A sponsored program is:
- A project, normally in the form of a grant or contract or cooperative agreement
- Funded from external sources including federal, state and local governments or private corporations or foundations
- Award of a contract or grant creates a legal relationship to achieve a purpose or objective under specified conditions
The purpose of the award, the nature of the relationship established and the control exercised by the awarding agency often make a grant indistinguishable from a contract.
However grants, unlike contracts, do not allow for profit or a fee in excess of actual costs. The projects are designated as restricted current funds because separate accounts are mandated for each project. These separate accounts document the receipt and expenditure of such funds for the “restricted” purpose or project for which the sponsor intends.