Budget Terminology Here are some of the key terms used in the Executive Budget Summary. — A — Agency Generally a state department, but for budgeting purposes the Legislature, Court System and University are also considered Agencies. Allocation A subunit of appropriations in appropriation bills. Allocations are expenditure guidelines for a stated purpose or program. Appropriation Statutory authorization to spend a specific amount of money for a stated purpose. Appropriations are often subdivided into allocations in the appropriations bill. Funds may not be spent without an appropriation made by law. Authorized Position Positions associated with the authorized budget. — B — Benchmark A standard for comparing results with other states or like entities. For example, regional or fifty-state averages, “top ten” ratings or nationally recommended performance levels. In the absence of appropriate comparables, the result in a prior “starting point” year or recent multi-year averages could be used. Budget A plan for allocating financial resources. Budget Amendment A revision to an agency’s budget involving a formal request to change the dollar amount, funding source, or scope of a project after the operating, capital, or mental health budgets have already been approved by the Governor and submitted to the Legislature. The Governor is required to deliver budget amendments to the Legislature by the 45th day of the legislative session; see the Budget Calendar for agency deadlines. Budget Dollars Dollars reported in thousands (e.g., 100.0 for 100,000). Budget Request Unit A group of program activities (called components) organized to achieve a specific goal. These typically correspond to divisions within a department. Also known as a Results Delivery Unit (RDU). Budget Year The fiscal year for which the Governor is preparing the Executive Budget, which begins July 1 and ends June 30. — C — Category A broad range of services historically provided by governments. The category areas for Alaska state budgeting purposes are: Education, University, Social Services/Housing, Health/Safety, Natural Resources, Administration of Justice, Public Protection, Development, Transportation and Public Support Technology/Service. Component (aka Allocation) A detailed budgetary level for a specific activity. One or more components will comprise a Results Delivery Unit (RDU). Constitutional Budget Reserve Fund (CBRF) Article IX, Section 17 of the Alaska Constitution, which became effective on January 2, 1991, established the CBRF as a separate fund in the state treasury, provided for deposit of proceeds of certain tax and mineral revenue disputes into the CBRF, established limitations on the legislature’s ability to appropriate money from the fund, and required that sums withdrawn from the fund be repaid. Contractual Services Services provided by a business, organization, or individual who is not a state employee such as: communication, printing, advertising, utilities, repairs, equipment rentals or lease/purchases, and professional services. Also includes services provided by one state agency to another such as finance services or data processing chargeback costs. Cost of Living Allowance Salary increases to reflect increases in the cost of living which are based on negotiations rather than merit or longevity. Current Position A position authorized for the current year. Current Year Authorized Funding for the current fiscal year as appropriated by the Legislature and adjusted by the Governor through vetoes and the allocation of any increases or decreases which were made on a statewide basis. — D — Department Highest level of the budget and appropriation structures. Designated Program Receipts Funds received by the state from a source other than the state or federal government that are restricted to a specific use by the terms of a gift, grant, bequest or contract. Duplicated Funds Money the legislature has limited discretion over such as interagency (I/A) receipts where one state agency pays another. — E — Equipment and Machinery The expenditure category for non-consumable equipment with an estimated life of more than one year and a unit value between $5,000 and $25,000. Expenditure Cash paid or to be paid for the purchase of an item or for a service performed. — F — Federal Receipts Funds received from the federal government to support state programs or projects. The Legislature appropriates federal funds along with other state funds. Fiscal Notes The fiscal impact of legislation that is attached to an appropriation bill. Fiscal Year The period of time over which the state budgets and accounts for funds. The state fiscal year begins on July 1 each year and ends on June 30 of the following year. Formula Program A program with specific eligibility standards which guarantees a specific level of benefits for any recipient who qualifies. The eligibility standards and benefits must be based in statute. Fund A separate accounting entity, maintained for a particular purpose, for which transactions are subject to legal or administrative restrictions. This term is distinguished from “funding” or “funds,” which usually refer to the amount of dollars contained in a fund. All funds are managed by the Division of Finance in the Department of Administration. Funding Sources The type of funds that support state government. The most common funding sources are: general fund, general fund match, federal receipts, program receipts, and interagency receipts. Funding sources are not the same as revenues generated by a program. Funds Generic term describing all funding sources which support state government and its activities. — G — General Fund The general fund is the state’s primary operating fund. It is used to account for all financial resources except those required to be accounted for in another fund. General Fund Match State monies that must be appropriated in order for the state to receive federal or other non-state receipts for a specific program or capital project. General Funds The overall category of funding sources that includes: General Fund Match, General Fund, General Fund/Program Receipts, and General Fund/Mental Health. General Fund/Mental Health A fund source used to track general funds appropriated for mental health programs. General Fund/Program Receipts Fees, charges, income earned on assets, and other state money received by a state agency in connection with the performance of specific functions, such as program fees that are accounted for within, and appropriated from, the general fund. Goals/Strategies A broad statement of a result an agency intends to achieve and the course of action which is designed to achieve that result. Grants/Claims Funds disbursed by the state directly to units of local government, non-profit corporations, and to individuals for specific purposes. Types of grants include Designated, Municipal, Named Recipient, Unincorporated, Competitive, Grants to Individuals, etc. — I — Indirect Costs Overhead expenditures which cannot be directly charged to the program providing services. Indirect costs represent administrative and support services an agency provides (such as budgeting, accounting and purchasing) to allow the direct delivery of services. Intent Language Narrative sometimes included in an appropriation bill, which expresses a legislative objective regarding the expenditure of an appropriation. Interagency Receipts Funds received from another state agency or from a separate appropriation within a state agency as a result of a contract for services that are beyond the expertise, capacity or function of the contracting agency. These contracts are called Reimbursable Service Agreements. Interagency receipts are a funding source for expenditures by the agency providing the service. Interagency Transfers Funds transferred to another state agency or between appropriations for payment of a service. Every interagency transfer should have a corresponding amount of interagency receipts budgeted in the receiving agency/component. Interagency transfers are an expenditure made to other state agencies as opposed to the private sector. Interagency transfers are not a funding source in a budget but simply indicate how budgeted funds will be spent. IRIS (Integrated Resource Information System) IRIS is the State of Alaska system for accounting, financial, procurement, payroll and human resource management. — K — Key Issues The most important challenges and changes facing the organization which may have budget implicatons. — L — Land/Buildings Proposed expenditures for acquisitions of or additions to land and buildings which will not exceed $25,000 per project. Language Section Narrative sections in the appropriation bills. These may include repeals, reappropriations, supplementals, amendments, miscellaneous appropriations, debt service, and fund capitalizations, as well as operating and capital appropriations. These are generally located after the Numbers section of the appropriations bills. Lapse The expiration of the authorization to spend funds. Operating appropriations lapse at the end of the fiscal year unless otherwise specified. Line Item Line Item Expenditure codes such as personal services (line 100), contractual (line 300) and grants (line 700) which are consistent with the state accounting system. — M — Maintenance of Effort Requirements A requirement by the federal government that the state continue funding certain programs at a certain level (usually the same funding level as in the current or a prior year) in order to receive federal funds. Mental Health Budget Operating and Capital appropriations related to the state’s integrated comprehensive mental health program under AS 37.14.003(a). Miscellaneous (and Debt Service) The line item used for expenditures that are not specifically covered by other line items. This includes state debt service payments and unallocated reductions or additions. Mission A short statement of the purpose, or reason for existence of an organization or program. — N — New Positions A new position is one that increases the total number of positions (called Position Control Numbers or PCNs) in a budget unit. When an existing PCN is simply transferred from another component, it is not counted as a new position. Nonpermanent Position, Normal A position occupied for a maximum of 120 calendar days in a 12-month period. Nonpermanent Position, Program or Project A position established with written commitment that employment will be limited to the duration of a specified program or project. Numbers Section The section in the appropriation bills that lists agencies’ appropriations and allocations. These normally do not have explanatory narrative and are for a specific dollar amount. See also Language Section. — O — Office of Management and Budget (OMB) The division within the Office of the Governor responsible for preparing the Governor’s budget. Operating Budget A plan for the yearly distribution of state resources for the ongoing operations of state programs. Operating budget appropriations are made for one fiscal year and any unexpended or unobligated funds lapse, i.e., revert to the fund from which they were appropriated, at the end of the fiscal year. — P — Performance Measure A measure of how well a particular result is being achieved. For example, percent of reports of harm to children investigated, reduction in the response time to emergencies, percentage increase in new jobs or business start-ups in a particular region during the past year. Permanent Full-Time (PFT) Position A continuing position to be filled 12 months a year with a normal work schedule of 30 or more hours per week. The only exception is for educational institutions, which operate 9 months per year. Permanent Part-Time (PPT) Position A continuing position to be filled 12 months a year with a normal work schedule of less than 30 hours per week. Permanent Seasonal Position A position required for less than 12 months each year. Seasonal positions are full-time or part-time, depending upon the number of hours worked within a week. Personal Services Proposed expenditures for staffing costs including salaries, overtime and benefits for all permanent and nonpermanent positions. Position An authorized job slot. Since a position may or may not be filled, a position is not equivalent to an employee. Position Control Number (PCN) A six or seven-digit alpha numeric code identifying a budgeted position. Project An activity with a specific purpose to be accomplished or built within a specific time period. There are projects in both the operating and capital budgets. Program Receipts Fees, charges, income earned on assets, and other state money received by a state agency in connection with the performance of specific functions, such as licensing fees. Unless otherwise provided by statute, program receipts are accounted for within, and appropriated from, the general fund. Proposed Budget The proposed operating, capital, and mental health appropriation bills submitted by the Governor by December 15th of each year per AS. 37.07.020(a). — R — Receipt Support Services A fund source for program receipts that are listed in statute as not being considered part of the general fund. Many of the programs that use this fund source are funded entirely from fees. Reimbursable Service Agreement (RSA) An agreement or contract between two state agencies (or between appropriations within one agency) where one agency provides a service and the other agency pays for the service. An RSA is allowed only when the requesting agency does not have the skills, expertise, or capability to carry out the necessary work or service. Restricted Revenue Anticipated state revenue that has been appropriated by the Legislature to pay for the same program that generated the revenue. Results Delivery Unit (RDU, aka Appropriation) A group of program activities (called components) organized to achieve a specific goal. These typically correspond to divisions within a department. Also known as a Budget Request Unit (BRU). Revenue Account An accounting code that ties revenues to specific funding sources. — S — State Funds All non-federal funds except the Permanent Fund and the Fish and Game Fund (which is dedicated within the limits set by Article IX, Section 7, of the Constitution). State funds encompass all general funds, including Mental Health Trust funds and program receipts, as well as funds established by statute. Supplemental An appropriation made by the Legislature to increase or decrease the operating or capital budget for the current fiscal year. Supplies and Materials Proposed expenditures to purchase items normally used within one year, or equipment costing less than $5000. Sweepable Funds A requirement by Article IX, Section 17(d) of the Alaska Constitution to sweep the funds in the general fund and sub-funds of the general fund that are available for appropriation at the end of each fiscal year into the Constitutional Budget Reserve Fund (CBRF). — U — Unrestricted Revenue Revenue accruing to the state which has not been appropriated by the Legislature for a specific program. The revenue is credited to a fund and may be used for any purpose permitted by the fund. — V — Vacancy Factor A budget adjustment to reduce the amount of personal services funding to account for the fact that an agency usually has some positions vacant for portions of the year.