Final answer:
Agencies providing grant money for specific projects typically issue categorical grants with strict use and oversight guidelines, or block grants which allow more flexibility. These grants help to fund services for public benefit and have conditions that must be met.
Step-by-step explanation:
Agencies wishing to provide grant money for specific projects would usually issue a categorical grant, a federal transfer that is formulated to limit recipients' discretion in the use of funds and subject them to strict administrative criteria. These criteria dictate the terms and conditions that state governments must meet to qualify for financial assistance in a specific policy area, such as education, road construction, or urban renewal. For example, Medicaid and the food stamp program are provided as categorical grants, which often require commitment of matching funds from the recipients.
Another option for agencies is the block grant, which comes with less stringent federal administrative conditions and offers recipients more flexibility over how to spend grant funds. Examples of block grants include the Workforce Investment Act program and the Surface Transportation Program.
Agencies aim to secure funding that will benefit residents by obtaining monies allocated by the government and using them to provide crucial public services. If grant money is not spent correctly, it may need to be repaid to the federal government.