Program Income is income earned that is directly generated by a sponsored project. It must be accounted for in accordance with the sponsors terms and conditions and reported to the sponsor.
What is Program Income?
Program income includes but is not limited to:
- income from fees for services performed
- the use or rental of real or personal property acquired under federally-funded projects
- the sale of commodities or items fabricated under an award
- license fees and royalties on patents and copyrights
Program income does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them, unless required in the terms and conditions.
Non-federal and State of California awards are not required to account for program income unless specified in the sponsor's terms and conditions.
Program income is not discussed in FAR for Federal Contracts.
Program Income Accounting
Program Income is treated in one of three ways depending on policy, sponsor type, and/or terms and conditions of award:
- Additive: Program Income funds are added to available funds, thus increasing the amount available to accomplish program objectives
- Deductive: Total funds available to the project remain the same and the funds generated through Program Income are deducted from the financial commitment of the sponsor
- Matching: Program Income is used to finance the non-federal share of the project
The additive method applies to research awards by default unless the awarding agency specifies another alternative. For non-research awards, alternative 2 applies unless the awarding agency specifies to the contrary in its regulations or in the award.
Agency Specific Guidance
|Sponsor||How Program Income is treated|
|NIH||Expanded Authorities may use the additional costs alternative for the use of general program income unless regulations or the NGA specify another alternative or a combination of alternatives.|
|NSF||Standard treatment-unless otherwise specified in the grant, program income received or accruing to the grantee during the period of the grant is to be retained by the grantee, added to the funds committed to the project by NSF, and thus used to further project objectives. See section 750 of the website for more detail.|
|NASA||Treatment of program income not specified but circular A-110 is included in the grants terms and conditions.|
|Office of Naval Research (ONR)||Treatment of program income not specified but circular A-110 is included in the grants terms and conditions. See websites below for more detail.|
|Air Force||Unless the agency-specific requirements of the award specify otherwise, the additive method shall be used for disposal of program income. See general terms and conditions on website for detail.|
|Defense Advanced Research Projects Agency (DARPA)||Program income earned during the project period shall be retained by the Grantee and shall be deducted from the total project or program allowable cost in determining the net allowable cost on which the Government's share of costs is based. See Section 8 of website for more detail.|
|Department of Energy (DoE)||None specified; however, circular A-110 is included in the terms and conditions.|
|Department of Education (grants)||In keeping with the current government wide policy of reducing unnecessary regulatory and administrative burdens on grantees, all grantees may automatically exercise any combination of the various options for using program income.|