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The Challenge of Unspent Federal Grants

Jenna DeAngelo, Betsy Gardner, and George W. McCarthy

January 2022, English

There is a fervent need for federal grant money to be spent appropriately and for its intended purpose. However, constrained local capacity coupled with longstanding, inflexible, federal legislation and rules make it difficult for localities to implement programs and provide critical services. This report takes a deep look at the intergovernmental transfer system in the United States to shed light on the phenomenon that millions, possibly billions, of federal grant money is left unspent each year. We discuss why this occurs and conclude with policy recommendations to ensure that federal grant dollars are utilized to their fullest potential


Local Government, Municipal Fiscal Health, Public Finance, Public Policy