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Most Misunderstood Terms in Government

by | Apr 17, 2015 | Government Entities

iStock_000003210945Medium_200_128When communicating with government managers, often times the same words and phrases can have multiple – and contradictory – meanings.

Here are five that are especially important to understand the meaning behind:

1. Merit Pay

In most cases, merit pay in government goes to the vast majority of personnel who are neither superstars nor on the road to being fired. It’s the policy of using agreed-upon criteria over a period of time to establish someone’s salary schedule.

2. Balanced Budget

When reading about government financial management, most states (49 out of the 50 – all except Vermont) have some kind of requirement that their budgets must be balanced. It’s important to note that balanced budgets are typically only balanced on the day they are signed, marking the huge difference between a balanced budget and a sustainable budget.

3. Vacancies

A vacancy in the public sector can a job that someone is trying to fill. Or, it can also represent a job that’s been included in the budget and has funding, but not necessarily wanting or needing to be filled. Agencies can hold onto many vacancies for years, using the budgetary dollars as a form of slush fund for other purposes.

4. Big Data

Big data can represent the effort to share information successfully among multiple agencies. It can also be the result of utilizing cutting-edge technology to make sense out of massive, nearly incomprehensible numbers.

5. Deficits vs. Shortfalls

These key words are often used interchangeably, but they are very different in meaning. A deficit is the amount, at the end of a fiscal year that a government’s expenditures exceed its revenues. The federal government is allowed to run a deficit at the end of the year – and often times does. In contrast, most cities and states can’t do the same, and end up doing something to raise cash or reduce costs before the end of the year. Shortfall is a budget gap that a state of city has to fill while the process of budget creation is ongoing.

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