Which of the following statements is true about fiscal years and capital projects?

The statement that capital projects can often span multiple fiscal years is accurate and reflects a common practice in municipal finance management. This occurs because capital projects often involve substantial investments and extended timeframes for completion. For instance, large infrastructure projects, such as the construction of roads, bridges, or public buildings, may require considerable planning, design, and execution effort that stretches beyond the confines of a single fiscal year.

Municipalities typically plan and budget for these types of projects over several fiscal years, allowing them to allocate resources, assess risks, and manage cash flows more effectively across the duration of the project. This multi-year planning process also enables governments to phase the funding and implementation of projects according to their fiscal capacity and operational needs, which can result in smoother project management and execution.

In contrast, the other options suggest timeframes or management practices that are not typically representative of how capital projects are handled. For example, stating that capital projects must end within the fiscal year overlooks the reality that many of them are designed to carry over and may be structured with financing strategies that accommodate their long-term nature. Proposing that they are only planned for during fiscal start fails to recognize the ongoing strategic planning and adjustments that might occur throughout the year. Lastly, claiming that they