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Indiana oversight of federal grants

| Federalism |
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| •Key terms • Court cases •Major arguments • State responses to federal mandates •State oversight of federal grants • Federalism by the numbers • Index |
- See also: State oversight of federal grants
Federal grants make up a significant portion of state budgets, providing funding for programs in health care, education, infrastructure, and public assistance.[1][2] 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 the use of federal funding.
This page summarizes federal grant funding and oversight in Indiana. It includes data on how federal dollars contribute to the state budget, highlights Indiana’s position relative to other states, and analyzes key laws related to grant coordination, transparency, and accountability. This research was last updated in December 2025.
This article includes information about the following topics:
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.[2] 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.[3] 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.[1]
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. States vary widely in how these frameworks are structured, with some centralizing authority in executive agencies and others distributing responsibilities across legislative, budget, and oversight bodies; collectively, these arrangements define the state's oversight of federal grant activity. 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 December 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 through which states received federal funding were 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.[4]
Federal funding to Indiana
Amount of federal grants to Indiana
In 2023, Indiana received approximately $25.1 billion in intergovernmental revenue out of a total $62.2 billion in state revenue, the 14th-highest nationwide.[1] 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.[1] In 2022, approximately 98% of intergovernmental revenue states received came from the federal government.[3]
Percentage of Indiana budget funded by the federal government
In fiscal year 2023, 40.4% of Indiana’s total state revenue came from intergovernmental sources—primarily federal grants—compared to 36.7% for state governments nationwide.[1] Indiana had the 16th-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.
Source: U.S. Census Bureau, Annual Survey of State Government Finances
Indiana 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 December 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.
Indiana § 4-3-24-7(d) requires that the Indiana Budget Agency submit its annual federal assistance report directly to the governor.[5]
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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.
Indiana § 4-3-24-7(d) also requires the budget agency to transmit its annual report to the legislative council, budget committee, and interim study committee on fiscal policy.[7]
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Indiana § 4-12-19-4 enhances legislative review by requiring quarterly reports to the budget committee for any new requests to participate in federal programs or accept new federal funds.[8]
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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 Indiana statutes that assigned an audit of federal grants specifically.
Agency oversight of federal grants
Agency oversight of federal grant applications refers to statutes that establish procedures or requirements for how state agencies request or acknowledge federal funding.
Agency oversight of federal grant applications
Indiana § 4-3-24-5 gives the budget agency approval authority over all federal assistance activity.[9]
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Indiana § 4-3-24-6 further requires each state agency receiving federal funds to work with the budget agency on a biennial federal assistance review plan.[10]
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Indiana § 4-12-19-4(b) restricts acceptance of new federal funds that impose unfunded obligations on the state.[11]
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How does Indiana compare to other states?
This section provides an overview of how states conduct oversight of federal grants, including gubernatorial approval, legislative authority, agency coordination, public transparency, and state contingency planning. It includes summaries, comparative maps, and detailed tables showing how all 50 states structure each type of oversight. For specific details and information about a state, click here.
- Summary table showing how each state structures its oversight of federal grants.
- Whether governors must approve federal grant applications or have no required approval role.
- Whether legislatures must approve federal grants or have no statutory approval authority.
- Whether states require public reporting, hearings, or transparency for federal grant activity.
State-by-state overview of federal grants oversight
This table provides a state-by-state overview of how each state oversees federal grants, summarizing the key statutes, agencies, and approval processes involved in managing federal funds.
Gubernatorial oversight of federal grants
States adopt different models for how governors participate in federal grant activity. In some states, governors must directly review or approve grant applications, while in others their role is limited to coordination, budget planning, or information-sharing. Many states assign primary authority elsewhere—such as legislatures, agencies, or budget offices—leaving governors without a required approval role.
- Explicit approval: Sixteen states require governors to formally approve grant applications or the acceptance of federal funds, giving them direct authority over whether federal money enters the state system.
- Partial or indirect approval: Sixteen states involve governors in coordination, notification, or budget oversight roles, but do not require them to approve individual grants.
- No explicit approval: Eighteen states assign approval and management responsibilities to agencies, budget offices, or legislatures, leaving governors with no required sign-off role on federal grants.
State legislative oversight of federal grants
States legislatures also vary in the extent of their authority over federal grants, shaped by each state's preferences for fiscal oversight and interbranch control. In some jurisdictions, lawmakers must approve federal applications or spending before funds can be used, while in others their involvement centers on monitoring, reporting, or fiscal review. A smaller number give legislatures no statutory approval role, leaving acceptance of federal funds largely to executive agencies.
- Explicit approval: Seventeen states require legislative bodies—often the full legislature, a fiscal committee, or an emergency board—to formally approve federal grant applications or expenditures, giving lawmakers direct authority over the acceptance and use of federal funds.
- Partial or indirect approval: Twenty-seven states involve legislatures through reporting, notification, fiscal reviews, or ongoing oversight of federal funds, but do not require them to approve specific grants.
- No explicit approval: Six states assign no statutory approval role to the legislature; federal grants are managed and accepted through executive agencies or central budget offices without legislative sign-off.
State agency oversight of federal grants
States differ in how much responsibility they assign to agencies for managing federal grants, reflecting broader administrative and budgeting structures. Some states concentrate grant oversight in a single statewide agency or budget office, while others distribute tasks such as reporting, coordination, or review across multiple agencies. A minority provide no centralized agency role at all, relying instead on governors, legislatures, or auditors.
- Centralized agency oversight: Twenty-five states give a single statewide administrative or budget office primary responsibility for coordinating, reviewing, or managing federal grant activity across agencies.
- Distributed or limited agency oversight: Fifteen states assign reporting or oversight duties to multiple agencies without designating a central coordinating authority.
- No defined agency oversight role: Ten states do not assign a central agency any specific grant-management responsibilities.
State public oversight of federal grants
Public transparency requirements for federal grants differ considerably across states, reflecting varied approaches to openness, accountability, and public engagement. Some states require public access to grant information through hearings, online postings, or searchable databases, giving residents a direct view into how federal funds are used. Others provide only limited transparency, and many do not mandate any public-facing disclosure of federal grant activity.
- Strong public oversight: Nine states require public hearings, searchable databases, online posting of grant agreements, or other transparency tools that give the public direct access to federal grant information.
- Limited public oversight: Two states provide some public-facing disclosures—such as published financial reports or audited summaries—but do not require comprehensive public transparency or public input.
- No defined public oversight: Thirty-nine states do not mandate public reporting, public access, or public hearings related to federal grant activity.
State contingency plans for federal grants
States differ widely in whether they require agencies to prepare contingency plans for potential reductions or loss of federal funds. A small number of states have statutes requiring agencies to draft formal plans, submit mitigation strategies, or manage program adjustments when federal funding is reduced or denied. Most states, however, have no statutory requirement for contingency planning, relying instead on existing budget, audit, or reporting processes.
- Mandatory contingency plans: Four states require agencies to prepare contingency plans or take specific actions when federal funds are reduced or denied.
- No mandatory contingency plans: Forty-six states do not require agencies to develop contingency plans for the loss of federal funds.
State-by-state oversight of federal grants
This section provides access to all 50 state pages on federal grant oversight. Select a state to see how it reviews, approves, and manages federal funding through its statutes, executive procedures, legislative processes, and reporting requirements.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
See also
- Federalism by the numbers
- Federalism
- Unfunded Mandates Reform Act
- Regulatory mandate
- Interlocking (cooperative) federalism
External links
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 U.S. Census Bureau, "2023 Annual Survey of State Government Finances: Historical Tables", accessed July 11, 2025
- ↑ 2.0 2.1 Every CRS Report, "Impacts of Federal Grants and Other Funds on State and Local Budgets", accessed August 12, 2025
- ↑ 3.0 3.1 U.S. Census Bureau, "2022 Census of Governments, State and Local Government Finance Tables", accessed July 11, 2025
- ↑ U.S. Government Publishing Office, "Budget FY 2025 – Table 12.3 – Total Outlays for Grants to State and Local Governments by Function, Agency, and Program: 1940–2024", accessed July 16, 2025
- ↑ [https://law.justia.com/codes/indiana/title-4/article-3/chapter-24/section-4-3-24-7/ Justia, "Indiana Code § 4-3-24-7"]
- ↑ 6.0 6.1 6.2 6.3 6.4 6.5 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ Justia, "Indiana Code § 4-3-24-7"
- ↑ BillTrack50, "Indiana Code 4-12-19"
- ↑ [https://law.justia.com/codes/indiana/title-4/article-3/chapter-24/section-4-3-24-5/ Justia, "Indiana Code § 4-3-24-5"]
- ↑ [https://law.justia.com/codes/indiana/title-4/article-3/chapter-24/section-4-3-24-6/ Justia, "Indiana Code § 4-3-24-6"]
- ↑ BillTrack50, "Indiana Code 4-12-19"
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