Which type of budget is used for capital investments in governmental accounting?

The capital budget is specifically designed for planning and managing capital investments within governmental accounting. This type of budget focuses on the allocation of funds for long-term assets, such as buildings, infrastructure, and major equipment. It outlines the anticipated costs and justifications for significant expenditures that will enhance or maintain organizational capacity over multiple years.

A capital budget typically includes detailed project proposals, timelines, and associated revenues or funding sources, ensuring that governments can effectively prioritize and manage large-scale projects that require significant financial resources. By distinguishing capital expenditures from operational expenses, governmental entities ensure that they make informed decisions regarding long-term investments, which are crucial for maintaining and improving public services. This budgeting approach supports transparency and accountability, which are fundamental in government financial management.