Fiscal Management

Unrestricted Funds Narrative

Unrestricted funds are funds that are not provided by the federal grant award or used to match that award, or are funds that are not considered program income. Funds expended by the program, but not generated using its assets, are not considered program income and are not governed by the cost principles. Depending on how the funds are used, they may or may not be counted as non-federal share. The ways in which unrestricted funds may be used should be guided by the agency's internal fiscal policies. (Program income and non-federal share are defined in the Glossary.)

The list below illustrates various ways an agency can generate unrestricted funds:

  • Have other organizations sponsored activities away from the grantee agency site(s). The funds raised can then be donated to the program and be designated as unrestricted funds.
  • Receive donations from external organizations.
  • Become a beneficiary of an individual's estate upon his or her death.
  • Avoid having Head Start or Early Head Start parents raise funds.
  • Avoid using grantee agency facilities for fund-raising activities.
  • Generate profits from other agency programs that are not publicly funded and do not use any assets of the Head Start or Early Head Start program.

Related narrative discussions on Parent Fund Raising and the Parent Activity Fund are available the Fiscal Community.