ABCs of central government

The ‘ABCs of central government’ section is a collection of terminology and explanations to assist in the interpretation of the government’s financial, personnel and profitability information.

Variable annual appropriation

A variable annual appropriation is an appropriation that has been granted for a single year and cannot be transferred to later years but can be exceeded with permission from the ministry in question once a specified process has been completed (overrun permission application).

On-budget entities

These form a portion of the central government finances, the income and expenses of which are included in the state budget. The term is used in the same meaning as on-budget finances. On-budget entities do not encompass funds, businesses and state-owned companies outside the on-budget finances.

Administrative branch

An administrative branch is formed by an individual ministry together with its subordinate agencies and institutions. The central government is divided into 12 administrative branches. Administrative branches are sometimes referred to with the Finnish abbreviation HA (hallinnonala).


During a financial year, the amount of unused appropriations remaining or the estimated remaining accrual of the revenue estimate for the financial year.


This term refers to the cost or income accrual accumulated over the course of a financial year.

Accounting unit

Agencies and institutions within the central government are divided into about 65 accounting units. These units may be referred to with the Finnish abbreviation kpy (kirjanpitoyksikkö).


Total appropriations available during a financial year, i.e. the total sum of appropriations for the year in question and any appropriations carried over from the previous year.

Supplementary budget

The supplementary budget is an amendment to the government budget, with the same preparation, application and follow-up phases as under the operating process for the government budget. The supplementary budget can be used to increase or decrease appropriations or revenue estimates.

Commercial accounting

Commercial accounting (or simply ‘accounting’ in short) is a mandatory registration and calculation system for financial events, which is used to create the financial statement.

For the sake of clarity, the government organisation tends to refer to commercial accounting (instead of accounting) to separate it from budget accounting.

Commercial account (lkp account)

Accounts used for commercial accounting. The State Treasury maintains a chart of accounts on the accounting units’ available commercial accounts.

State enterprise

State enterprises are governed by the Act on Unincorporated State Enterprises while their operations and duties are governed by separate acts addressing specific enterprises. State enterprises are defined as companies, and they are not included in the government’s on-budget entities.


A class is a part of a main title of revenues or expenditures, which consists of items.


In commercial accounting, an expense is a financial expenditure resulting from the acquisition of a factor of production or other cause. Expenses can be onerous (e.g. acquisitions) or gratuitous (e.g. government aid and subsidies).


An item is a part of a class, which consists of a decision portion and clarification portion regarding the relevant appropriation or budget. The state budget contains approximately 600 items.


A sum of money allocated for one or more purposes of use. There are varying types of appropriations (fixed, variable annual, deferrable, special and discretionary appropriations). The purpose of each appropriation is specified either in text form or with the number identifier of the pertinent budget section.

Net accumulation

Total usage of the appropriations for the financial year and any deferrable appropriations carried over from the previous year as a net sum. Alternatively, this can refer to the total revenue accumulated during the financial year.

Main title of revenues

 This is a qualitatively divided part of the budget, which consists of classes.

Main title of expenditure

This is an administratively divided part of appropriations, which consists of classes.

Off-budget finances

This term refers to funds not encompassed by on-budget entities. See the term off-budget fund below.

Deferrable appropriation (2- or 3-year deferrable appropriation)

This is a fixed appropriation that is available for use for no more than the two following financial years.

Transferred deferrable appropriation

A deferrable appropriation that has been carried over from the previous year and is available for use during the financial year.


The state budget is an estimate of the government’s income and expenses for the coming year. The expenses in the budget are divided into main titles of expenditure by administrative branch, and into classes and items under them. In the context of revenues, the term ‘main title’ is at times specified with the addition of the suffix ‘of revenues’. Decisions on the budget are made by the Parliament of Finland.

When the reports indicate budget figures, these refer to the revenue and cost estimate in the original budget.

State Budget Decree

The State Budget Decree includes stipulations on procedures related to the preparation of the state budget as well as the income and expenses within it.

Budget account (Takp account)

The budget accounts and their content must match the state budget and its account division. The State Treasury compiles and publishes account divisions, which are separately confirmed by the ministries each year, in the form of a state budget account division that lists the budget accounts applied during the financial year in question.

Budget accounting

Budget accounting encompasses budget accounts, deferred appropriation accounts and other accounts specified by the State Treasury. The budget accounting is used to ensure and verify that the central government finances adhere to the budget decided on by the Parliament of Finland.

Off-budget fund

Off-budget funds are a portion of the central government finances consisting of Government funds that are not governed by the government budget. The state has a total of eleven funds external to the budget, including the State Pension Fund, the Housing Fund of Finland and the State Guarantee Fund.

On-budget finances

See on-budget entities.

Account group

These are account groups for commercial accounting, such as personnel costs or rents, under which multiple commercial accounts are grouped.

Operating expense

This is a cost type under the on-budget entities, which the state uses to finance the operations of an agency or institution.

Operating expense item

This is a task-specific item that is used to allocate appropriations for expenses caused by the operations of an agency or institution or for the acquisition of long-term factors of production.

Revenue estimate

The revenue estimate is a part of the state budget that presents an estimate of the income to be accumulated during the financial year. Revenue estimates also include loans.

Performance-managed agency

Offices and organisations included in the accounting unit can also be called performance-managed agencies. Separate performance targets on operations and finances can be defined for performance-managed agencies.

Employer office

Within the central government’s HR administration, employer operations use a classification which is more accurate than accounting units and performance-managed agencies, the employer office. Employer agencies are also referred to as VHS agencies (government standard). Employer offices are not always administratively independent agencies. The concept ‘employer office’ is also used in the employer’s personnel data system Tahti.

Central government

Part of the public finances consisting of the government’s on-budget entities and off-budget funds. At times, the state’s businesses are also included in the on-budget entities.

Central government finances

In addition to on-budget entities, central government finances also include non-budget funds.

Effective budget

The term refers to the financial year’s budget and supplementary budget together.