(True/False) Any appropriation in the current budget for accumulated absence liability is considered an in-cap expense.

The statement is accurate because any appropriation in the current budget for accumulated absence liability is indeed classified as an in-cap expense. In-cap expenses refer to costs that are incurred but not paid out within the current fiscal period; these could include liabilities such as vacation or sick leave that employees have accumulated but not yet taken.

When a municipality budgets for accumulated absence liabilities, it recognizes these future obligations, which is vital for accurate financial reporting and maintaining fiscal health. This appropriation reflects the commitment of funds that may be used in future periods when employees choose to take their accrued leave. By acknowledging these expenses in the budget, municipalities can ensure they are prepared for these liabilities, contributing to a more transparent and accountable budgeting process.

This classification helps maintain an accurate depiction of financial obligations, distinguishing them from current operational costs that affect cash flow immediately. Understanding this distinction is crucial for effective budget management and financial planning in municipal governance.