Revenue-restricted

Revenue-restricted describes a financial situation or entity where the utilization of collected funds is limited or designated for specific purposes. These restrictions can stem from legal mandates, contractual obligations, or internal policies. This means funds cannot be used freely and must be applied to predetermined activities, projects, or departments. This limitation aims to ensure funds are allocated as intended, promoting financial transparency and accountability within organizations, governmental bodies, or specific initiatives. The restrictions can affect a whole budget, a department, or a discrete project. This often occurs when funding comes from specific taxes, grants, or donations. These restrictions must be clearly defined.

Revenue-restricted meaning with examples

• The city's new park project is Revenue-restricted, solely funded by a local tax on recreational equipment. This means the money collected cannot be diverted to other city services, ensuring the park's development and maintenance. Any excess funds must be reinvested back into the park's amenities and not used for the city's budget. These financial measures are outlined to be transparent for all public records and reviews.
• A non-profit organization received a grant for cancer research; this funding is revenue-restricted. They can only use the money for research expenses such as scientists' salaries, lab equipment, and patient trials. Fundraising expenses are also applicable. Any potential profits from findings must be reinvested to maintain a certain amount of the funds for any new project research.
• The transportation department's budget includes Revenue-restricted funds from gas taxes. This money is designated for road repairs, infrastructure development, and public transportation improvements. Using it for unrelated departments would violate these restrictions. They have to clearly justify any expenses and must do so with complete transparency.
• A university established a Revenue-restricted scholarship fund financed by alumni donations. The money collected can be used only for student scholarships and educational supplies and materials. The fund's earnings are reinvested into providing further scholarships. Funds allocated to anything else is a violation. The university must be transparent.
• A special state fund for environmental cleanup is revenue-restricted. The collected fees from polluters is exclusively allocated for remediating contaminated sites and protecting natural resources. All project spending and resource management is documented in regular financial reports. The funds have explicit limitations.