Certified Government Financial Manager (CGFM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

Formula grants are typically determined by specific formulas that consider various quantitative factors such as population size and poverty levels. This method ensures that funding is allocated systematically and fairly to meet the needs of different communities or populations. The formula may incorporate data on demographic characteristics, economic indicators, or other relevant metrics to arrive at a funding amount that reflects the specific requirements of the area or population being served.

This approach contrasts with other methods of grant determination, which might rely on legislative discretion, competitive application processes, or geographic prioritization. Those methods do not utilize the systematic, data-driven approach that formula grants entail, which is a hallmark of their design aiming for equity and targeted support based on identified needs within different communities.