Which statement describes direct grant funding?

• A. Direct grants are awarded directly to subrecipients by the federal government.
• B. Direct grants pass through the state to subrecipients.
• C. Direct grants are loans that must be repaid.
• D. Direct grants go directly to the state for use.

Answer: (D)

Direct grant funding means the grant is awarded directly to the state by the funding agency to use in carrying out the program. The defining idea is that the initial recipient is the state, which then administers the funds and, under its oversight, may distribute money to subrecipients as allowed. It’s not a loan, so repayment isn’t required. It’s also not funds that go straight to subrecipients, nor funds that pass through the state to subrecipients in a pass-through arrangement.