Program Income

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.


Questions about this topic can be answered by:

Charlton, Jesse

Sr. Accountant, Office of Research Financial Compliance and Services

Research Financial Compliance & Services - Mgmt & Adm

(650) 723-9102

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.

Federal Contracts

Program income is not discussed in FAR for Federal Contracts.

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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.

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