C.L. Coonrod & Company - July 2006 ITA Conference

July 2006 - Indiana Township Association Conference - South Bend, IN

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The PowerPoint presentation used in our session can be found here.

At the July 2006, conference of the Indiana Township Association, we were asked this question, and we promised to reply on our website:

Is a local appropriation needed to expend funds from a state or federal grant?

The answer is: It depends!

If the grant is a reimbursement of local money already expended, then an appropriation is first needed to expend the local money. At that point, the grant is simply a deposit of revenue to replace money already spent. Any further spending would require further local appropriations. (Grants are not the kind of “reimbursements” that can be respent without appropriation. Only reimbursements of money “recovered from erroneous or excessive disbursements” may be respent without appropriation. (IC 6-1.1-18-9))

However, if the grant money is provided in advance, for a specific purpose, and then expended locally for that purpose, no local appropriation is needed to expend the money. It is recommended, and perhaps required, that such advances be placed in a separate grant fund in order to avoid commingling it with local general funds.

If any local matching funds are required, there must be a local appropriation in order to expend the local matching funds.

For more information about state and federal grants, you are invited to visit our website at www.coonrodcpa.com

This article is intended to provide information of general interest to local government officials in Indiana. The information is not guaranteed to be applicable or appropriate in particular circumstances. Local officials should consult competent professionals before acting on any information contained in this article. We are not attorneys. Advice of a legal nature should be sought only from qualified attorneys.

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

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If you have additional questions or would like further information, please contact us at: Coonrod@CoonrodCPA.com