Which fund is not intended for regular operating expenses?

• A. Operating Fund
• B. Contingency Fund
• C. Reserve Fund
• D. Capital Fund

Answer: (B)

The main idea is understanding what each fund is meant to cover in a property management budget. An operating fund is for day-to-day, regular expenses like maintenance, utilities, and payroll. A reserve fund is set aside for planned future major repairs or replacements to keep the property in good condition. A capital fund is used to finance large capital projects or substantial improvements. The contingency fund, however, is specifically for unexpected costs or emergencies and budget overruns—not for routine operating expenses. So it’s not intended for regular operating needs; its role is to provide a buffer for unforeseen events.