American Institute of Certified Planners (AICP) Practice Exam

What is an enterprise fund primarily established for?

1. To allocate tax revenues for public services

2. To manage specific revenues and expenditures for a golf course

3. To fund infrastructure projects

4. To support educational initiatives

The correct answer is: To manage specific revenues and expenditures for a golf course

An enterprise fund is primarily established to manage specific revenues and expenditures associated with a particular service or function that operates similarly to a business. In the context of this question, the appropriate choice highlights that enterprise funds are commonly used for activities like operating a golf course. These funds are designed to be self-sustaining, deriving their revenues from user fees rather than general taxes. This approach ensures that the costs of providing services, such as maintaining and operating a golf course, are covered by the users of the service itself, promoting accountability and efficient management. The other options do not align with the primary purpose of an enterprise fund. The allocation of tax revenues for public services typically falls under general fund operations rather than an enterprise fund, as these funds deal more with specific services that aim to break even financially. Funding infrastructure projects, while critical, often relies on capital improvement funds or bonds that are not classified as enterprise funds. Similarly, support for educational initiatives is generally financed through educational funds rather than enterprise funds, which focus on services that generate specific revenue streams.