Alabama oversight of federal grants

• Federalism
• Terms and definitions
• Laws
• Court cases
• Major arguments
• State responses to federal mandates
• State survey of the federal grant review process
  • State responses to the federal grant review process survey, 2021
  • State responses by question to the federal grant review process survey, 2021
• Federalism by the numbers
  • Federalism by the numbers: Federal mandates
  • Federalism by the numbers: Federal grants-in-aid
  • Federalism by the numbers: Federal information collection requests
  • Overview of federal spending during the coronavirus (COVID-19) pandemic
• Index of articles

Federal grants make up a significant portion of state budgets, providing funding for programs in health care, education, infrastructure, and public assistance. These funds are typically accompanied by policy conditions or reporting requirements that shape how states implement federally funded programs. In response, states have developed varying oversight systems to review, approve, and monitor federal funding.

This page summarizes federal grant funding and oversight in Alabama. It includes data on how federal dollars contribute to the state budget, highlights Alabama’s position relative to other states, and analyzes key laws related to grant coordination, transparency, and accountability. This research was last updated in September 2025.

HIGHLIGHTS

In fiscal year 2023, 39.8% of Alabama’s total state revenue came from intergovernmental sources—primarily federal grants—the 17-highest share among the 50 states. The state received approximately $17.9 billion in federal funds, the 23rd-highest total nationwide.

Alabama law placed federal grant oversight under the Governor of Alabama through the Office of State Planning and Federal Programs and the Executive Budget Office, which coordinate, report, and evaluate federal funding, with legislative review provided by the Legislative Council.

This article includes information about the following topics:

• Federal funding to Alabama
  • Percentage of Alabama budget funded by the federal government
  • Amount of federal grants to Alabama

• Alabama statutes on federal grant oversight
  • Executive oversight of federal grants
  • Legislative oversight and transparency
  • Audit and financial oversight
  • Agency oversight of federal grant applications

Background

Federal grants are a major source of funding for state governments, supporting programs in areas such as health care, education, transportation, and public assistance. These funds are distributed through a variety of mechanisms—including block grants, categorical grants, and formula-based programs—and are typically accompanied by policy conditions, reporting requirements, or other administrative mandates.

Federal grants are reported as part of a state’s intergovernmental revenue, a category tracked annually by the United States Census Bureau. Intergovernmental revenue includes funds transferred from both federal and local governments, but federal sources account for the vast majority. In 2022, approximately 98% of intergovernmental revenue received by states came from the federal government. In 2023—the most recent year for which data is available—states collectively received about $1.12 trillion in intergovernmental revenue, representing 36.7% of all general revenue.

Because of the scale and conditional nature of federal funding, many states have adopted statutory and administrative frameworks to oversee how agencies apply for, accept, and manage federal grants. These frameworks reflect broader federalism concerns—such as how states balance fiscal dependence with administrative autonomy, and how they respond to federal mandates that may influence state policy priorities.

This research was last updated in July 2025.

Top federal funding programs to states

In fiscal year 2023, the federal government distributed over $1 trillion in grants to states. The largest programs included Medicaid, highway funding, rental assistance, and child nutrition. Medicaid alone accounted for 56.8% of federal grants to states, and the top 20 programs combined made up approximately 87.8% of total federal grant outlays to states.

Federal funding to Alabama

Amount of federal grants to Alabama

In 2023, Alabama received approximately $17.9 billion in intergovernmental revenue out of a total $44.9 billion in state revenue, the 23rd-highest amount among the 50 states. The national average was approximately $22.3 billion per state. Across all states, intergovernmental revenue totaled about $1.12 trillion out of $3.04 trillion in general revenue. In 2022, approximately 98% of intergovernmental revenue states received came from the federal government.

Percentage of Alabama budget funded by the federal government

In fiscal year 2023, 39.8% of Alabama’s total state revenue came from intergovernmental sources—primarily federal grants—compared to 36.7% for state governments nationwide. Alabama had the 17th-highest percentage of state revenue funded by the federal government.

Intergovernmental revenue by state

This table shows the percentage and amount of each state's total revenue that came from intergovernmental sources—primarily federal grants—in fiscal year 2023. It lists states in descending order by the share of revenue from these sources and includes total state revenue, intergovernmental revenue, and the percentage for each state. The data highlights how dependent each state is on federal funding as a portion of its overall budget.

Intergovernmental revenue by state, 2023

State	Total revenue (thousands)	Intergovernmental revenue (thousands)	Percent
Louisiana	$44,396,718	$22,899,720	51.6%
Arizona	$60,891,976	$29,948,016	49.2%
Missouri	$45,073,525	$20,888,653	46.3%
Wyoming	$8,357,625	$3,792,590	45.4%
Alaska	$11,883,137	$5,341,732	45.0%
Montana	$10,689,677	$4,710,013	44.1%
Kentucky	$46,180,553	$20,254,290	43.9%
Mississippi	$26,046,854	$11,310,571	43.4%
Rhode Island	$12,286,091	$5,288,136	43.0%
Oklahoma	$37,833,350	$16,255,253	43.0%
West Virginia	$18,871,691	$8,025,296	42.5%
Tennessee	$48,344,600	$20,223,947	41.8%
South Dakota	$6,278,267	$2,570,818	40.9%
Arkansas	$29,702,938	$12,104,414	40.8%
Georgia	$70,031,565	$28,344,731	40.5%
Indiana	$62,196,503	$25,102,743	40.4%
Alabama	$44,884,391	$17,879,389	39.8%
Maine	$13,604,269	$5,360,431	39.4%
New Hampshire	$10,340,297	$4,052,066	39.2%
South Carolina	$46,113,727	$17,785,656	38.6%
Nebraska	$15,493,777	$5,972,778	38.5%
Texas	$213,481,319	$82,164,797	38.5%
Pennsylvania	$127,986,754	$49,211,832	38.5%
Ohio	$98,348,911	$37,785,734	38.4%
Florida	$141,946,520	$53,706,466	37.8%
New York	$259,552,404	$96,814,839	37.3%
Michigan	$90,192,191	$33,060,736	36.7%
Vermont	$9,063,120	$3,293,531	36.3%
Colorado	$41,909,412	$15,138,043	36.1%
Maryland	$58,597,846	$21,004,254	35.8%
North Carolina	$81,064,214	$28,814,153	35.5%
Oregon	$51,612,303	$17,510,543	33.9%
New Mexico	$40,359,510	$13,628,893	33.8%
Nevada	$24,219,218	$8,040,101	33.2%
Iowa	$31,265,753	$10,333,642	33.1%
Washington	$74,164,396	$24,480,102	33.0%
California	$417,100,727	$137,666,813	33.0%
Minnesota	$60,090,592	$19,468,582	32.4%
Illinois	$111,409,197	$35,838,931	32.2%
Wisconsin	$49,805,740	$15,984,042	32.1%
Massachusetts	$80,850,200	$25,519,880	31.6%
New Jersey	$100,285,531	$31,191,180	31.1%
Connecticut	$38,016,037	$11,800,021	31.0%
Idaho	$14,453,559	$4,456,686	30.8%
Delaware	$13,462,717	$4,105,552	30.5%
Virginia	$81,975,174	$23,958,775	29.2%
North Dakota	$10,349,350	$2,876,346	27.8%
Utah	$31,293,027	$8,603,744	27.5%
Kansas	$27,507,628	$7,524,382	27.4%
Hawaii	$19,221,682	$5,057,226	26.3%

Source: U.S. Census Bureau, Annual Survey of State Government Finances

Alabama statutes on federal grant oversight

Many states have statutory provisions that govern the oversight, approval, transparency, and auditing of federal grants received within the state. These laws typically assign responsibilities to executive agencies, the governor’s office, and the legislature to ensure proper management and accountability of federal funds. This research was last updated in September 2025.

Executive oversight of federal grants

Executive oversight of federal grants refers to statutes that assign responsibility to the governor’s office to review, approve, coordinate, or manage federal grants across the state.

Alabama AL Code § 41-9-208 assigned an oversight role to the Office of State Planning and Federal Programs, which is directly under the Governor's supervision. \

“ (a) There is hereby created the Office of State Planning and Federal Programs within the office of the Governor and directly under his supervision and control. The Office of State Planning and Federal Programs shall consist of the Governor as the State Planning and Federal Programs Officer, a chief administrative officer to be designated as Director of the Office of State Planning and Federal Programs, who shall be appointed by the Governor, and serve at his pleasure, at a salary to be set in the same manner and with the same limitations as otherwise provided by law for executive department heads. The Director of the Office of State Planning and Federal Programs shall be a member of such boards and commissions, as they relate to his authority under the provisions of this article, and as required and currently authorized under the various federal programs for the director of the Alabama Development Office, and as approved by the Governor. All other employees necessary to carry out the duties and functions of the Office of State Planning and Federal Programs shall be employed subject to the provisions of the state Merit System laws and shall be entitled to the same rights and benefits thereunder. Salaries set for employees shall not exceed the salary set by law for executive department heads. (b) The Governor, through the Office of State Planning and Federal Programs, shall encourage comprehensive and coordinated planning and programming of the affairs of state government. (c) The Governor may direct any state department or other agency of state government, directly under his control and supervision, to furnish the Office of State Planning and Federal Programs with such personnel, equipment and services as are necessary to enable it to carry out its responsibilities and duties, and he may prescribe the terms thereof, including reimbursement of costs therefor. ”

Alabama AL Code § 41-19-4 assigned an oversight role to the Governor as related to the state budget.

“ Section 41-19-4 Responsibilities of Governor as to Preparation and Administration of State Budget, Etc., Generally. The Governor is responsible for the preparation and administration of the state budget and the evaluation of the long range program plans, requested budgets and alternatives to state agency/department policies and programs and formulation and recommendation for consideration by the Legislature of a proposed comprehensive program and financial plan which shall cover all estimated receipts and expenditures of the state government, including all grants, loans and moneys received from the federal government. Proposed expenditures shall not exceed estimated revenues and resources. ”

Alabama 41-4-97 assigned an oversight role to the Executive Budget Office to compile and submit a federal funding report.

“ Annual Report by Certain State Agencies Regarding Receipt of Federal Funds. (e)(1) The Executive Budget Office, on or before January 1 of each year, shall prepare a report that includes the following: a. A compilation and summary of the reports the office receives from each state agency. b. A comparison of the aggregate value of federal receipts each state agency received for the previous fiscal year to the aggregate amount of federal funds appropriated by the Legislature to that state agency for that fiscal year. c. A list of state agencies that did not submit a report as required by this subsection. ”

Legislative oversight and transparency

Legislative oversight and transparency refers to statutes requiring reports to or involvement from the legislature in managing or approving federal grants.

Alabama AL Code § 41-4-97 assigned an oversight role to Legislative Council to review the Executive Budget Office report.

“ (2) The Executive Budget Office shall submit the report required under subdivision (1) to the Legislative Council by January 1. (3) Upon receipt of the report, the Legislative Council shall place the report on the agenda for review and consideration. Upon consideration of the report, the committee may elect to do any of the following: a. Recommend that the Legislature revise appropriations for a state agency. b. Take no action. c. Take any other action upon majority approval of the committee members. ”

Audit and financial oversight

Audit and financial oversight refers to statutes related to auditing, financial tracking, or compliance for federal funds.

Ballotpedia did not identify any statutes that assigned independent audit responsibilities specific to federal grants to the executive branch. Reporting requirements exist under § 41-4-97.

Agency oversight of federal grant applications

Agency oversight of federal grant applications refers to statutes that establish procedures or requirements for how state agencies request or acknowledge federal funding.

Alabama AL Code § 41-9-207 assigned an oversight role to the Office of State Planning and Federal Programs.

“ (b) It is the purpose of this article to promote the development of the state’s human, economic and physical resources, and to promote the health, safety and general welfare of its citizens, by creating within the executive branch, an agency for comprehensive statewide planning and federal assistance oversight. The agency shall act as an advisory, consulting, monitoring and coordinating agency to harmonize activities at all levels of government, render technical assistance to governmental units and political subdivisions of this state and stimulate public interest and participation in the human resource, economic and physical development of the state as these relate to federal programs, federal grants and federal assistance. ”

Other state oversight of federal grants

Click on a state to find out its oversight of federal grants, including how it reviews, approves, and manages federal funding through statutes, executive procedures, and legislative reporting.

See also

• Federalism by the numbers
• Federalism
• Unfunded Mandates Reform Act
• Regulatory mandate
• Interlocking (cooperative) federalism

External links

• Search Google News for this topic

Footnotes

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