Program income is defined as gross income generated by a supported activity or as a result of the award. Examples of program income include:
· Sale of goods or services fabricated under the award
· Rental revenue generated from the use of property acquired under the award
· Fees for services that use equipment/facilities supported by the award
· Registration fees from conferences/workshops held as part of the award
· Tuition revenue from classes created as part of the award
· Fees from royalties and copyrights acquired as a result of the award
Program Income does not include:
- Discounts, rebates, credits on purchases made for the award
- Interest from advances of Federal funds
- Interest on late payments by the Federal sponsoring agency
- Program income received after the end of the award period
Treatment of Program Income
Program Income is treated either deductive from the federal award (i.e. NSF Conference Grants) or additive to the award to further project objectives (i.e. NSF Research Grants). If the treatment of program income is not provided in the award terms and conditions, it must be confirmed with the program financial officer at the awarding agency.
Expenditure of Program Income
Program income funds can be used for allowable and allocable project costs. Anything that can not be charged to the main award can not be charged to the program income funds. Unused funds may need to be returned to the federal awarding agency unless otherwise approved.
Potential Audit Findings
· Failure to track and account for program income funds
· Program income funds not reported to the awarding agency
· Misuse of program income funds on unallowable expenses
· Funds (cash) transferred or deposited to departmental/discretionary accounts
Methods for Managing Risk
· Identify potential project activities that may generate program income at the proposal stage or during the project period.
· Once the potential for program income is identified, work with the Office of Grants & Contracts to set up a separate project to account for the income and expenses.
· Disclose program income to the awarding agency and establish proper treatment for when the project is active as well as after the end of the project period.