Navajo Tribe v. Ariz. Dep't of Admin
In Navajo Tribe v. Ariz. Dep't of Admin., 111 Ariz. 279, 528 P.2d 623 (1974), federal funds received pursuant to a federal contract were placed into the state's general fund for particular purposes relating to job training and employment projects.
A dispute arose over whether these funds could be expended without specific legislative approval.
The Arizona Supreme Court explained:
Payment of funds into the state treasury does not necessarily vest the state with title to those funds. Only monies raised by the operation of some general law become public funds. Custodial funds are not state monies. The term 'public funds' refers to funds belonging to the state and does not apply to funds for the benefit of contributors for which the state is a mere custodian or conduit. The same is true of the term 'general fund.' This is made clear by the language of ARS 35-142, 'funds receive sic for and belonging to the state.' It is within the power of the legislature to make appropriations relating to state funds, but funds from a purely federal source are not subject to the appropriative power of the legislature. Id. at 280-81, 528 P.2d at 624-25.