Which sequence correctly outlines the typical phases of the capital budget cycle?

Which sequence correctly outlines the typical phases of the capital budget cycle?

• A. Needs identification, project evaluation, procurement/construction, funding appropriation, and project monitoring/evaluation.
• B. Funding appropriation, needs identification, project evaluation, procurement/construction, and project monitoring/evaluation.
• C. Needs identification, project evaluation, funding appropriation, procurement/construction, and project monitoring/evaluation.
• D. Procurement/construction, needs identification, project evaluation, funding appropriation, and project monitoring/evaluation.

Answer: (C)

The sequence tests a logical flow from defining what’s needed to delivering and assessing the result. Start by identifying the specific needs or problems the capital project aims to address, so resources are directed to the real issue. Next, evaluate potential projects to compare feasibility, costs, benefits, risks, and alternatives, building a solid case for which option to pursue. Only after this evaluation supports moving forward should funding be appropriated, since construction can’t begin without budget authority. With funds secured, procurement and construction proceed to implement the chosen project. Finally, after implementation, monitor and evaluate the project to ensure it delivers the intended outcomes and to inform future budgeting decisions. Other sequences skip or reorder these steps in ways that would allow construction or procurement to occur without approved funds or without clearly defined needs and evidence, which is why they don’t fit the proper flow.

The sequence tests a logical flow from defining what’s needed to delivering and assessing the result. Start by identifying the specific needs or problems the capital project aims to address, so resources are directed to the real issue. Next, evaluate potential projects to compare feasibility, costs, benefits, risks, and alternatives, building a solid case for which option to pursue. Only after this evaluation supports moving forward should funding be appropriated, since construction can’t begin without budget authority. With funds secured, procurement and construction proceed to implement the chosen project. Finally, after implementation, monitor and evaluate the project to ensure it delivers the intended outcomes and to inform future budgeting decisions. Other sequences skip or reorder these steps in ways that would allow construction or procurement to occur without approved funds or without clearly defined needs and evidence, which is why they don’t fit the proper flow.