Glossary of Budget Terms

This page supplies a brief glossary of budgetary terminology focusing on the various levels of budgetary outcomes. For the construction of the glossary, True's codebook for U.S. budgetary authority as well as the OECD's definitions of budgetary terms were consulted. Since budgetary terminology differs vastly among political entities, a basic definition of terms is provided. The entries are ordered alphabetically.

• Appropriations: Provisions of law that sets aside funds for a specific obligation and expenditure. Appropriations are available for obligation for either a single specific fiscal year or multiple fiscal years.
• Budget: A financial plan for collecting and allocating resources for a definite period of time. A national budget often contains actual figures for a certain period of past fiscal years, as well as an estimate of the current and coming years.
• Budget Authority: Legal authority to obligate the government to make immediate or future payments or outlays. It is the authority to incur financial obligations that will result in outlays, usually provided in specific amounts and for specific periods. Agencies legally may incur obligations only when they have been granted authority to do so by law.
• Discretionary Spending: A category of budget authority or outlays that is usually provided in annual appropriations acts and that excludes mandatory spending. This form of spending is basically optional.
• Fiscal Year: A government's accounting period.
• Functions: A categorization of financial activities that have similar purposes addressing an important and continuing need. The categorization is usually based on a detailed accounting scheme that provides exhaustive and mutually exclusive categories.
• Mandatory Spending: Funds are automatically obligated by virtue of previously-enacted laws. This form of spending is authorized by a permanent law and not an annual appropriations act. Often it describes a category of budget authority and outlays provided for in entitlement authority.
• Outlays: Payments made to liquidate obligations. It is the opposite of revenues. As True notes, "there is an additional analytical problem in that outlays in many areas will lag budget authority by a substantial period of time. Outlays are often referred to as expenditures and sometimes as spending. “Expenditures” almost always referred to outlays, but “spending” has been used to refer to budget authority, obligations, or outlays."
• Revenues: The yield of sources of income (such as as taxes) that a political entity collects and receives.
• Subfunctions: Budget functions are subdivided into one or more subfunctions. Subfunctions are generally composed of various programs and non-programmatic elements.