According to the Community Tool Box, public funds are funds that come from the public treasury. It is revenue generated from tax payments, and it is used to fund things that benefit the public, including health, human service, environmental development, community development and other public service programs.
Public funds are used for the common good of society rather than the benefit of a private individual or for a private purpose. Even though public funds may not be used for personal benefit, there are personal benefits that may result from the expenditure of public funds. One personal benefit of the expenditure of public funds is the salary of a public employee. The public employee personally benefits from the payment, but the payment is necessary to acquire the services of the individual that is providing a service for the benefit of the public. Public funding comes from federal, state or local government channels.