Capital Grant - Federal/State Capital Grant for Infrastructure Project
Recording a federal or state capital grant in the Capital Projects Fund, recognized when eligibility requirements (incurring the capital expenditure) are met under GASB 33.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Grant Receivable - Capital (Federal Highway / FHWA) | Asset (+) | 4,200,000.00 | - |
| Capital Grant Revenue - Intergovernmental | Revenue (+) | - | 4,200,000.00 |
💡 Accountant's Note
Capital grants (e.g., FHWA road construction grants, HUD CDBG-DR, FEMA Hazard Mitigation) are recorded in the Capital Projects Fund when qualifying capital expenditures are made. In governmental funds (modified accrual), the capital outlay is an Expenditure (not capitalized), and the corresponding grant revenue offsets it. At the government-wide level, the expenditure becomes a Capital Asset (capitalized) and the grant revenue flows to the Statement of Activities. The different treatment between fund and government-wide statements creates the largest reconciling item between the two.
Practitioner & Systems Framework
💻 ERP Architecture
Track capital grants separately in the Capital Projects Fund by project number. The project should have a budget showing total project cost, federal share, state share, and local match. FHWA and similar programs reimburse on a percentage basis (e.g., 80% federal / 20% local match) — the billing must match qualifying project expenditures.
⚠️ Audit Flags
Capital grants are subject to federal Single Audit requirements if total federal expenditures exceed $750,000. The SEFA must include capital grant expenditures even though the underlying asset is on the government-wide statements. Local match requirements must be documented and verified.
📄 Required Documentation
Grant agreement with federal/state agency, project budget with funding sources, capital expenditure invoices and contracts, pay estimates (for construction), FHWA billing documentation, local match documentation, SEFA entry.
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