Definitions of Key Terms and Abbreviations

A reference guide to understanding financial, governmental, and regulatory terminology used in these reports

Financial and Accounting Terms

Appropriations

Legal authorization granted by the City Council to spend public funds for specific purposes. Exceeding appropriations without proper authorization is illegal under Oregon law.

Audit Opinion

An auditor's professional judgment about whether financial statements are presented fairly and in accordance with accounting standards. Types include: unmodified (clean), qualified, adverse, or disclaimer.

CPA

Certified Public Accountant – A licensed professional qualified to perform audits and provide accounting services.

COSO

Committee of Sponsoring Organizations – A framework for evaluating internal controls, risk management, and fraud deterrence in organizations.

Depreciation

The systematic allocation of the cost of a capital asset over its useful life, representing wear and tear on infrastructure and equipment.

Disclaimer of Opinion

The most severe type of audit finding where auditors cannot express an opinion on financial statements due to insufficient evidence or inadequate records. Extremely rare in municipal finance.

Enterprise Fund

A fund used to account for operations that are financed and operated similar to private business enterprises, where costs are recovered through user charges (e.g., Harbor Fund, Water Fund).

Fiscal Year (FY)

The 12-month period used for accounting and budgeting purposes. For Depoe Bay, this runs from July 1 to June 30 (e.g., FY2019 = July 1, 2018 to June 30, 2019).

Fund Balance

The difference between assets and liabilities in a governmental fund, representing the net resources available for spending.

GAAP

Generally Accepted Accounting Principles – The standard framework of guidelines for financial accounting used in the United States.

GASB

Governmental Accounting Standards Board – The organization that establishes accounting and financial reporting standards for state and local governments.

Internal Controls

Policies and procedures designed to ensure accurate financial reporting, prevent fraud, and safeguard assets. Includes segregation of duties, reconciliations, and documentation.

Interfund Transfer

Movement of money from one city fund to another, such as from the General Fund to the Harbor Fund to cover operating deficits.

Material Weakness

A deficiency in internal controls significant enough that there is a reasonable possibility that a material misstatement in financial reports would not be prevented or detected.

MD&A

Management's Discussion and Analysis – A required section of financial reports where management provides narrative context and explanation of financial results.

Modified Accrual Basis

An accounting method used by governmental funds where revenues are recognized when measurable and available, and expenditures when the liability is incurred.

Moody's Rating

A credit rating assigned by Moody's Investors Service that evaluates a government's ability to repay its debt obligations. Ratings range from Aaa (highest) through investment grades (Aa, A, Baa) to speculative grades (Ba, B, Caa, Ca, C). An A2 rating (middle tier of A ratings) indicates strong creditworthiness. Loss of a rating typically signals severe financial distress or reporting failures that prevent credit assessment.

UEFB

Unappropriated Ending Fund Balance – The amount of fund balance not allocated for specific purposes, available as a reserve or for future appropriation.

Government Organizations and Agencies

ARPA

American Rescue Plan Act – Federal COVID-19 relief legislation that provided funding to state and local governments for pandemic response and recovery.

FEMA

Federal Emergency Management Agency – Federal agency that provides disaster relief funding and coordination.

OGEC

Oregon Government Ethics Commission – State agency that investigates ethics violations and conflicts of interest by public officials.

ORS

Oregon Revised Statutes – The codified laws of the State of Oregon. Referenced frequently regarding budget law (ORS 294) and audit requirements (ORS 297).

OSMB

Oregon State Marine Board – State agency that provides grants and oversight for marine facilities and boating safety.

Secretary of State (SOS) Audits Division

The Oregon state office responsible for overseeing municipal audit compliance and maintaining the repository of local government audit reports.

URA

Urban Renewal Agency – A separate legal entity that uses tax increment financing to fund infrastructure improvements within designated urban renewal districts.

Municipal Finance Terms

Budget Law

Oregon Local Budget Law (ORS 294) that governs how cities must prepare, adopt, and execute budgets, including requirements for public hearings and legal spending limits.

Capital Improvements

Major investments in infrastructure such as docks, roads, or buildings that have long-term useful lives and are typically financed over multiple years.

General Fund

The primary operating fund of the city that accounts for most basic governmental services and is supported by general revenues like taxes.

Harbor Fund

Depoe Bay's enterprise fund that accounts for marina operations, including moorage fees, fuel sales, and maintenance costs.

MAP Grant

Maintenance Assistance Program grant from the Oregon State Marine Board for harbor facility maintenance and improvements.

Municipal Audit Law

Oregon law (ORS 297) requiring cities to have annual independent audits filed within six months of fiscal year end.

Operating Deficit

When a fund's operating expenses exceed its operating revenues, requiring subsidies or transfers from other sources to balance.

State-Shared Revenues

Funds distributed by the state to cities from state-collected taxes, including portions of gas tax, liquor tax, cigarette tax, and marijuana tax.

Structural Deficit

An ongoing imbalance where a fund's regular revenues are insufficient to cover its regular expenses, requiring permanent subsidies.

Tax Increment Financing (TIF)

A funding mechanism used by Urban Renewal Agencies where property tax growth within a district is captured to fund improvements in that area.

TLT or TRT

Transient Lodging Tax (TLT) or Transient Room Tax (TRT) – A tax on short-term lodging (hotels, motels, vacation rentals) that provides significant revenue for Depoe Bay.

Audit and Compliance Terms

Audit Backlog

Accumulated years of required audits that have not been completed, creating uncertainty about financial condition and legal compliance issues.

Audit Extension

Formal permission from the state to file an audit after the statutory deadline, which Depoe Bay failed to request for multiple years.

Compliance Report

Section of an audit that evaluates whether the entity followed applicable laws and regulations, particularly budget law and grant requirements.

Corrective Action Plan

A required response to audit findings outlining how the city will fix identified problems, filed with the Secretary of State per ORS 297.466.

Delinquent Filer

A municipality that has failed to file required audit reports on time, subject to state monitoring and potential penalties.

Financial Condition Report

An analysis of a city's fiscal health examining revenues, expenditures, fund balances, and financial trends – not a substitute for an audit.

Going Concern

An accounting principle assuming an entity will continue operating for the foreseeable future; doubt about this requires disclosure.

Management Letter

A separate communication from auditors to management and the governing body detailing internal control weaknesses and recommendations.

Qualified Elector

Under Oregon law, a U.S. citizen aged 18 or older who meets voter registration requirements. Required for holding elected office in Depoe Bay.

Segregation of Duties

An internal control principle where different people handle different parts of a financial transaction to prevent errors or fraud.

Unmodified Opinion

Also called a "clean" audit opinion, indicating financial statements are fairly presented in accordance with accounting principles.

Other Key Terms

Charter

The City of Depoe Bay Charter – The foundational legal document establishing the city's structure, powers, and requirements for elected officials.

City Recorder

The municipal officer responsible for maintaining official records, preparing meeting minutes, and often overseeing financial recordkeeping in small cities.

CPI

Consumer Price Index – A measure of inflation used to adjust fees and charges annually (e.g., the 3% harbor moorage fee increases).

Fiduciary Duty

The legal obligation of elected officials and managers to act in the best financial interests of the public and properly safeguard public funds.

Moorage

The act of securing a boat at a dock or the fee charged for using a boat slip in the harbor.

Public Records Law

Oregon law requiring government records to be available to the public and meeting minutes to be kept and accessible.

Transient

In the context of lodging taxes, refers to short-term stays (typically less than 30 days) subject to the transient lodging tax.

Withholding Penalty

The 10% reduction in state-shared revenues imposed on cities that fail to file required audits, later suspended by legislative action.