Effective: October 21, 2009
Owner: Office of Sponsored Programs
Program Income from Federal Grants and Contracts
The purpose of this procedure is to assist University Principal Investigators and departmental administrators in understanding the regulations and guidelines concerning program income derived from federal sponsored programs. The University is required to report program income from Federal Grant Sources. This procedures documents established practices.
Program Income – Program income is defined as revenue earned by grantees, consortium participants, or contractors under a federal grant. This revenue is either directly generated by the grant-supported activity or earned as a result of the award. Many federal agencies require grant applicants to list anticipated amounts and sources of program income, and grant recipients to report and account for such income.
Examples of program income may include, but are not limited to:
· Income from fees for services performed. Fees might include income generated from University centers such as the following:
o Money generated from the use, sale, or rental of equipment purchased with project funds.
o Proceeds from the sale of supplies or equipment purchased or fabricated with project funds.
o Fees from participants at conferences, including registration, publications, proceedings, etc.
o Funds generated form the sale of research materials, such as animals, research tools, reagents, and license fees.
Unless otherwise specified in the terms of the award, program income does not include:
· The receipt of principal on loans, rebates, credits, discounts, or interest earned on these.
· Interest earned on advances of federal funds.
· Third-party in-kind contributions.
System References [Top]
· OMB Circular A-110 (Section .24, Program Income) http://www.whitehouse.gov/omb/rewrite/circulars/a110/a110.html#24
Principal Investigator – The Principal Investigator, with departmental administrative support, is responsible for ensuring that generated program income, as a result of sponsored projects, is properly used, accounted for, and reported. Principal Investigator is responsible for requesting an account to document the receipt of income.
Office of Sponsored Programs – The Office of Sponsored Programs is responsible for overseeing the reporting of program income generated during the performance of the grant in accordance with sponsor guidelines in such communications as Financial Status Reports (FSR’s). Upon receipt of an SP-23 from a department requesting a program income account the Office of Sponsored Programs will create an account and associate it with the federal account generating the program income.
· Principal Investigators
· Research Administrators
· Fiscal Administrators
· OSP Accountants
The Assistant Vice President for Research Administration in the Office of Sponsored Programs is responsible for ensuring that this procedure is necessary, reflects actual practice, and supports University policy.
Procedure Steps [Top]
Use of Program Income
Per OMB Circular A-110 (Section .24, Program Income), program income shall be retained by the recipient and, in accordance with Federal awarding agency regulations or the terms and conditions of the award, shall be used in one or more of the ways listed in the following:
Option 1 (Additive Alternative)
· Added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives.
Option 2 (Matching Alternative)
· Used to finance the non-Federal share of the project or program.
Option 3 (Deductive Alternative)
· Deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share of costs is based.
Agency regulations or the terms of the award normally specify the option to be used. If the awarding agency does not specify, the Office of Sponsored Programs will always choose the ADDITIVE method for reporting.
Program Income Accounts
Principal Investigator should request an account to document the generation of program income using the SP-23 form.
Upon receipt of the SP-23 the Office of Sponsored Programs will create an account and associate it with the federal award generating the program income.
The University is required to report program income generated during the performance of the sponsored project. The Principal Investigator, with departmental administrative support, is responsible for ensuring that generated program income, as a result of sponsored projects, is properly used, accounted for, and documented for reporting.
The Office of Sponsored Programs has oversight for reporting program income generated during the performance of the grant in accordance with sponsor guidelines in such communications as Financial Status Reports (FSR’s).
Reporting Exceptions and Special Handling
Unless otherwise noted in the terms and conditions of the award or in the awarding agency guidelines and regulations the Government does not require reporting of the following types of income as program income:
· Income resulting from licensing fees and/or royalties from copyrighted material, patents, patent applications, trademarks and inventions produced under an award.
· Income earned after the end of the grant or contract project period.
The source of these reporting and accounting requirements can be found in OMB Circular A-110 (Section .24, Program Income) and in 45 CFR 74.24.
End of Activity
by University Comptroller
© 2001 by the Rector and Visitors of the University of Virginia. All rights reserved.