This section contains the definition of terms used in this website and other terms necessary to understand accounting procedures for school districts. Several terms that are not accounting terms have been included because of their significance to school district accounting. The glossary is arranged alphabetically with appropriate cross reference where necessary. Many of the definitions have been taken from the recommendations of the Governmental Accounting Standards Board. Others have been taken from Financial Accounting for Local and State School Systems, 1990 released by the U.S. Department of Education and the 1988 Governmental Accounting, Auditing, and Financial Reporting (GAAFR) released by the Government Finance Officers Association (GFOA).

Accrual Basis of Accounting – A method of accounting that recognizes the financial effects on a school district of transactions, interfund activities, and other events and circumstances under which revenues are recorded in the period in which they occur regardless of the timing of the cash flows.

Activity – A specific and distinguishable service performed by a school district in order to accomplish a function for which the school district is responsible (e.g., supervision, teaching, insurance).

Actuarial Basis – A basis used in computing the amount of contributions to be made periodically to a fund or account so that the total contribution plus the compounded earnings thereon will equal the required payments to be made out of the fund or account. The factors considered in arriving at the amount of these contributions include the length of time over which each contribution is to be held and the rate of return compounded on such contribution over its life. A pension trust fund for PERS is an example of a fund concerned with actuarial basis date. (SGAS25.)

Administration – Those activities which have as their purpose the general regulation direction and control of the affairs of the school district that are system wide and not confined to one school, subject, or narrow phase of school activity.

Amortization – Gradual reduction of an amount owed according to a specified schedule of times and amounts.

Appropriation – Maximum expenditure authorization during a given fiscal period (RCW 28A.505.010).

Assessed Valuation (AV) – A valuation set upon real estate or other property by a government as a basis for levying taxes. Assessed valuation is based on 100 percent of true and fair value in the state of Washington.

Associated Student Body (ASB) – WAC 392-138- 010 provides the following definition: “a formal organization of students, including subcomponents or affiliated student groups such as student clubs, which is formed with the approval, and operated subject to the control, of the board of directors of a school district.”

Average Annual FTE Enrollment – An average computed from the actual full-time equivalent enrollments reported by districts for each of nine months, effective on the state prescribed count days of each month running from September through May.

Bond – A written promise, generally under seal, to pay a specified sum of money, called the face value, at a specified date or dates in the future, called the date of maturity, and carrying interest at a fixed rate, usually payable periodically. The difference between a note and a bond is that the latter usually runs for a longer period of time and requires greater legal formality.

Bonds, Refunding – Bonds issued to retire bonds already outstanding. The refunding bonds may be used to provide the resources for redeeming outstanding bonds, or the refunding bonds may be exchanged with the holders of the outstanding bonds.

Bonds, Serial – Bonds, the principal of which is repaid in periodic installments over the life of the issue.

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. In document form it is presented by the budget- making authority to the appropriating body.

Budget Control – The control or management of the school district in accordance with an approved budget with a view toward keeping expenditures within the authorized amounts.

Building – A fixed asset account that reflects the acquisition value of permanent structures used to house persons and property owned by a school district. If buildings are purchased or constructed, this account includes the purchase and contract price of all permanent buildings and fixtures attached to and forming a permanent part of such buildings.

These items would include but not be restricted to the plumbing, heating, ventilating, mechanical and electrical work, and other fixtures. Note that when two structures are connected by a breezeway, a covered walkway, or tunnel they would be considered two buildings. Buildings are valued at acquisition cost or, if a gift, at the fair market value at the time of acquisition.

Capital Assets – Land, improvements to land, ease- ments, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infra- structure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period. (SGAS 34.)

Capital Outlay – An expenditure that results in the acquisition of fixed assets or additions to fixed assets. It is an expenditure for land or existing buildings, improvement of grounds, construction of buildings, additions to buildings, remodeling of buildings, and equipment. Includes installment of lease payments on property (except interest) that have a terminal date and result in the acquisition of property.

Career and Technical Education (CTE) – CTE programs in Washington are aligned with rigorous industry and academic standards. Teachers participate in professional development on curricula and instruction, standards and assessment, and academic integration. Program partnerships and advisories communicate this vision with business and industry partners. Such programs meet the demands of the new economy.

Compensatory Education – Education programs that are designed to be a program of supplementary instruction and as such are not intended to provide the primary instruction.

Consumer Price Index (CPI) – This program produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services.

Cost of Living Adjustment (COLA) – Since 1975, Social Security’s general benefit increases have been based on increases in the cost of living, as measured by the Consumer Price Index. These increases are called Cost Of Living Adjustments, or COLAs.

Debt Service – Expenditures for the retirement of debt principal and interest.

Benefit Plan – A plan having terms that specify the amount of benefits to be provided at or after separation from employment. The benefits may be specified in dollars (for example, a flat dollar payment or an amount based on one or more factors such as age, years of service, and compensation), or as type or level of coverage (for example, prescription drugs or a percentage of healthcare insurance premiums). (SGAS 43.)

Educational Service District (ESD) – In Washington state, there are 9 Educational Service Districts (ESDs) that oversee a total of 295 school districts.

Employment Benefits – Expenditures of the school system made on behalf of employees; these amounts are not included in the gross salary, but are in addition to gross salary. They are fringe benefits, and while not paid directly to employees, nevertheless are part of the expenditure total of salaries and benefits.

Examples are (1) group health or life insurance, (2) contributions to employee retirement, (3) social security, and (4) workers’ compensation. Employee benefits are recorded as Object 4 in expenditure coding.

Encumbrances – Purchase orders, contracts and salary or other commitments that are chargeable to an appropriation and for which a part of the appropriation is restricted. They cease to be encumbrances when paid or when an actual liability is set up. Encumbrances are recorded in General Ledger Account 520. Use of encumbrances is not required by GAAP. (NCGA Statement 1.)

English Language Arts (ELA) – English language arts includes reading, writing, speaking, listening and visual literacy.

English Language Learners (ELL) – The term ELL (English Language Learner) is applied to students whose primary language is other than English.

These students may have a current proficiency level in English that qualifies them for additional language support through the Washington State Transitional Bilingual Instructional Program (TBIP). The goal of the ELL Program is to assist students in developing their English language proficiency and grade-level content knowledge at the same time.

Equipment – Tangible property of a more or less permanent nature (other than land, buildings, or improvements other than buildings) which is useful in carrying on operations. Examples are machinery, tools, trucks, cars, furniture, and furnishings.

Expenditure – Under the current financial resources measurement focus, decreases in net financial resources not properly classified as other financing uses. Where the accounts are kept on the cash basis, the term designates only actual cash disbursements for these purposes.

Fiscal Period – Any period at the end of which an entity determines its financial condition and the results of its operations and closes it books. It is usually a year, though not necessarily a calendar year. The fiscal period for school districts is September 1 through August 31.

Free/Reduced Lunch Status (FRL) – The National School Lunch Program is a federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. It provides nutritionally balanced, low-cost or free lunches to children each school day.

Full-Time Equivalent (FTE) – The amount of employed time required in a part-time position expressed in proportion to that required in a full-time position, with “1” representing one full-time position. It may be expressed as a percentage or as a fraction. It is derived by dividing the amount of employed time required in the part-time position by the amount of employed time required in a corresponding full-time position.

Full-Time Equivalent Student – Each individual student who is enrolled full time in each of the prescribed count days for the school months running from September through June. To be full time, a student must be enrolled to attend school for a given number of minutes each day. Form SPI P-223 provides the minimum qualifying time by category of students such as kindergarten, elementary, and secondary.

Fund – An independent fiscal and accounting entity with a self-balancing set of accounts recording cash and/or other resources together with all related liabilities, obligations, restrictions, and equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

Fund, Associated Student Body – The fund used to account for student activities that are (1) conducted in whole or in part on behalf of an associated student body during or outside regular school hours and within or outside school grounds and facilities and conducted with the approval and at the direction or under the supervision of the school

Fund Balance, Assigned – An account used to segregate a portion of fund balance which is marked for an intended, specific use by management or the board of directors. These amounts are not legally restricted nor do they represent a formal commitment on behalf of management or the board of directors. For funds other than the General Fund, these amounts also represent the excess of the assets of the fund over its liabilities, restrictions, commitments and are in spendable form.

Fund Balance, Committed – An account used to segregate a portion of fund balance which has been committed to a specific purpose by a resolution of the board of directors of a school district. Once committed, these amounts cannot be used for another purpose without a resolution passed by the board of directors to end the commitment.

Fund Balance, Nonspendable – An account used to segregate that portion of fund balance which is represented by assets that are not in a spendable form, such as inventories, prepaid items, or trust principal that is required to be maintained intact.

Fund Balance, Restricted – An account used to segregate a portion of fund balance which is legally restricted for a specific use.

Fund Balance, Unassigned – In the General Fund, the excess of the fund assets over its liabilities and restricted, committed, and assigned fund balance accounts. In all other funds, the deficit of a fund’s liabilities, restrictions and commitments over it assets.

Fund, Capital Projects – This fund is used to account for all monies and resources set aside for the acquisition of fixed assets through construction and remodeling projects.

Fund, Classifications – One of three categories (govern- mental, proprietary, and fiduciary) used to classify fund types.

Fund, Debt Service – The fund that is used to account for the redemption of outstanding bonds and the payment of interest incurred by the bonds.

Fund, General – The fund that is available for any legally authorized purpose and which is therefore used to account for all revenues and all activities not provided for in other funds. The general fund is used to finance the ordinary operations of a school system.

Vehicle Transportation Fund– The fund used to account for expenditures for the purchase, major repair, rebuilding, and related debit service incurred for pupil transportation equipment.

Funds, Governmental – These funds track the finances of a district’s basic services and are reported in the dis- trict wide financial statements; they are reported using the current financial resources measurement focus and modified accrual basis of accounting, and include the general, special revenue, debt service, capital projects, and associated study body.

Generally Accepted Accounting Principles (GAAP) - Uniform minimum standards of and guidelines to financial accounting and reporting. They govern the form and content of the basic 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. GAAP provide a standard by which to measure financial presentations. The primary authoritative statement on the application of GAAP to state and local governments is GASB Statement 1. Every government should strive to prepare and publish financial statements in conformity with GAAP. The objectives of governmental GAAP financial reports are different from, and much broader than, the objectives of business enterprise GAAP financial reports.

Improvements – An addition made to, or change made in, a capital asset, other than maintenance, to prolong its life or to increase its efficiency or capacity. The cost of the addition or change is added to the book value of the asset. Improvements are charged to Object of Expenditure 9 or are accounted for in the capital projects fund. Expenditures which do not meet these requirements are considered maintenance and are shown as an expenditure in the current fiscal period.

Individualized Education Program (IEP) – A written document that includes (1) a statement of the student’s present level of functioning, (2) a statement of annual goals and short-term objectives for achieving those goals, (3) a statement of services to be provided and the extent of regular programming, (4) the starting date and expected duration of services, and (5) evaluation procedures and criteria for monitoring progress.

Information Technology (IT) – The technology involving the development, maintenance, and use of computer systems, software, and networks for the processing and distribution of data.

Instruction – Instruction includes the activities administered or supervised by a certified teacher dealing directly with the teaching of pupils. Teaching may be provided for pupils in a school classroom, in another location such as in a home or hospital, and other learning situations such as those involving co-curricular activities. It may also be provided through some other approved medium such as television, radio, telephone, and correspondence.

Instructional Material – Any devices, content materials, methods, or experiences used for teaching and learning purposes. These include printed and nonprinted sensory materials.

Internal Control – A process, adopted by a school district’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

  • Effectiveness and efficiency of operations
  • Reliability of financial reporting
  • Compliance with applicable laws and regulations

Land – A fixed asset account that reflects the acquisition value of land owned by a school system. If land is purchased, this account includes the purchase price and expenditures such as legal fees, filing and excavation, and other associated improvement expenditures that are incurred to put the land in condition for its intended use. If land is acquired by gift, the account reflects its appraised value at time of acquisition.

Learning Assistance Program (LAP) – This program offers supplemental services for K–12 students scoring below grade-level standard in English language arts (ELA) and mathematics. These services focus on accelerating student growth to make progress towards grade level. They may include academic readiness, skill development or behavior supports. These services address barriers preventing students from accessing core instruction.

Legal Debt Margin – The excess if the amount of debt legally authorized over the amount of debt outstanding.


(1) To impose taxes or special assessments or

(2) the total of taxes or special assessments imposed by a governmental unit. There are four types of school district levies: excess general fund levies (also known as maintenance and operations levies); debt services levies; transportation vehicle fund levies; and capital project fund or technology levies.

Local Government Investment Pool (LGIP) – The Local Government Investment Pool (LGIP) is a voluntary investment vehicle operated by the State Treasurer. Over 530 local governments have participated in the pool since it was started in 1986 to provide safe, liquid, and competitive investment options for local government pursuant to RCW 43.250.

Local Effort Assistance (LEA) – RCW 28A.500.010 says commencing with calendar year 2000, in addition to a school district’s other general fund allocations, each eligible district shall be provided local effort assistance funds. The purpose of these funds is to mitigate the effect that above average property tax rates might have on the ability of a school district to raise local revenues to supplement the state’s basic program of education. These funds serve to equalize the property tax rates that individual taxpayers would pay for such levies and to provide tax relief to taxpayers in high tax rate school districts. Such funds are not part of the district’s basic education allocation.

Machinery and Equipment – Property that does not lose its identity when removed from its location and is not changed materially or consumed immediately (e.g., within one year) by use.

Maintenance – (Plant Repairs and Repairs and Replacement of Equipment) – The act of keeping capital assets in a state of good repair. It includes preventive maintenance, normal periodic repairs, replacement of parts or structural components, and other activities needed to maintain the asset so that it continues to provide normal services and achieves its optimum life.

Mandate – A legal requirement that a jurisdiction provide a specific service, sometimes at a specific level.

Materials, Supplies and Other Costs (MSOC) – State allocation for non-salary related costs including technology, utilities and insurance, curriculum and textbooks, facilities maintenance, instructional professional development and other supplies.

Measure – A numerical expression documenting the quality, quantity or impact of a resource, process or product.

Net General Obligations Debt – General obligation debt reduced by the amount of any accumulated resources restricted to repaying the principal of such debt. (SAGS44.)

Object – As applied to expenditures, this term has reference to an article or service purchased; for example, salaries, supplies, contractual services or equipment.

Office of Superintendent of Public Instruction (OSPI)– The Office of Superintendent of Public Instruction (OSPI) is the primary agency charged with overseeing K-12 public education in Washington state.

Other Comprehensive Basis of Accounting (OCBOA) – Financial statements prepared using a system of ac- counting that differs from Generally Accepted Ac- counting Principles (GAAP). School districts issue GAAP financial statements except that the General Fixed Asset Group, districtwide financial statements and the original budget are not reported; debt is reported in the notes to the financial statements; and management’s discussion and analysis are not required.

Other Financing Sources – The face value of the governmental fund general long –term debt. Amount equal to the present value of the minimum lease payments arising from capital leases, sales of general fixed assets, and operation transfers in. Such amounts are classified separately from revenues on the governmental operating statement.

Other Financing Uses – Governmental fund transfers to other funds and the amount of refunding bond proceeds deposited with the escrow agent. Such amounts are classified separately from expenditures on the governmental operation statement.

Other Post-employment Benefits (OPEB) – Post- employment benefits provided by an employer to plan participants, beneficiaries, and covered dependents through a plan or other arrangement that is separate from a plan to provide retirement income. OPEB includes post-employment health care benefits provided through a public employee retirement system or pension plan. In addition to the post-employment health care benefits (such as illness, dental, vision and hearing), OPEB may include such benefits as life insurance, disability income, tuition assistance, legal services, and other assistance programs. (SGAS12.)

Paraeducator – A person who performs activities of a non-teaching nature who are not classified as educational professionals, but who assist a staff member to perform professional educational teaching assignments.

Personnel-Administrative – Personnel on the school payroll who are primarily engaged in activities that have as their purpose the general regulation, direction, and control of the affairs of the school district that are system wide and not confined to one school, subject, or narrow phase of school activity; for example, superintendent of schools, business manager, and accountant.

Personnel-Certificated – Employees such as teachers, principals, counselors, and other who serve in positions covered under the continuing contract law that hold a professional education certificate issued by OSPI and are employed by a school district in positions for which such certificate is required by statute, rule of the State Board of Education, or written policy or practice of the employing district. Expenditures for certificated substitutes and extended contract and stipend expenditures for certificated employees are included in certificated personnel expenditures. (WAC 392-121-200.)

Personnel –Classified – Employees such as attorneys, accountants, architects, secretaries, clerks, instructional assistants, custodians, food service workers, and other supervisory, professional, technical, office, craft and others who do not hold a professional education certificate issued by OSPI or are employed by the district in positions which do not require such a certificate. It is possible for an individual to hold a valid certificate, be serving in a classified position, and be paid as a classified person.

Personnel-Full-Time – Certificated employees who work the full number of days are under local standard contract (assuming state minimum length of contract) or classified employees who work 2,080 hours or more per year.

Personnel-Instructional – Those who render direct and personal services which are in the nature of teaching or the improvement of the teaching-learning situation. Included are consultants or supervisors of instruction, principals, teachers (including teachers of homebound), guidance personnel, librarians, and psychological personnel. Attendance personnel, health personnel, and their clerical personnel should not be included as instructional personnel.

Personnel-Maintenance – Personnel on the school payroll who are primarily engaged in keeping the physical plant open and ready for use. Included are personnel engaged in cleaning, disinfecting, heating, moving furniture, caring for grounds, and other such work, except repairing, which is repeated somewhat regularly-daily, weekly, monthly, or seasonally.

Professional Learning Community (PLC) – An ongoing process through which teachers and administrators work collaboratively to seek and share learning in order to achieve better results for the students they serve.

Program – A plan of activities designed to accomplish a set of objectives. Educational programs consist of activities of a school district that are directly involved in the instruction and education of students. Supportive service programs consist of activities of a school district that support the educational programs.

Public Employee Retirement System (PERS) – State or local governmental entity entrusted with administering one or more pension plans; it also may administer other post-employment benefit plans and deferred compensation plans (SGAS 25).

Pupil Transportation Services – Consists of those activities involved with the conveyance of pupils to and from school activities as provided by state law. Includes trips between home and school or trips to school activities.

Purchase Order (PO) – A document that authorizes a vendor to deliver described merchandise or render services at a specified price.

Real Property – Real property generally encompasses land, land improvements, buildings, and equipment that is integrated and firmly attached. For example, a building’s HVAC system would be real property (integrated into the building), but a window-mounted air conditioner would not be considered real property.

Smarter Balanced Assessment (SBA) – This is an end-of-year assessment to measure what students know and how much they’ve improved in English language arts and math for grades 3 to 8 and high school.

Special Education – Special Education means the specifically designed instruction provided to an eligible student as defined in Chapter 392-172A WAC. Specially designated instruction shall be provided at no cost to the parents, in conformance with the student’s individualized education program, and designed to meet the unique needs of the student. Specially designed instruction includes instruction conducted in the classrooms, in the home, in hospitals and institutions and in other settings, and instruction in physical education.

Strategic Plan – A long range (at least 3-5 years) statement of direction for an organization, which identifies vision, mission, goals and strategies, as well as measure which will show progress made in achieving goals.

Student Body Activities – Direct and personal services for public school pupils, such as interscholastic athletics, entertainments, publications, clubs, bands, and orchestras, that are managed or operated by the student body under the guidance and direction of adults, and are not part of the regular instructional program.

Tax Rate – The amount of tax stated in terms of a unit of the tax base; for example, $1.75 per thousand dollars of assessed valuation.

b– The maximum rate or amount of general property tax that a local government may levy.

Teacher on Special Assignment (TOSA) – Teacher on Special Assignment or Teacher Specialist is the term used to describe a licensed teacher who has been assigned to perform duties other than classroom instruction.

Washington Administrative Code (WAC) – Regulations of executive branch agencies are issued by authority of statutes. Like legislation and the Constitution, regulations are a source of primary law in Washington State. The WAC codifies the regulations and arranges them by subject or agency.

Washington Comprehensive Assessment of Science (WCAS) – This is an assessment to measure what students know and how much they’ve improved in science for grades 5, 8 and 11.