Capital Planning and Budgeting
Regular reporting of the financial status of major capital projects is needed to help the governing board stay informed about the costs and financing of a project. It also allows the board to determine the project's financial status relative to what was originally estimated and authorized. Without accurate and regular financial reporting, the board may not become aware of emerging problems affecting the successful completion of the project in a timely manner.
Financial records for each capital project should contain sufficient information to document the project's complete financial history and establish accountability for resources provided for a particular purpose (see example). Local Finance Law requires bond proceeds be used for the object or purpose for which they were intended.
There are additional considerations for towns and counties constructing capital projects for special district purposes. General Municipal Law requires that projects issuing debt whose costs exceed a threshold obtain OSC approval prior to the local government commencing the project.
A listing of expenditures is not adequate record keeping; the accounting records should include a general ledger, subsidiary ledgers, and cash receipt and disbursement journals. Each capital project must have a separate account and budget to establish and control costs.