Use of Federal Grants. Any federal grant that is received for an eligible project shall be applied first to the cost of the project. Community development block grants are considered as local matching funds and are not considered as federal grant funds. All other sources of funds shall be expended before any or all of the State grant is expended on an approved project. Limits of State Grant. Except as provided in §D of this regulation, a State grant may not exceed 50 percent of the cost of eligible work remaining unpaid after all federal grants have been applied. A State grant may not be used to fund participation in retroactive expenditures. A State grant may include only those costs incurred or obligations contracted for eligible work after the application has been approved by the Secretary. State grant funds may not be used to pay the following costs: Noncapital equipment; Consultant services; or Off-site improvements. Exceptions on State Grant Limits. A project designated as eligible for poverty area funding under §D of this regulation may receive a State grant to cover up to 75 percent of the cost of eligible work remaining unpaid after all federal grants have been applied. Poverty Area Funding. An applicant is eligible for poverty area funding for a facility if: The project is designated as eligible for poverty area funding under applicable federal regulations and State plans or Departmental regulations; and The majority of individuals served by the facility: Are certified by a local department of social services as eligible for General Public Assistance or Medical Assistance; Are eligible for Supplemental Security Income benefits; or Have income levels which do not exceed 150 percent of the federal poverty level. Funding Contribution Requirements. The grantee shall provide, from other sources, funds equal to the total cost of the eligible project less the State grant award. The grantee shall assume the risk of all costs associated with the project that are incurred before the date of approval of a State grant award by the Board of Public Works. A grantee may not expend the State grant award before other sources of funds are expended. The Department may not consider as contributions: Real or personal property; In-kind contributions; or Funds expended before an application is approved by the Secretary. A grantee may not use a project funded by a State grant primarily: For the furtherance of sectarian religious instruction or services; As a place of sectarian religious worship or instruction; In connection with any program or department of divinity for any religious denomination. Upon the request of the Board of Public Works, the grantee shall submit evidence satisfactory to the Board that none of the proceeds of the grant have been, or are being, used for a purpose prohibited by the Act.