Indiana 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 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 September 2025.

HIGHLIGHTS

In fiscal year 2023, 40.4% of Indiana’s total state revenue came from intergovernmental sources—primarily federal grants—the 16th-highest share nationwide. The state received approximately $25.1 billion in federal funds, the 14th-highest total.

Indiana law centralizes federal grant oversight in the state’s Budget Agency, which must report annually to the Governor of Indiana and Indiana State Legislature, approve all agency applications for federal assistance, coordinate biennial reviews of federal programs, and ensure that new federal funds do not impose unfunded obligations on the state.

This article includes information about the following topics:

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

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

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 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. 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 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. 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.

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

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 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.

Indiana § 4-3-24-7(d) requires that the Indiana Budget Agency submit its annual federal assistance report directly to the governor.

“ Sec. 7. (a) The budget agency shall each year publish an annual report summarizing the federal assistance received by state agencies during the preceding federal fiscal year, including: ... (d) The budget agency shall submit the annual report to the governor, to the members of the United States Congress representing Indiana, the budget committee, the interim study committee on fiscal policy, and (in an electronic format under IC 5-14-6) to the legislative council. ”

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.

“ The budget agency shall submit the annual report to the governor, to the members of the United States Congress representing Indiana, the budget committee, the interim study committee on fiscal policy, and … to the legislative council. ”

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.

“ A state agency shall provide a report to the budget committee not later than January 1, April 1, July 1, and October 1 of each year that details the requests for new federal funds or to participate in a new federal program submitted by the state agency since the date of the state agency’s last report. ”

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.

“ A state agency may not (1) apply for federal assistance; (2) accept federal assistance; (3) submit or accept amendments for federal assistance; or (4) make expenditures with state funds in anticipation of federal assistance; unless the state agency has received approval to do so from the budget agency. ”

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.

“ A state agency that receives federal funds must develop, in coordination with the budget agency, a comprehensive federal assistance review plan … evaluating how Indiana could use federal funds more effectively without federal constraints … and identifying recommendations to use federal funds more effectively. ”

Indiana § 4-12-19-4(b) restricts acceptance of new federal funds that impose unfunded obligations on the state.

“ A state agency may not accept an award of new federal funds if acceptance … requires a state match of funding, would require additional permanent full-time employees, or would mandate new requirements that must be met by the state of Indiana. ”

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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