DEFINITION OF FEDERAL FUNDS - 17105
Agencies/Departments will use the following definition of federal funds to identify money remitted to the State Treasury, which shall be deposited in the Federal Trust Fund:
Federal funds are all moneys received directly from the federal government. The expenditure of these funds is administered through or under the direction of any agency/department and is reported as Federal Trust Fund moneys in the “Detail of Appropriations” within the Governor's Budget.
The state may receive money from the federal government under different financial relationships. Money received directly from the federal government shall be deposited in the Federal Trust Fund with exceptions such as contracts and equitable sharing program as described below.
Grants and Cooperative Agreements
The state may enter into grants and cooperative agreements with the federal government. The federal agency will transfer money, property, services, or anything of value to the state to accomplish a public purpose of support or stimulation authorized by federal statute.
Grants and cooperative agreements should have a valid Assistance Listing Number (ALN).
Money received directly from the federal government for a grant or cooperative agreement shall be deposited in the Federal Trust Fund.
Contracts
The state may enter into procurement contracts with the federal government to acquire, purchase, lease, or barter property or services for the direct benefit or use of the federal government. Money received under federal procurement contracts shall not be deposited in the Federal Trust Fund.
Equitable Sharing Program
The state may participate in the federal program to share federal asset forfeiture proceeds through equitable sharing. Asset forfeiture proceeds from the federal government must be maintained in a separate fund or account subject to appropriate accounting controls and financial audits. Money received under such a program shall not be deposited in the Federal Trust Fund.
Other Exceptions
Revenues derived from sources of financing other than receipts from the federal government (e.g., revenues derived from taxes, licenses, fees, and fines) shall not be deposited in the Federal Trust Fund.
When federal assistance is transferred between agencies/departments, the receiving agency/department will classify it as a reimbursement.
For information on receipt of federal funds, see SAM Section 8003. For information on the Cash Management Improvement Act and on the exchange of funds between the state and the federal government, see SAM Sections 8010 through 8014. The funds received by the state are subject to the federal administrative and legal requirements, audit requirements, and federal cost principles. For information on federal cost recoveries, see SAM Sections 9215 through 9216.2.
For assistance in identifying the relationship of federal funds, contact the Department of Finance, Fiscal Systems and Consulting Unit.