The following kinds of expenditures do not count:

1. (a) Expenditures of funds that originated with the Federal government;
2. (b) State expenditures under the Medicaid program under title XIX of the Act;
3. (c) Expenditures that a State makes as a condition of receiving Federal funds under another program that is not in Part IV-A of the Act, except as provided in § 263.3;
4. (d) Expenditures that a State made in a prior fiscal year;
5. (e) Expenditures that a State uses to match Federal Welfare-to-Work funds provided under section 403(a)(5) of the Act; and
6. (f) Expenditures that a State makes in the TANF program to replace the reductions in the SFAG as a result of penalties, pursuant to § 264.50 of this chapter.

[71 FR 37481, June 29, 2006]