1. The Board of Aldermen of Fitchburg approved the appropriations budget for its General Fund for the year ending December 31, as shown below:

General Government $600,000

Public Safety 3,100,000

Public Works 1,400,000

Health & Welfare 800,000

Cultural & Recreation 400,000

Contribution & Retirement Fund 700,000

Total General Fund Appropriation $7,000,000 1) Explain the legal significance of an appropriation and why auditors engaged for a financial

and compliance audit need to know the meaning of the term. (cite source)

2) It is illegal for a government to spend money for any purpose unless a valid appropriation

for that purpose exists. Does this legal rule assure good financial management for each

government? Why or why not? (cite source)