ACCRUAL BASIS An accounting method where expenditures are recorded when good and services are received and where revenues are recorded when they are earned. It does not take into account when the payment was made or received.
ADMINISTRATION A functional grouping of County departments that provide select services to other County departments and offices, and to the general public.
ANNUAL APPROPRIATION BILL An Ordinance approved by the Cook County Board of Commissioners establishing the budget for Cook County government for the fiscal year.
ANNUAL BUDGET The financial plan for maintaining Cook County government for one 12-month period.
APPROPRIATION The legal authorization granted by the Cook County Board of Commissioners to make expenditures and to incur obligations for specific purposes. An appropriation is usually limited in amount and as to the time when it may be expended.
ASSESSED VALUATION The estimated value of all land and property in Cook County. The valuation is used as the basis for computing the Property Tax Levy.
BALANCED BUDGET A budget that has total revenues equal to total expenses.
BOND A written promise to pay a specified sum of money (called the face value or principal amount) at a specified date or dates in the future, called the maturity date(s), together with periodic interest at a specified rate.
BONDED DEBT The portion of indebtedness represented by outstanding bonds.
BUDGET The budget is an estimate of proposed expenditures and the proposed means of financing them.
BUDGETARY ACCOUNTS Accounts used to enter the formally adopted annual operating budget into the General Ledger.
BUDGETARY CONTROL The management of a government in accordance with an approved budget to monitor and control expenditures within the limitations of approved appropriations and available revenues.
BUREAU Organizational unit in which departments with related missions report to single executive such as Bureau Chief. Cook County has a Bureau of Administration, Bureau of Economic Development, Bureau of Finance, Bureau of Human Resources, Bureau of Technology, and Bureau of Asset Management.
BUSINESS UNIT (COST CENTER) The division of the County which may require an income statement or balance sheet. This is where all accounting transactions are recorded. For the purpose of recording expenses, these divisions were previously called sub-activities or cost centers.
CAPITAL BUDGET The estimate of capital project costs. It sets forth each project and equipment purchase, and specifies the resources estimated to be available to finance the projected expenditures.
CAPITAL EQUIPMENT Equipment items that have physical substance, valued at $1,000 or more with a useful life of three years or more and depreciable, such as: institutional equipment, office furnishings and equipment, computer equipment, vehicles, automotive equipment, telecommunications equipment, and other equipment.
CAPITAL EXPENDITURES Expenditures resulting in the acquisition of or addition to the County’s general fixed assets.
CAPITAL IMPROVEMENT Improvements or additions to fixed County assets and the acquisition of new County assets. Capital Improvements are detailed in a separate section of the budget and are financed through the direct issuance of general obligation bonds.
CAPITAL RENEWAL A systematic management process to plan and budget for known cyclic repair and replacement requirements that extend the life and retain usable condition of facilities and systems. Capital renewal is a planned investment program that ensures that facilities will function at levels commensurate with the facilities' mission. Included are major building and infrastructure systems and components that have a maintenance cycle in excess of one year.
CHARGEBACK A transaction used for the financing of goods or services provided by one department to other departments or agencies of a government, or to other governments to reimburse costs.
CHART OF ACCOUNTS A chart detailing the system (numbered and descriptive) of general ledger accounts used to designate funds, expenditures, revenues, and balance sheet accounts.
- Operating Accounts – Provide funding for the purchase of goods and services deemed necessary throughout the fiscal year excluding purchases categorized as Capital Outlay (See Object Classification).
- Capital Accounts (New/Replacement) – These funds provide financing for the purchase of capital equipment. Capital Equipment is defined as durable goods with a useful life of five or more years.
- Major Capital Accounts – These funds provide funding for certain projects with requirements and with a depreciable life of at least three (3) years.
- Major Lease of Capital Accounts - These funds provide funding for projects that would benefit from lease financing arrangements. Projects include the lease of the mainframe computer, mainframe printers, and large capacity document printers.
CORPORATE FUND The funds used to account for all financial resources attributable to government management and supporting services; control of environment; assessment, collection and distribution of taxes; election; economic and human development; and transportation.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) The official annual report stating the financial position and result of operations of Cook County for the fiscal year. It incorporates an opinion on the Report’s general-purpose financial statements by an independent certified public accounting firm.
COST-OF-LIVING-ALLOWANCE (COLA) A periodic adjustment to salaries and wages to allow for inflation.
DEBT An obligation resulting from the borrowing of money or from the purchase of goods and services.
DEBT SERVICE REQUIREMENTS The amount of money required to pay interest on outstanding debt, the principal of maturing bonds and required contributions to accumulate money to pay off term bonds.
DEFERRED MAINTENANCE The practice of postponing maintenance activities such as repairs on both real property (i.e. infrastructure) and personal property (i.e. equipment) in order to save costs, meet budget funding levels, or realign available budget monies. The failure to perform needed repairs could lead to asset deterioration and ultimately asset impairment. Generally, a policy of continued deferred maintenance may result in higher costs, asset failure, and in some cases, health and safety implications.
DEPARTMENT A unit of Cook County Government.
DEPRECIATION A reduction in the value of an asset with the passage of time.
DERIVATIVES A contract whose value is determined by performance of the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.
EMPLOYEE EXPENSES A sub-category of the Personal Services object classification. Employee expenses consist of expenditures that are related to employees, but not considered salary or fringe benefits. An example of an employee expense would be the cost of a training program or professional seminar.
ENCUMBRANCES Encumbrances represent the estimated amount of expenditures from unperformed contracts that would occur if the unperformed contracts in process are completed. Expenditures and liabilities, as defined by GAAP, are not encumbrances.
- GAAP - A set of accounting standards created by the Financial Accounting Standards Board to create financial consistency and transparency across organizations.
ENTERPRISE FUND Budget and accounting units created for particular self-sustaining operations, to separate the revenue and financial control of such operations from the County’s General Fund.
EQUALIZED ASSESSED The assessed value of real property, as determined by the Cook County Assessor, multiplied by an annual equalization factor determined for the County by the Illinois Department of Revenue. The Assessed Valuation is the basis for levying property taxes.
EXPENDITURE Any use of financial resources by Cook County for the provision or acquisition of goods and services for operations, debt service, capital outlay, transfers, or other financial uses.
FISCAL YEAR A 12-month period for which the Annual Appropriation Bill is enacted. For Cook County, the fiscal year begins on December 1 and ends on November 30 of the succeeding year.
FRINGE BENEFITS Personnel costs (hospitalization insurance, dental insurance, vision insurance, life insurance, employer match of employee’s Medicare contribution, and pension) supplemental to an employee’s salary or wages which are paid wholly or in part by the County.
FULL TIME EQUIVALENT (FTE) A position converted to the decimal equivalent of a full-time position based on 2,080 hours per year. A full-time position would be 1.0 FTE while a part-time position scheduled for a 20-hour week would be 0.5 FTE.
FUNCTION Specific (or like group) activities or organizational units directed at attaining specific purposes or objectives. The principal functions of Cook County are health care, courts, and corrections.
FUND (COMPANY) An independent, self-balancing account used to record revenue and expenditures within the budget. For Cook County, the major funds are the General Fund, comprised of Corporate and Public Safety, the Health Enterprise Fund, special purpose funds, and grant funds.
FUND BALANCE The difference between assets and liabilities of governmental funds.
- Enterprise - Budget and accounting units created for particular purposes, particularly self-sustaining operations, to separate the revenue and financial control of such operations from the General Fund.
- General Fund Fiduciary - Funds that are used to account for assets held in trust by the Cook County Government for the benefit of individuals or other entities.
- Governmental - Funds that are not concerned with profitability and usually rely upon a modified accrual basis. This involves recognizing revenue when it becomes both available and measurable, rather than when it is earned.
- Major - Local governments often manage and account for their financial activities in a limited number of funds, designated as major funds.
- Special Revenue - Fund types that are required to account for the use of revenue earmarked by the law for a particular purpose.
GENERAL FUNDS The funds used to account for all financial resources, except those accounted for in special purpose funds and enterprise funds. The General Fund consists of the Corporate and Public Safety Funds.
GENERAL OBLIGATION DEBT Debt backed by the full faith and credit of Cook County Government.
GENERAL PUBLIC The individuals that Cook County serves.
GRANTS Contributions of cash or other assets from another government, public or private foundation, or department to be used for a specified purpose, activity, or facility.
GROSS BONDED DEBT The total amount of direct debt that is composed of outstanding bonds.
HOME RULE COUNTY A county that has authority to exercise any power and perform any function pertaining to its government and affairs including; but not limited to, the power to regulate for the protection of the public health, safety, morals, and welfare; to license; to tax; and to incur debt.
INFRASTRUCTURE Public domain fixed assets such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and similar assets that are immovable.
INSURANCE The transfer of risk of loss from one party (the insured) to another party (the insurer) in which the insurer promises to pay the insured (or others on the insured’s behalf) an amount of money for economic losses sustained from specific events.
INTERGOVERNMENTAL REVENUES Revenues from other governments (federal, state, and local) in the form of grants, entitlements, or shared revenues.
INVESTMENTS Securities and real estate held for income in the form of interest, dividends, rentals, or lease payments.
LEASE-PURCHASE AGREEMENTS Contractual agreements that are termed leases; but that in substance are purchase contracts.
LEVEL OF SERVICE Used generally to define the current services, programs, activities, and/or facilities provided by a government to its residents.
LINE-ITEM BUDGET The presentation of the County’s budget in a form which lists each expense in a separate line along with the dollar amount budgeted.
LONG-TERM DEBT Any obligation of the County with a remaining maturity term of more than one year.
MAJOR CAPITAL EQUIPMENT Certain equipment items involved in projects with funding requirements greater than $1,000,000 and with a depreciable life of greater than three (3) years.
NON-RECURRING REVENUES Revenues collected by to the County that are unique and occur at one time only, or follow a sporadic, unpredictable pattern.
OBJECT CLASSIFICATION The categorization of expenditures grouped by similarity of purpose. For Cook County, the following object classifications are used:
- Personal Services - Include expenditures for salaries and wages, fringe benefits, and other costs directly related to the support of employees. All budgetary accounts 100 through 199 are included in this object classification.
- Contractual Services - Include expenditures for routine office/department activities; such as, printing, transportation, communications and other purchased services. Also included in this classification are all professional and technical services contracted by Cook County. All budgetary accounts 200 through 299 are included in this object classification.
- Supplies and Materials - Include expenditures for necessary supplies for each department. All budgetary accounts 300 through 399 are included in this object classification.
- Operation and Maintenance - Includes expenditures for routine operation and maintenance, such as utility costs and repair of equipment. All budgetary accounts 400 through 499 are included in this object classification.
- Capital Outlay - Includes expenditures for the acquisition of fixed assets including land, buildings and equipment. All budgetary accounts 500 through 599 are included in this object classification. Rental and Leasing - Includes expenditures for the rental and leasing of office, automotive, medical equipment, and facilities. All budgetary accounts 600 through 699 are included in this object classification.
- Contingency and Special Purpose Appropriations - Include various unanticipated and estimated expenditures, and reserves. All budgetary accounts 800 through 899 are included in this object classification.
OBJECT ACCOUNT The numeric system that uniquely distinguishes each account in the County’s Chart of Accounts.
OFFICE A unit of Cook County Government. Offices are generally managed by elected County officials. However, the term is also used to designate some non-elective units of Cook County Government.
OPERATING BUDGET The primary means by which most of the financing, acquisition, spending, and service delivery activities of a government are controlled. The Operating Budget excludes capital improvements.
PERFORMANCE-BASED BUDGETING Performance-based budgeting uses statements of missions, goals and objectives to explain why the money is being spent. It is a way to allocate resources to achieve specific objectives based on program goals and measured results.
PUBLIC SAFETY FUND The funds used to account for all financial resources attributable to the protection of persons and property (corrections and courts), to include the costs of administering laws related to vehicles and transportation; and government management and supporting services related to ensuring public health and safety in postmortem examinations.
PROGRAM The functional units of a County Department or Agency focused on particular objectives and further delineated with employee and cost data specific to that function.
PROGRAM INVENTORY A comprehensive listing of services offered by each Cook County Agency or Department to both external and internal users; organized to provide transparency into Cook County governmental services provided to Cook County residents, employees and elected officials.
RESERVED FUND BALANCE Those portions of fund balance that cannot be used for expenditure or that are legally restricted for a specific future use.
REVENUE The amount of monies collected from taxes, fines, fees, and reimbursements from others for the purpose of financing governmental operations and services.
REVISED REQUEST A modification to a department’s initial request, as deemed necessary, by a department, in conjunction with Budget and Management Services.
RISK MANAGEMENT Use of the various ways and means to avoid accidental loss, or to reduce its consequences if it does occur.
SPECIAL PURPOSE FUNDS These funds are used to account for the proceeds from special revenue sources, and the expenditures for specified or restricted purposes.
STAR Set Targets. Achieve Results. STAR is President Preckwinkle's Performance Management Initiative for Cook County. STAR is a partnership of the Board of Commissioners, County Agencies, employees, union representatives, and residents. All offices and agencies of the County report progress toward stated goals, and work together to improve performance.
TAX EXTENSION The process of calculating tax rates for all local governments.
TAX LEVY The total dollar amount of the Cook County Annual Appropriation Bill that is to be covered by property taxes.
TAX RATE The rate calculated to generate the revenue required from the tax levy. For Cook County, the rate is determined by dividing the final tax levy by the total Equalized Assessed Valuation of County property.
TURNOVER ADJUSTMENT The amount used to adjust the projected spending in salaries to account for the decrease in expenditures resulting from vacated positions.
ZERO-BASED BUDGETING A budgeting approach which breaks down service delivery functions into meaningful identifiable unit costs. Resources are allocated based on the fundamental level of service and budget priorities.