Capital projects may be totally funded from which sources?

Capital projects may be totally funded from which sources?

• A. Capital Improvement Fund
• B. Specific reserves in the Capital Fund
• C. Capital Fund Balance
• D. All of the above

Answer: (D)

Capital projects are financed from resources that are set aside specifically for capital needs, rather than from ongoing operating revenues. A Capital Improvement Fund exists precisely to accumulate resources for major purchases and improvements, so if there’s enough money there, a project can be funded entirely from that fund. Specific reserves inside the Capital Fund are earmarked for particular capital needs; these restricted reserves can be drawn down fully to cover a project. The Capital Fund Balance represents the remaining unspent resources within the Capital Fund that can be appropriated to fund a project as well. Since each of these sources can stand on its own to cover a capital expenditure, the correct choice is that all of the above may fund capital projects entirely.

Capital projects are financed from resources that are set aside specifically for capital needs, rather than from ongoing operating revenues. A Capital Improvement Fund exists precisely to accumulate resources for major purchases and improvements, so if there’s enough money there, a project can be funded entirely from that fund. Specific reserves inside the Capital Fund are earmarked for particular capital needs; these restricted reserves can be drawn down fully to cover a project. The Capital Fund Balance represents the remaining unspent resources within the Capital Fund that can be appropriated to fund a project as well. Since each of these sources can stand on its own to cover a capital expenditure, the correct choice is that all of the above may fund capital projects entirely.