These receipts originate from the state's participation in education programs financed in part by federal funds that are matched with cash from state and/or other funds as direct rather than "in kind" service costs. This code reflects receipts that may be used either for operating expenses or for capital expenditures at the discretion of the agency. See code 3837 for year-end adjustment to classify federal grants restricted to capital expenditures of the program.

This code will be recorded as non-operating in proprietary funds and as operating -- capital grants and contributions in the government-wide financial statement.

This code excludes earned federal funds and indirect cost recoveries (see revenue codes 3702 and 3726).