An appropriation from a specific capital reserve fund can be made for any project regardless of the original intended use.

An appropriation from a specific capital reserve fund can be made for any project regardless of the original intended use.

• A. True
• B. False
• C. Only for major projects
• D. Only with explicit approval from the mayor

Answer: (B)

Capital reserve funds are restricted accounts set aside for specific capital needs. Money placed in a particular capital reserve is intended to be used only for the projects or categories it was created for. Redirecting those funds to a project outside the original purpose requires formal action by the governing body, typically through a budget amendment, ordinance, or resolution that changes the fund’s authorized use or approves a transfer. The mayor’s explicit approval alone isn’t enough; proper process and legal authorization are required. That’s why the statement is false—appropriations from a specific capital reserve cannot be made for any project regardless of the original intended use.

Capital reserve funds are restricted accounts set aside for specific capital needs. Money placed in a particular capital reserve is intended to be used only for the projects or categories it was created for. Redirecting those funds to a project outside the original purpose requires formal action by the governing body, typically through a budget amendment, ordinance, or resolution that changes the fund’s authorized use or approves a transfer. The mayor’s explicit approval alone isn’t enough; proper process and legal authorization are required. That’s why the statement is false—appropriations from a specific capital reserve cannot be made for any project regardless of the original intended use.