In a Federal System, State Governments Retain Sovereignty, Which Prevents

In a federal system, state governments retain sovereignty, which prevents the federal government from directly interfering in the fiscal matters of states, even given the amount of money states receive in federal aid.However, state governments can become directly involved in the fiscal matters of local governments.Why is this the case?

A) The U.S.Constitution was amended to increase the power of states over local matters.
B) The U.S.Constitution explicitly gives states the right to intervene in local affairs.
C) Local governments are not recognized by the U.S.Constitution.
D) Congress passed a law allowing the states to intervene in local affairs.