What distinguishes capital projects funds from other fund types?

Capital projects funds are specifically designed to manage the resources and expenditures associated with acquiring, improving, or constructing long-term capital assets. This distinguishes them from other fund types that may deal with operational expenses or short-term financial activities. The primary purpose of capital projects funds is to facilitate the financial reporting and accountability of investments in significant assets, such as buildings, infrastructure, and equipment.

By focusing exclusively on capital assets, these funds ensure that financial resources allocated for specific projects are tracked separately from operational budgets. This allows governments to maintain transparency regarding how funds are used and report more accurately on the financial health and investment strategies of the organization.