Assignment of Grant Funds

Q.  We are considering financing via a lease 100% of the cost of buses to a transit authority that has received approval of a 5307 formula grant related to this capital outlay.  Can the formula grant funds be pledged to us by the authority as a source of repayment?

A.  Generally, a grantee cannot commit funds to a third party without FTA approval.  The transit agency should seek pre-approval from the appropriate FTA Regional Office. (Posted: March 2009).