Yes, no shit it's heavily regulated. Obviously you can't directly pay a gender studies prof with a research grant from the Env Sci prof. But the school takes their cut off the top for indirect costs, that number is usually 50-60%. Some of those indirect costs are legit - maintenance staff, electricity, etc. But there is a giant black hole of fuckery that can and does happen where the money for those indirect costs doesn't go to the program that was awarded that money. If you think otherwise you are naive and completely blind to the corruption that infects our Universities. Also those regs only apply to Federal funding, private funding agencies can attach their own strings, or none at all.