Operating and CIP Budget Fiscal Year 2015-16

Glossary (continued)

Assets Property owned by the City which has monetary value.

 CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16 OPERATING AND CIP CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY15-16  OPERATING AND CIP BUDGET  CITY Audit A systematic examination of the City’s financial records and processes which concludes in a written financial report. It includes test of management’s internal accounting controls and is intended to: 1. ascertain whether financial statements fairly present financial positions and results of opera- tions; 2. test whether transactions have been legally performed; and, 3. identify areas for possible improvements in accounting practices and procedures Balance Sheet A statement which presents the financial position of an entity by disclosing its assets, liabilities, and fund equities as of a specific date. BMR Below Market Rate Bond Debt (Debt Instrument) A written promise to pay (debt) a specified sum of money (called principal or face value) at a specified future date (called the maturity date) along with periodic interest paid at a specified percentage of the principal (interest rate). Bonds are typically used for long-term debt to pay for specific capital expenditures. Budgetary Basis of Accounting Morgan Hill budgets using the modified accrual basis plus encumbrances. 1. Under ‘modified accrual” amounts are recognized as revenue when earned, only so long as they are collectible within the period or soon enough afterwards to be used to pay liabilities of the cur- rent period. 2. Encumbrances outstanding at year-end are reappropriated in the next year and reported as reser- vations of fund balance. Budget (Operating) A plan of financial operation listing an estimate of proposed expenditures (appropriations) for a given period (typically a fiscal year) and the proposed means of financing them (revenue estimates).

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