Special Funds

Special funds are federal fund accounts for receipts earmarked for specific purposes and for the expenditure of these receipts.

A special fund is not the same as a trust fund; the latter is considered a fiduciary fund for governmental accounting purposes.

One of the best known examples is the Federal Highway Fund, which is funded by the gasoline tax. As the gasoline tax is earmarked specifically for building and maintaining roads, state and local governments receiving money from the Fund must account for these receipts separately from the General Fund and can only use that money for that purpose.

Failure to properly account for or use the proceeds of a special fund for the intended purpose may result in the government being required to reimburse the fund for the unauthorized expenditure.