There are different types of categorical grants that can be awarded. Categorical grants can be project grants, which are awarded competitively, or formula grants, which are distributed based on factors like population size. Categorical grants come with specific directives on how the funds must be used and require detailed reporting. They also can have cross-over or cross-cutting sanctions, where failure to comply with one grant's requirements can impact other federal grants. Project grants tend to be used for physical entities like health clinics. Block grants provide broader support but have less accountability. Some states may reject certain federal grants due to unfunded mandates that require state spending without financial assistance.

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