Federalism

So over the weekend I was talking with my boss a little bit more about the school strikes which resulted when the local districts used the money the had received from the federal government for teacher bonuses on other things. I realized I didn't know why this type of event didn't happen in the United States ... states receive tons on federal government money and as far as I know it almost always goes to what it is directed to ... is this because of contract law? better financial controls, better incentives? the federal government would sue if the states didn't use the money as directed? It sounded like this sort of problem was common in Chile and I imagine it would be common in other developing countries, but I can't imagine a solution being to complicated. Potential here for a thesis project?