Financial allocation to local governments by the federal or the state government to supplement the cost of a project is called_____

Step 1: Analyze the question The question asks for the term describing money given to local governments by the federal or state government to supplement (add to) the cost of a project.

Step 2: Explain the concepts Here is what each option means:

• Revenue allocation: The general sharing of national revenue among the tiers of government (federal, state, local). It is not tied to a particular project.
• Reimbursement: Paying back money that has already been spent. It is not a supplement to a project's cost.
• Statutory allocation: The fixed amount that the constitution or law says each tier of government must receive from the Federation Account. It is a regular entitlement, not a project supplement.
• Matching grant: Money a higher level of government gives to a lower level to help fund a specific project. The receiving government must contribute its own share, so the grant "matches" or supplements what it puts in.

Step 3: Apply to the question The key phrase is "to supplement the cost of a project." That means the money is project-specific and added on top of what the local government already contributes. This is exactly what a matching grant is.

Step 4: Answer The correct option is **D.

Tip: Remember "matching = my share + your share." If the question mentions supplementing a project's cost, think matching grant. If it mentions a fixed constitutional share, think statutory allocation.