CFR 200.80 defines program income as gross income earned by the University that is directly generated by a federally sponsor-supported activity or earned as a direct result of a federal sponsored project during the period of performance.
Includes, but is not limited to:
- Fees earned from services performed under a project, such as laboratory tests
- Sale, rental, or usage fees, such as fees charged for the use of computing or laboratory equipment purchased with grant funds
- Funds generated from the sales of commodities and research materials, such as tissue cultures, cell lines and research animals
- Conference fees charged when a grant funds a conference
- Funds generated from the sale of items fabricated under the award
Unless otherwise specified in the awarding agency regulations or terms of the award, program income does not include:
- Interest earned on advances of federal funds
- Income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks and inventions produced under an award.
- Income earned after the end of the period of performance.
CFR 200.307 identifies the requirements related to program income. As summary:
- Non-federal entities are encouraged to earn income to defray program costs where appropriate.
- Costs related to the generation of program income may be deducted from gross income as long as the costs were not directly charged to the Federal award.
- Sale of property, equipment, or supplies are not considered program income, but requirements of 200.311, 200.313 and 200.314 apply.
- If the Federal awarding agency does not specify in its regulations or the terms and conditions of the Federal award, or give prior approval for how program income is to be used, then the Addition method is used. Methods include:
- Deduction: Program income is deducted from total allowable costs to determine net allowable costs. This will reduce the amount of the Federal award.
- Addition: Program income is added to the Federal award. This will increase the amount of the Federal award.
- Cost Sharing or Matching: Program income is used to meet cost sharing or matching requirements. The amount of the Federal award remains the same.
CFR 200.305(b)(5) requires that the University disburse funds available from program income before requesting additional cash payments from the sponsor.
Policy & Procedure:
Each department is responsible for ensuring that any program income related to a Federally funded sponsored project in their unit is identified and tracked according to the Federal requirements (identified above) and this policy. University recharge/service center policy also applies.
The PI and/or their delegate will notify Grant Accounting as soon as an activity that will result in program income is identified. Program income revenues along with any costs associated with generating the program income will be tracked in a unique General Ledger account (WhoKey). New program income accounts are requested using the Request for General Ledger Chartfields & WhoKeys (CF/WK) application which is available to all GLDSS online users in Self Service – Administration – System. Any program income balance (revenue less expense) must be used, depending on the applicable method, as follows:
- Deductive: the amount of the sponsored project is reduced by the program income amount. Expenditures, equal to the program income balance, that would have been charged to the sponsored project are charged to the program income account instead.
- Additive: the amount of the sponsored project remains unchanged. The program income balance is used to fund expenditures that would be otherwise allowable on the sponsored project, but are in addition to the expenditures funded by the sponsored project.
- Cost Sharing: the amount of the sponsored project remains unchanged. The program income balance is used to fund expenditures that are used to meet the cost share commitment of a sponsored project. See University Cost Share policy.
Regardless of the method, program income funds should be used before sponsored project funds. To accomplish this, expenditures should be charged against the program income account balance before charging the sponsored project account.
If any funds are remaining in the program income account after the project has terminated, the remaining funds will be returned to the sponsor.
On an annual basis, Grant Accounting will submit a Program Income Reporting Worksheet to NSF in order to report program income earned and expended for any NSF grants.
For most other Federal agencies, Grant Accounting will report program income on the interim and final FFR reports submitted as required.
Last updated: 8/29/2018