accreted value of the bond is reported as bonds payable on the balance sheet.

BOOK VALUE - The net amount at which an asset or asset group appears on the books of account, as distinguished from its market or intrinsic value. In the case of assets subject to reduction by valuation allowances, book value refers to cost or stated value less the appropriate allowance.

BOOKS OF ORIGINAL ENTRY - Books of original entry are a record in which the various transactions are initially and formally recorded and serve as the direct source of postings to ledgers (e.g. payroll register).

BUDGET - A plan of financial operation embodying an estimate of proposed expenditures for a given period of time and the proposed means of financing them.

BUDGETARY ACCOUNTS - Accounts used to enter the adopted budget into the general ledger as part of the management control technique of formal budgetary integration.

BUDGETARY CONTROL - The control or management of a governmental unit in accordance with an approved budget for the purpose of keeping expenditures within the limitations of available appropriations and available revenues.

BUDGETED ACCOUNTS - Accounts that are subject to the appropriation and/or allotment process. Refer to APPROPRIATION and ALLOTMENT.

BUILDINGS - Permanent structures owned or held by the state. The cost of buildings includes both acquisition costs (historical cost, ancillary costs, and, for proprietary and trust funds, net interest during construction) and capital improvement costs (betterments). Buildings include not only structures in the form of office buildings, storage quarters, or other facilities, but also associated items such as loading docks, heating and air-conditioning equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. Buildings can be capitalized as a single unit, or by individual component. Buildings do not include furniture, fixtures, or other equipment, which are not integral parts of the building. Refer to BETTERMENT.

BUSINESS-TYPE ACTIVITIES - Reported in the government-wide financial statements. Financed in whole or in part by fees charged to external parties for goods or services that are usually reported in enterprise funds. Refer to GOVERNMENT-WIDE FINANCIAL STATEMENTS.

CAPITAL ASSETS - Assets that meet the state's capitalization policy such as land, improvements to land, easements, buildings, leasehold improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in state operations and that have initial useful lives extending beyond one year. Capital assets do not include depletable resources such as minerals or timber.

CAPITAL BUDGET - The portion of a budget, or a separate budget, devoted to proposed additions to capital assets and the means of financing those additions.

CAPITAL EXPENDITURE - Refer to CAPITAL OUTLAYS.

CAPITAL GRANTS - Grants that are restricted for the acquisition, construction, or renovation of capital assets associated with a specific program. Refer to GRANTS and OPERATING GRANTS

CAPITAL OUTLAYS - A budgetary or financial reporting term to indicate the expenditures for the acquisition of, addition to, or major repair of capital assets intended to benefit future periods. Expenditures may be from either Operating or Capital sources, and may be either capitalized or not capitalized.

CAPITAL PROJECTS FUNDS - Capital projects funds are used to account for the acquisition and/or construction of major capital facilities (other than those financed by proprietary funds and trust funds). Refer to GOVERMENTAL FUNDS.

CAPITALIZATION POLICY - The criteria used to determine which capital outlays should be reported as capital assets on the state's financial statements.

CARD CUSTODIAN - An individual who is assigned responsibility of purchase card security and issuance of cards to authorized users.

CARD CUSTODIAN STATEMENT - A zero balance due statement, listing all transactions during the billing period, that is sent to the purchase card custodian by the purchase card provider.

CASH BASIS - A basis for accounting whereby revenues are recorded only when received and expenses are recorded only when paid without regard to the period in which they were earned or incurred.

CASH DISCOUNT - An allowance received or given if payment is completed within a stated period of time. Refer to TRADE DISCOUNT.

CASH DISBURSEMENTS - Cash disbursements are any moneys (e.g., checks, cash, warrants, credit or debit card amounts, and EFTs (Electronic Fund Transfers) paid by the state during a period regardless of when the related obligations are incurred.

CASH EQUIVALENT - Short-term, highly liquid investments that are both (1) readily convertible to known amounts of cash and (2) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally only investments with original maturities of three months or less meet this definition.

CASH RECEIPTS - Cash receipts are any moneys (e.g., checks, cash, warrants, credit or debit card amounts, or EFTs) received by the state during a period regardless of when the moneys are earned.

CASH/INVESTMENTS WITH ESCROW AGENT - An asset account reflecting deposits with escrow agents.

CATEGORICAL GRANTS - Federal grants that are awarded for specific limited purposes.

CENTRAL TRAVEL ACCOUNT - Terminology used by the credit card company for a "ghost billing account."

CHANGE ACCOUNTS - Accounts used solely for making change in across-the-counter cash transactions. Refer to IMPREST ACCOUNT.

CERTIFICATE OF PARTICIPATION (COP) - A debt financing program administered by the Office of the State Treasurer. A COP is an instrument evidencing a pro rata share in a specific pledged revenue stream, usually lease payments by the issuer that are subject to annual appropriation. The certificate generally entitles the holder to receive a share, or participation, in the lease payments from a particular project. The lease payments are passed through the lessor to the certificate holders. The lessor typically assigns the lease and lease payments to a trustee, which then distributes the lease payments to the certificate holders.

CHECK - A written order on a bank to pay on demand a specified sum of money to a named person, out of money on deposit to the credit of the maker. A check differs from a warrant in that the latter is not necessarily payable on demand and may not be negotiable. It also differs from a voucher in that the latter is not an order to pay. Refer to WARRANT.

CHECK REGISTER - The document used to record pertinent details relating to expenditure/expense vouchers and coding for each check issued.

CHILD CARE FACILITY - Space used by a child care provider to provide child care services for state government employees.

CHILD CARE PROVIDER - An entity that is, or commits to becoming, licensed to operate a Washington State day care facility, an entity that regularly provides care for children for periods of less than twenty-four hours.

CLEARANCE PATTERN - The proportion of the total amount disbursed that is debited against the state's bank account each day after the disbursements.

CLEARING ACCOUNT - An account used to accumulate total charges or credits so that they can be distributed later among the accounts to which they are allocable or so that the net differences can be transferred to the proper account.

CLIENT - For travel regulation purposes, a person or entity that is entitled to receive agency services.

CLIENT SERVICES - Services provided directly to agency clients including, but not limited to, medical and dental services, employment and training programs, residential care, and subsidized housing. Clients are considered to be those individuals who the agency has statutory responsibility to serve, protect, or oversee.

COFFEE AND LIGHT REFRESHMENTS - For state purposes, coffee encompasses any non-alcoholic beverage, such as tea, soft drinks, juice, or milk. For state purposes, a light refreshment is an edible item that may be served between meals, for examples, doughnuts, sweet rolls, and pieces of fruit or cheese.

COLLECTIONS - Refer to LIBRARY RESERVE COLLECTIONS, MUSEUM AND HISTORICAL COLLECTIONS, and ART COLLECTIONS./P>

COMMERCIAL LODGING FACILITY - A business, non-profit, or governmental entity that provides lodging accommodations for a fee.

COMMODITY CLASS CODE - The code assigned to an inventoriable capital asset that correlates to a descriptive title.

COMMON CARRIER - A person or company that transports passengers or goods for a fee.

COMMUTER RIDE-SHARING - A car pool or van pool arrangement whereby a fixed group, not exceeding fifteen persons including passengers and driver, is transported between their residences or other designated place, and their places of employment, educational, or other institutions, in a single daily round trip where the driver is also on the way to or from the place of employment, educational, or other institution.

COMMUTE - Travel between the official residence and other domicile of a state officer or employee and their official station or other place of work. Refer to OFFICIAL RESIDENCE and OFFICIAL STATION.

COMPENSATORY TIME - Time worked by certain state employees that, if not used for paid time off, results in compensation to be cashed out in accordance with regulations or agency policy.

COMPETITIVE SOLICITATION - A documented formal process providing an equal and open opportunity to qualified parties and culminating in a selection based on criteria which may include such factors as the consultant's fees or costs, ability, capacity, experience, reputation, responsiveness to time limitations, responsiveness to solicitation requirements, quality of previous performance, and compliance with statutes and rules relating to contracts or services.

COMPLIANCE AUDIT - An examination leading to the expression of an opinion on the audited governmental unit's compliance with the various finance-related legal and contractual provisions. Refer to AUDIT.

COMPONENT UNIT - A unit legally separate from the state but financially accountable to the state, or have a relationship with the state such that exclusion would cause the state's financial statements to be misleading or incomplete.

COMPOSITE METHOD - A method used to calculate depreciation expense that groups similar assets (such as library resources) or dissimilar assets of the same class (such as all roads and bridges in a park) using the same depreciation rate. Refer to DEPRECIATION.

COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) - The official annual financial report of the state encompassing all funds and component units of the state. It includes an introductory section, management's discussion and analysis (MD&A), basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, schedules, and a statistical section.

CONSTRUCTION IN PROGRESS - A general ledger account that reflects the cost of construction work undertaken on capital projects, but not completed as of the end of the accounting period.

CONSULTANT - An independent individual or entity contracting with an agency to perform a personal service or render an opinion or recommendation according to the consultant's methods and without being subject to the control of the agency except as to the result of the work. The agency monitors progress under the contract and authorizes payment.

CONSUMABLE INVENTORIES - Supplies consumed in the course of an agency's operations; or incidental items held for resale.

CONSUMPTION METHOD - The method under which inventories are recorded as an expenditure/expense when used. Refer to PURCHASES METHOD.

CONTINENTAL BREAKFAST - A breakfast generally consists of juice, bread, and a hot beverage (typically coffee or tea). Fruit is sometimes included as part of the price or as a priced option.

CONTINENTAL USA - As used in this manual, all areas in the 48 contiguous states and the District of Columbia.

CONTINGENT LIABILITY - Items which may become liabilities as a result of conditions undetermined at a given date, such as guarantees, pending law suits, judgments under appeal, unsettled disputed claims, unfilled purchase orders, and uncompleted contracts.

CONTRACTS PAYABLE - Amounts due on contracts for public improvements on work done for a governmental unit are to be recorded as Contracts Payable. Amounts withheld from that which is due the contractor and are intended to serve as a guarantee on the contracts are to be recorded separately as retainage payable. Refer to RETAINAGE PAYABLE.

CONTROL ACCOUNT - An account in the general ledger in which the aggregate of all debit and credit postings to a number of related accounts (called the subsidiary accounts) are recorded. For example, the Accounts Receivable account is a control account supported by the aggregate of the individual customer subsidiary accounts. Refer to GENERAL LEDGER and SUBSIDIARY ACCOUNTS.

CORRECTIVE ACTION PLAN - An agency response to audit findings that documents how deficiencies are to be corrected, how improvements are to be made, or demonstrates that audit findings are invalid or do not warrant any subsequent action. Refer to AUDIT.

COST ACCOUNTING - That method of accounting which provides for accumulating and recording of all the elements of cost incurred to accomplish a purpose, to carry on an activity or operation, or to complete a unit of work or a specific job.

COST-BASED MEASURE - Value of investment that is based on the cost of the investment.

COST RECORDS - All ledgers, supporting records, schedules, reports, invoices, vouchers, and other records and documents reflecting the cost of projects, jobs, production centers, processes, operations, products, or services, or the cost of any of the component parts thereof.

CREDIT CARD - A card entitling the holder to buy services or goods on credit.

CURRENT ASSETS - Resources that are available, or can readily be made available, to meet the cost of operations or to pay current liabilities.

CURRENT FINANCIAL RESOURCES MEASUREMENT FOCUS - Measurement focus used by governmental funds that accounts for the near-term (current) inflows, outflows, and balances of expendable (spendable) financial resources. Refer to MEASUREMENT FOCUS.

CURRENT LIABILITIES - Those obligations which are payable within one year from current assets or current resources.

CUT-OFF DATE - A selected date whereby transactions generally are stopped to provide for closing of the books of accounts for a given period, or for audit purposes.

DEBIT CARD - A card that draws funds directly from a deposit account.

DEBT - An obligation resulting from the borrowing of money or from the purchase of goods and services. Debts of the state include bonds, accounts payable, and other liabilities. Refer to BONDS PAYABLE, ACCOUNTS PAYABLE, LIABILITIES, LONG-TERM OBLIGATIONS and GENERAL LONG-TERM OBLIGATIONS.

DEBT SERVICE FUNDS - Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term obligation principal and interest. Refer to GOVERNMENTAL FUNDS.

DEFERRED CHARGES - An asset account reflecting costs which are not chargeable to the accounting period in which paid but are recorded as assets until amortized. An example is discount on bonds issued. Deferred charges differ from prepaid expenses in that deferred charges usually extend over a long period of time (more than five years) and are not a regularly recurring cost of operation. Refer to PREPAID EXPENSES.

DEFERRED REVENUES - Deferred revenues are amounts for which asset recognition criteria have been met, but for which revenue recognition criteria for the fund type have not been met.

DEFICIT - (1) The excess of the liabilities and reserves of a fund over its assets. (2) The excess of expenditures over revenues during an accounting period or, in the case of proprietary funds, the excess of expenses over revenues during an accounting period.

DEPOSIT - Money or securities held in a bank or other financial institution. In the context of required note disclosures, deposits include cash and near cash items placed on account with a financial institution or fiscal agent. Some deposits (e.g., checking accounts) are subject to withdrawal upon demand without notice or penalty (demand deposits) and others (e.g., certificates of deposit) can only be withdrawn without penalty upon completion of a fixed period (time deposits).

DEPRECIABLE CAPITAL ASSETS - Capital assets that are depreciated because they are exhaustible in that their useful lives diminish over time. Exceptions to this include infrastructure assets reported using the modified approach to depreciation. Refer to DEPRECIATION and MODIFIED APPROACH TO DEPRECIATION.

DEPRECIATION - The portion of the cost of a capital asset representing the expiration in the useful life of the capital asset attributable to wear and tear, deterioration, action of the physical elements, inadequacy, and obsolescence which is charged off during a particular period. In accounting for depreciation, the cost of a capital asset, less any salvage value, is prorated over the estimated useful life of such an asset. Refer to COMPOSITE METHOD and STRAIGHT-LINE METHOD.

DESIGNATED FINANCE OFFICE - The office designated by the agency to receive the official purchase card statement and, in most instances, make payment against the official statement.

DESIGNATED UNRESERVED FUND BALANCE - Management's intended use of available expendable financial resources in governmental funds reflecting actual plans approved by the government's senior management. Expressed another way, designations reflect a government's self-imposed limitations on the use of otherwise available expendable financial resources in governmental funds.

DIRECT COSTS - Costs that include direct materials and labor. Refer to DIRECT EXPENSES.

DIRECT EXPENSES - Expenses which are charged directly as a part of the cost of a product or service, or of a department or operating unit, as distinguished from overhead and other indirect costs which must be prorated among several products or services, departments, or operating units.

DISBURSEMENT - Payment by cash, warrant, check, journal voucher, EFT, or any other technological payment method approved by OFM.

DISCLOSURE FORMS - The state Disclosure Forms application is an electronic way of capturing the detail data for various aspects of an agency's activities. Each of the disclosure forms covers a specific activity or area of information that is not readily available from the data collected in the state's Agency Financial Reporting System (AFRS). Agencies complete these forms at fiscal year end.

DISPOSAL AUTHORIZATION - The policies and processes established by the Division of Commodity Redistribution, Department of General Administration or the Department of Information Services, as applicable, by which an agency is authorized to dispose of a specific asset or as provided by specific statutory authority.

DISPOSAL DATE - With proper approval, the date that an agency officially disposes of or relinquishes responsibility for an asset.

DISPUTED ITEM - An item in question or lacking agreement by parties involved, such as an item appearing on a purchase card custodian statement that the card custodian disagrees with.

DIVISION OR COST CENTER CODE - A code assigned by an agency to further identify its organizational structure.

DONATED ASSETS - Assets acquired by gift, donation, or payment of a nominal sum, which is not reflective of the assets' true market value.

DONATED INVENTORIES - Food or other items held for future distribution.

DONATED LEAVE - The dollar value of the hours of leave a donor donates through the Shared Leave Program. Refer to SHARED LEAVE.

DOUBLE ENTRY BOOKKEEPING - A system of record keeping which requires two entries to the records (a debit and a credit) for every accounting event.

DRAWDOWN - Process whereby a state requests and receives federal funds.

DRY CHARTER - This is an agency contract for rental of an aircraft that provides a "state pilot" or a state employee as the pilot.

DUE FROM FEDERAL GOVERNMENT - An asset account reflecting amounts due to the state from the federal government. These amounts may represent grants-in-aid, shared revenues, loans, and/or charges for services rendered by the state for the federal government.

DUE FROM OTHER AGENCIES - An asset account reflecting amounts billed or otherwise due for materials or services rendered by one Washington state agency to another Washington state agency.

DUE FROM OTHER FUNDS - An asset account reflecting amounts owed to a particular fund by another fund in the same agency for goods sold or services rendered. This account includes only short-term obligations on open account and not non-current portions of long-term loans.

DUE FROM OTHER GOVERNMENTS - An asset account reflecting amounts due to the state from another government (e.g., county or municipality). These amounts may represent grants-in-aid, shared revenues, loans, and charges for services rendered by the state for another governmental entity.

DUE TO FEDERAL GOVERNMENT - A liability account reflecting amounts owed by the state to the federal government.

DUE TO OTHER AGENCIES - A liability account reflecting amounts owed by one Washington state agency to another Washington state agency.

DUE TO OTHER FUNDS - A liability account reflecting amounts owed by a particular fund to another fund in the same agency. These amounts include only short-term obligations on open account.

DUE TO OTHER GOVERNMENTS - A liability account reflecting amounts owed by the state to another government (e.g., county or municipality).

ECONOMIC FEASIBILITY - An application is economically feasible when, over a reasonable period of time, the application's cumulative benefits outweigh or are equivalent to the application's cumulative costs.

ECONOMIC FEASIBILITY STUDY (EFS) - A cost/benefit analysis of a state agency's proposed electronic payment and/or disbursement project that should demonstrate the economic feasibility (net benefit) of the proposed project. Refer to Section 40.40.

ECONOMIC RESOURCES MEASUREMENT FOCUS - Considers all of the assets available for the purpose of providing goods and services and reports all inflows, outflows, and balances affecting or reflecting an entity's net assets. The economic resources measurement focus is used for proprietary and fiduciary funds, as well as for government-wide financial reporting. Refer to MEASUREMENT FOCUS.

ECONOMICAL - Direct financial, work-related costs that occur at the least cost to the state and which the state is responsible to pay.

EFFECTIVE INTEREST RATE - The rate of earning on a bond investment based on the actual price paid for the bond, the coupon rate, the maturity date and the length of time between interest dates, in contrast with the nominal interest rate.

ELECTRONIC BENEFIT TRANSFER (EBT) - The electronic transfer of government benefit funds to individuals through the use of automated card technology, automated teller machines (ATM) and point of sale (POS) terminals.

ELECTRONIC CHECK - An electronic version or representation of a paper check. The account holder writes an e-check using a computer or other type of electronic device and transmits the e-check to the payee electronically. Like paper checks, e-checks are signed by the payer and endorsed by the payee. Rather than handwritten or machine-stamped signatures, however, e-checks are affixed with digital signatures. The payee deposits the e-check, receives credit, and the payee's bank clears the e-check to the paying bank. The paying bank validates the e-check and then charges the check writer's account for the check.

ELECTRONIC COMMERCE/E-COMMERCE - The commercial transaction of services in an electronic format.

ELECTRONIC DATA INTERCHANGE (EDI) - A computer-to-computer exchange of information that is both computer-readable and computer-processable.

ELECTRONIC DATA PROCESSING (EDP) - Data processing by means of high-speed electronic equipment.

ELECTRONIC FUND TRANSFER (EFT) - Any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephone instrument, or computer or magnetic tape to authorize a financial institution to debit or credit an account.

EMERGENCY - A set of unforeseen circumstances beyond the control of an agency that either: (a) presents a real, immediate threat to the proper performance of essential functions; or (b) may result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken.

EMINENT DOMAIN - The power of a government to acquire private property for public purposes. It is frequently used to obtain real property that cannot be purchased from owners in a voluntary transaction. Where the power of eminent domain is exercised, owners are compensated by the state in an amount determined by the courts.

ENCUMBRANCE - A reservation of an expenditure authority for an obligation in the form of purchase orders or contracts. An encumbrance represents a commitment. It is not an expenditure.

ENDOWMENT - Refer to PERMANENT FUNDS.

ENTERPRISE FUNDS - Used to account for any activity for which a fee is charged to external users for goods or services. Activities are required to be reported as enterprise funds, in the context of the activity's principal revenue sources, if any one of the following criteria is met: a) the activity is financed with debt that is secured solely by pledge of the net revenues from fees and charges of the activity; 2) laws or regulations require that the activity's costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues. Refer to PROPRIETARY FUNDS.

ENTITLEMENT - A service or grant that, under federal law, must be provided to all eligible applicants.

ENTITY - The basic unit upon which accounting and/or financial reporting activities are focused.

ENTRY - The record of a financial transaction in the appropriate books of account.

EQUIPMENT - Tangible property other than land, buildings, improvements other than buildings, or infrastructure, which is used in operations and with a useful life of more than one year. Examples are furnishings, equipment, and software. Equipment may be attached to a structure for purposes of securing the item, but unless it is permanently attached to, or an integral part of, the building or structure, it is to be classified as equipment and not buildings.

EQUITY INVESTMENTS - Equity investments include, but are not limited to, any instruments representing ownership shares in an enterprise (e.g., common, preferred, and other capital stock).

EQUITY TRANSFERS - Nonrecurring or nonroutine transfers of equity between funds. An example of an equity transfers is the transfer of residual equity from a discontinued fund. Refer to INTERFUND TRANSFERS.

ESTIMATED REVENUE - This is a budgetary term that identifies revenues expected to be received or accrued during a given period.

EVIDENCE OF COMPETITION - Documentation demonstrating that an agency has solicited responses from multiple firms in selecting a consultant.

EXCHANGE TRANSACTIONS - Transaction in which each party receives and gives up essentially equal values.

EXCHANGE-LIKE TRANSACTIONS - Transaction in which there is an identifiable exchange between the state and another party, but the values exchanged may not be quite equal or the direct benefits of the exchange may not be exclusively for the parties to the exchange.

EXHAUSTIBLE CAPITAL ASSETS - Refer to DEPRECIABLE CAPITAL ASSETS and MODIFIED APPROACH TO DEPRECIATION.

EXPENDITURE AUTHORITY - Permission for agencies to disburse moneys or accrue liabilities during specific fiscal periods, up to specified amounts, from specific accounts. Authority is provided by the Legislature through appropriations or inclusion of nonappropriated account moneys in the legislative budget; by the executive through allocations, approval of unanticipated receipts, or across-the-board spending reductions.

EXPENDITURE AUTHORITY CODE - The three-character code assigned by the Office of Financial Management (OFM) to identify each legislative or executive authorization to incur expenditures. Agencies are to use only those expenditure authority codes that have been authorized in writing by OFM. The assigned codes are valid only for the biennium for which they are established. Refer to EXPENDITURE AUTHORITY, APPROPRIATION, UNANTICIPATED RECEIPT, and ALLOCATION.

EXPENDITURES - Decreases in net current financial resources. Expenditures include disbursements and accruals of the current period. Expenditures do not include encumbrances.

EXPENSES - Decreases in net total assets. Expenses represent the cost of operations incurred during the current period regardless of the timing of the related disbursements.

FACE VALUE - As applied to securities, this term designates the amount of an insurer's liability stated in the security document.

FAIR VALUE - The amount that could reasonably be expected to be received for an investment in a current sale between a willing buyer and a willing seller. For publicly traded securities, this is the price at which the security is currently being traded on a national market. For investment instruments that are not publicly traded, this is the appraised value adjusted for cash flows to or from the investment.

FEDERAL FINANCIAL ASSISTANCE - Assistance that nonfederal entities receive or administer in the form of grants, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, or other assistance. It does not include amounts received for provision of vendor services to federal agencies or reimbursements for services rendered directly to individuals.

FIDELITY BOND - A written promise to indemnify against losses from theft, embezzlement, defalcation, and misappropriation of public moneys by government officers and employees. Refer to SURETY BOND.

FIDUCIARY FUNDS - Fiduciary funds are used to account for assets held by the state in a trustee capacity, or as an agent for others and that cannot be used to support the state's own programs. There are four types of fiduciary funds: private-purpose, pension (and other employee benefit), and investment trust funds, and agency funds. Refer to PRIVATE-PURPOSE TRUST FUNDS, PENSION (AND OTHER EMPLOYEE BENEFIT) TRUST FUNDS, INVESTMENT TRUST FUNDS, and AGENCY FUNDS.

FIELD ORDER (A17-A, A17-1A) - A document used by agencies to order, encumber, liquidate, and authorize payment for local purchases. This form is used when an agency has general or specific authority to make the purchase or when the item being purchased falls within the statewide contracts.

FINAL AMENDED BUDGET - The original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes applicable to the fiscal year, whenever signed into law or otherwise legally authorized.

FINANCIAL AUDIT - An audit made by an independent external auditor for the purpose of issuing an audit opinion on the fair presentation of the financial statements of the state in conformity with GAAP. Refer to AUDIT.

FIRST-IN, FIRST-OUT (FIFO) - An inventory valuation method, which allocates cost on the assumption that goods are consumed or sold in the order that they were acquired.

FISCAL PERIOD - Any period at the end of which a governmental unit determines its financial position and the results of its operations. Refer to ACCOUNTING PERIOD.

FISCAL YEAR - In Washington State, a 12-month period extending from July 1 of one calendar year to June 30 of the next calendar year.

FIXED ASSETS - Refer to CAPITAL ASSETS.

FIXED INCOME INVESTMENTS - Fixed income investments consist of those non-equity assets (e.g., bonds) where earnings are derived from interest that is a fixed percentage of the asset's par, stated, or face value. These may include investments purchased at a discount that do not have coupon payments.

FIXTURES - Attachments to buildings, which are not intended to be removed, and which cannot be removed without damage to the buildings. Those fixtures with useful lives presumed to be as long as that of the building itself are considered a part of the building; all others are classified as equipment.

FOOD STAMPS - For financial reporting purposes, the dollar value of food stamps on hand for future distribution.

FOREIGN TRAVEL - Travel in all areas of the world outside of the United States of America and its possessions.

FULL-TIME EQUIVALENT (FTE) - Equivalent of 2088 hours of work in a fiscal year.

FUNCTION - A group of related activities aimed at accomplishing a major service or regulatory program for which a government is responsible.

FUNCTION AND PROGRAM CODES - Codes assigned by an agency with the concurrence of the Office of Financial Management to identify an agency's functional areas and the various major activities within an agency. Refer to FUNCTION and PROGRAM.

FUND - For state purposes, a fund is referred to as an account. Refer to ACCOUNT.

FUND BALANCE - In governmental funds, this is the difference between fund assets and fund liabilities. Governmental fund balances should be segregated into reserved and unreserved amounts. Refer to RESERVED FUND BALANCE and UNRESERVED FUND BALANCE.

FUND CAPITAL ASSET - Capital assets recorded in proprietary and trust funds and used in the production of the goods or services provided or sold. Depreciation on fund capital assets is charged as an expense of the fund.

FUND EQUITY - The difference between a fund's assets and liabilities. In governmental funds, it is referred to as fund balance. In proprietary funds, it is referred to as net assets. Refer to FUND BALANCE and NET ASSETS.

FUND FINANCIAL STATEMENTS - Financial statements presented for the state's governmental, proprietary and fiduciary funds. They display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial statements for fiduciary funds. Each of the three fund categories is reported using the measurement focus and basis of accounting required for that category. Refer to GOVERNMENTAL FUNDS, PROPRIETARY FUNDS, and FIDUCIARY FUNDS.

FUND LONG-TERM OBLIGATIONS - Fund long-term obligations are directly related to and payable from proprietary and trust funds and are recorded in such funds. They are generally not expected to be paid within the next twelve months. Fund long-term obligations may be backed by a lien on a specific fund asset or by the full faith and credit of the state.

FUND TYPE (GAAP)- One of 11 classifications into which all individual accounts can be categorized. Governmental fund types include the general fund, special revenue funds, debt service funds, capital projects funds, and permanent funds. Proprietary fund types include enterprise funds and internal service funds. Fiduciary fund types include pension (and other employee benefit) trust funds, investment trust funds, private-purpose trust funds, and agency funds.

FUNDING TECHNIQUE - Procedures to minimize the time between the transfer of funds from the federal government and the payment of funds for program purposes by the state.

FURNISHINGS AND EQUIPMENT - Refer to EQUIPMENT.

GAAP - Refer to GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

GAAS - Refer to GENERALLY ACCEPTED AUDITING STANDARDS.

GAGAS - Refer to GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS.

GENERAL CAPITAL ASSETS - Used in operations of governmental funds that are not assets of any fund, but of the government as a whole. Most often, general capital assets are acquired through the expenditure of the financial resources of governmental funds. General capital assets include all capital assets not accounted for in proprietary funds. The state accounts for general capital assets in the General Capital Assets Subsidiary Account and reports them in the governmental activities column in the government-wide financial statement of net assets.

GENERAL CAPITAL ASSETS SUBSIDIARY ACCOUNT - A record keeping mechanism that provides a basis for accountability and control over the state's general capital assets.

GENERAL FUND - The general fund is used to account for the financial activities of the general government not required to be accounted for in another account. Refer to GOVERNMENTAL FUNDS.

GENERAL JOURNAL - The journal in which all entries not recorded in special journals are recorded.

GENERAL LEDGER - A ledger containing the accounts in which are recorded, in detail or in summary, all transactions of the state. Refer to CONTROL ACCOUNT and SUBSIDIARY ACCOUNTS.

GENERAL LEDGER CODE - The four-character numeric codes assigned by the Office of Financial Management to identify the titles of those accounts that classify, in summary form, all financial transactions of the state.

GENERAL LEDGER TRIAL BALANCE - Shows both the debit and credit general ledger balances for an account or related group of accounts at the close of an accounting period.

GENERAL LONG-TERM OBLIGATIONS - All long-term indebtedness of the state that is not classified as a fund obligation is accounted for as general long-term obligations. General long-term obligations are secured by the general credit and revenue raising capacity of the state and will not be paid by expending available resources as of the end of the current fiscal year. The state accounts for general long-term obligations in the General Long-Term Obligations Subsidiary Account and reports them in the governmental activities column in the Government-wide Financial Statement of Net Assets.

GENERAL LONG-TERM OBLIGATIONS SUBSIDIARY ACCOUNT - A record keeping mechanism that provides a basis for accountability and control over the state's long-term obligations other than those accounted for in proprietary and fiduciary funds.

GENERAL OBLIGATION BONDS - Statewide bond issues that are secured by an unconditional pledge of the full faith, credit and taxing power of the state.

GENERAL REVENUES - Revenues that are not matched to specific program expenses are required to be reported as general revenues.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - These are the uniform minimum standards for financial accounting and reporting. They govern the form and content of the financial statements of an entity. GAAP encompass the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time. They include not only broad guidelines of general application, but also detailed practices and procedures. The primary authoritative body on the application of GAAP to state and local governments is the Governmental Accounting Standards Board.

GENERALLY ACCEPTED AUDITING STANDARDS (GAAS) - These are the standards established by the AICPA for the conduct and reporting of financial audits. There are 10 basic GAAS, classed into three broad categories: general standards, standards of fieldwork and standards of reporting. The GAAS set forth the objectives of the audit and establish measures that can be applied to judge the quality of its performance.

GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS (GAGAS) - These standards are for the conduct and reporting of both financial and performance audits in the public sector. The basic GAGAS standards are classed into three broad categories: general standards, fieldwork standards, and reporting standards.

GHOST BILLING ACCOUNT - A cardless billing program offered by many charge card and credit card companies that is designed to primarily accommodate airline ticket purchases.

GOVERNMENTAL ACCOUNTING - The composite activity of analyzing, recording, summarizing, reporting, and interpreting the financial transactions of a governmental entity.

GOVERNMENTAL ACTIVITIES - Activities generally financed through taxes, intergovernmental revenues, and other nonexchange revenues. These activities are usually reported in governmental funds and internal service funds. Refer to GOVERNMENT-WIDE FINANCIAL STATEMENTS.

GOVERNMENTAL EXTERNAL INVESTMENT POOL - An arrangement that commingles (pools) the moneys of more than one legally separate entity and invests, on the participants' behalf, in an investment portfolio; one or more of the participants not being part of the sponsor's reporting entity. The sponsoring government reports the external investment pool in an Investment Trust Fund. Refer to INVESTMENT TRUST FUNDS.

GOVERNMENTAL FUNDS - Governmental funds are used to account for most typical governmental functions focusing on the acquisition, use, and balances of a state's expendable financial resources and the related current liabilities. The accounting for governmental funds has a budget orientation using the current financial resources measurement focus and the modified accrual basis of accounting. There are five types of governmental funds: General, Special Revenue, Debt Service, Capital Projects, and Permanent Funds. Refer to GENERAL FUND, SPECIAL REVENUE FUNDS, DEBT SERVICE FUNDS, CAPITAL PROJECTS FUNDS, and PERMANENT FUNDS.

GOVERNMENT-WIDE FINANCIAL STATEMENTS - Financial statements that incorporate all of the state's governmental and business-type activities, as well as its nonfiduciary component units. There are two basic government-wide financial statements: the Statement of Net Assets and the Statement of Activities. Both basic government-wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Refer to BUSINESS-TYPE ACTIVITIES and GOVERNMENTAL ACTIVITIES.

GRANTS - Awards of financial assistance, including cooperative agreements, in the form of money, or property in lieu of money, to an eligible grantee. The term does not include technical assistance which provides services instead of money, or other forms of assistance such as revenue sharing, loans, loan guarantees, interest subsidies, insurance or direct appropriations. Also, the term does not include assistance, such as fellowship or other lump sum awards, which the grantee is not required to account for. Refer to CAPITAL GRANTS and OPERATING GRANTS.

GUARANTEED RIDE HOME - Provision of an assured ride home for commuters participating in a commute trip reduction program who are not able to use their normal commute mode because of personal emergencies (Chapter 43.01 RCW).

HIGH COST LOCATIONS - Continental USA - Specific cities or areas within the continental USA as displayed in Subsection 10.90.10. Refer to CONTINENTAL USA.

HIGH COST LOCATIONS - Noncontinental USA and Foreign Travel - Specific cities or areas within the noncontinental USA and foreign nations or localities throughout the world as contained in Subsection 10.90.10. Refer to NONCONTINENTAL USA.

HISTORICAL COLLECTIONS - Refer to MUSEUM AND HISTORICAL COLLECTIONS.

HOSTING ACTIVITIES - Social rather than governmental business events, such as lobbying.

HOUSEHOLD GOODS - All household goods, personal effects and property used in a dwelling, and normal equipment and supplies used to maintain the dwelling.

IMPREST ACCOUNT - An account into which a fixed amount of money is placed for the purpose of making change or minor disbursements. As disbursements are made, a voucher is completed to record the date, amount, nature, and purpose of the disbursement. At periodic intervals, or when the money is completely expended, a report with substantiating vouchers is prepared and the account is replenished for the exact amount of the disbursements, and appropriate general ledger accounts are charged. The total of cash and the substantiating vouchers should always equal the total fixed amount of money set aside in the imprest account. Refer to CHANGE ACCOUNTS and PETTY CASH.

IMPROVEMENTS OTHER THAN BUILDINGS - Capital assets that reflect the cost of permanent improvements other than buildings which add value to land such as fences and retaining walls.

INCIDENTAL EXPENSES - Fees and tips given to porters, baggage carriers, hotel and restuarant staff, flight attendants, and others for personal services performed. This is not a miscellaneous expense. An allowance for incidental expenses is included within the daily subsistence rates for the area of travel.

INCOME STATEMENT - Refer to OPERATING STATEMENT; STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE; and STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS OR FUND EQUITY.

INDEPENDENT AUDIT - An audit performed by an independent auditor. Refer to FINANCIAL AUDIT, PERFORMANCE AUDIT, and INTERNAL AUDIT.

INDIRECT CHARGES - Refer to OVERHEAD.

INDIRECT COSTS - Costs that cannot be directly charged to an activity (e.g. depreciation and other administrative and support costs).

INEXHAUSTIBLE CAPITAL ASSETS - Refer to NON-DEPRECIABLE CAPITAL ASSETS.

INFORMATION TECHNOLOGY RELATED EQUIPMENT - Includes capitalized and non-capitalized assets such as equipment, software and products used in processing information, office automation and telecommunications.

INFRASTRUCTURE ASSETS - Long lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include roads, sidewalks, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems. With the exception of the state highway system and emergency airfields operated by the Department of Transportation, which use the modified approach to depreciation, infrastructure assets are to be depreciated.

IN-STATE TRAVEL - Travel within the state of Washington. However, with respect to the requirement for prior authorization of out-of-state travel in Subsection 10.10.50, travel to counties and/or cities in the states of Idaho and Oregon that are contiguous to the border between Washington-Idaho or Washington-Oregon shall not be considered out-of-state.

INTEGRAL PART OF THE MEETING - An activity within a meeting that is essential to the completeness of the meeting.

INTEREST PAYABLE - A liability account reflecting the amount of interest owed by the state. In governmental funds, interest is to be recognized as an expenditure in the accounting period in which it becomes due and payable and the liability is to be recorded as interest payable at that time. In proprietary and trust funds, interest payable is recorded as it accrues, regardless of when payment is actually due.

INTEREST RECEIVABLE - An asset account reflecting the amount of interest due to the state.

INTERFUND ACCOUNTS - Accounts in which activity between funds are reflected. Refer to INTERFUND ACTIVITY.

INTERFUND ACTIVITY - Activity between funds of the state, including blended component units. Interfund activities are divided into two broad categories: reciprocal and nonreciprocal. Reciprocal interfund activity is comprised of interfund loans and interfund services provided and used. Nonreciprocal interfund activity is comprised of interfund transfers and interfund reimbursements. Refer to INTERFUND LOANS, INTERFUND SERVICES PROVIDED AND USED, INTERFUND TRANSFERS AND INTERFUND REIMBURSEMENTS.

INTERFUND LOANS - Loans made by one fund to another with a requirement for repayment. Refer to INTERFUND ACTIVITY.

INTERFUND REIMBURSEMENTS - Repayments from the funds responsible for particular expenditures or expenses to the funds that initially paid for them. Refer to INTERFUND ACTIVITY.

INTERFUND SERVICES PROVIDED AND USED - Sales and purchases of goods and services between funds for a price approximating their external exchange value. Refer to INTERFUND ACTIVITY.

INTERFUND TRANSFERS - Nonreciprocal transfers made without a requirement for repayment. Refer to EQUITY TRANSFERS, OPERATING TRANSFERS, and INTERFUND ACTIVITY.

INTERGOVERNMENTAL REVENUES - Revenues from other governments in the form of grants, entitlements, shared revenues, or payments in lieu of taxes.

INTERIM FINANCIAL STATEMENT - A financial statement prepared before the end of the current fiscal period and covering only financial transactions during the period to date.

INTERNAL AUDIT - An appraisal activity conducted by auditors working for and within an organization of the diverse operations and controls within the organization to determine whether prescribed policies and procedures are followed, established standards are met, resources are used efficiently and economically, and the organization's objectives are being achieved.

INTERNAL CONTROL - A management process for keeping an entity (agency, board, commission, department, division, institution, or program) on course in achieving its organizational objectives. A management control system, including comprehensive internal controls, should provide reasonable assurance that entity objectives are being met.

INTERNAL CONTROL FRAMEWORK- An integrated set of policies and procedures designed to assist management to achieve its goals and objectives. To be truly comprehensive, a government's internal control framework must (a) provide a favorable control environment, (b) provide for the continuing assessment of risk, (c) provide for the design, implementation, and maintenance of effective control-related policies and procedures, (d) provide for the effective control-related policies and procedures, (d) provide for the effective communication of information, and (e) provide for the ongoing monitoring of the effectiveness of control-related policies and procedures as well as the resolution of potential problems identified by controls.

INTERNAL SERVICE FUNDS - Internal service funds are used to report activities that provide goods or services to other funds, departments or agencies of the state on a cost reimbursement basis. Internal service funds are used where the state is the predominant participant in the activity.

INVENTORY CONTROL POINT - A specific location, area, building, inventory type, etc., as defined in writing by the agency inventory officer where consumable inventories are aggregated for distribution, valuation, and/or reporting threshold purposes.

INVESTMENT IN CAPITAL ASSETS, NET OF RELATED DEBT - One of the three components of net assets reported in government-wide and proprietary fund financial statements. It is comprised of capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of capital assets of t