Earned federal funds are amounts received in connection with each entitlement period of a federally funded contract, grant or program, excluding reimbursements, not required by the governing agreement to be disbursed.

These typically arise from recovery of costs previously paid from a non-federal source, interagency contracts paid from another agency's federal funds, interest earned on federal funds, and sources such as sale of fixed assets purchased with federal funds. Except for institutions of higher education and their affiliates, expenditure of earned federal funds is limited to appropriation authority granted an agency. 

Indirect cost recoveries should not be included in deposits using this code. For deposit of federal indirect cost recoveries, use revenue code 3726.