Are there ways to minimize the risk of nonappropriation?
Even though all evidence shows that nonappropriation is extremely rare, lessors nevertheless should be able to spot the warning signs. The 1999 AGL&F survey, along with other studies of transactions that have been the subject of a nonappropriation, indicates that a lessor can minimize the risk of nonappropriation by considering the following factors: a. Is the leased equipment essential to the governments performance of a governmental function? If the equipment fulfills an important government function, nonappropriation is less likely because the government will have to still perform that function. On the other hand, equipment leased for a nonessential function can be returned without the government having to address the consequences of failing to offer an essential government service. Consider the difference between a lease of golf carts for a municipal golf course and a lease of school buses for a school district. b. Does the equipment work? If equipment fails to perform as warranted
