GFOA Capital Planning and Forecasting Practice Test

The primary purpose of a Capital Improvement Program (CIP) is to identify needed capital projects and coordinate the necessary financing. A CIP serves as a strategic planning tool that helps municipalities and government entities prioritize their capital projects, such as infrastructure improvements, facility upgrades, and equipment purchases. It outlines the projects that are necessary to meet community needs and identifies funding sources to ensure the successful execution of these projects. This planning process typically involves assessing project feasibility, determining timelines, estimating costs, and establishing funding mechanisms.

By effectively coordinating financing, a CIP ensures that resources are allocated in a way that aligns with the community’s goals and priorities, ultimately facilitating sustainable growth and development. It provides a framework for making informed decisions about capital investments, optimizing budgetary resources, and ensuring accountability in the use of public funds.

The other options do not reflect the comprehensive planning and prioritization aspects that the CIP represents. While certain elements may be related to budgeting or evaluating past expenditures, they do not encapsulate the overarching functions of a Capital Improvement Program.