What type of expenditures are created by a new service program initiative?

New service program initiatives typically require ongoing funding to cover the costs associated with delivering that service. This leads to the generation of new operating expenditures. Operating expenditures encompass costs that are necessary for the day-to-day functioning of a service, such as salaries, utilities, supplies, and maintenance. When a new program is introduced, it usually involves ongoing expenses to sustain its operations, making the classification of these costs as new operating expenditures appropriate.

In contrast, capital expenditures relate to the costs associated with acquiring, upgrading, or maintaining physical assets such as buildings or infrastructure, which are not directly linked to the operational costs of a new service initiative. The other categories, variable and fixed expenditures, refer to the nature of costs rather than the context of the service program itself. Variable expenditures change with the level of service provided, while fixed expenditures remain constant regardless of service levels. However, a new service program initiative primarily generates new operating expenditures to support its implementation and ongoing operation.