Finance and Budget

University Controller’s Office

Program Income

Some sponsored research activities generate income as a result of the work performed. Federal regulations refer to this as program income. Income earned or generated as a result of sponsored research, becomes inclusive of the award and must be expended on award activities. Program Income is subject to the award terms and conditions and must adhere to the Sponsor’s terms and conditions.

Examples of program income include, but are not limited to:

  • The use or rental of property acquired using award funds
  • License fees and royalties on patents and copyrights
  • The sale of commodities or items fabricated using award funding
  • Income from fees received for services performed (i.e: workshops, conferences)
  • Interest on loans made with award funds

Program income revenue may be accounted for in one of three ways (2 CFR 200.307):

 

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.

 

Additive

Program income funds are added to award funds, thus increasing the amount available to accomplish the objectives of the sponsored project.

 

Matching

Program income funds are used to finance the non-sponsor share of the award (mandatory or committed cost sharing).

 

Reporting Program Income

At award close, program income on federal awards is reported to the sponsoring agency on Federal Financial Report Standard Form 425 (SF-425). G&C will base the report on the information provided by the administering department and Banner. The university’s use of program income is subject to audit and may be reviewed for compliance with the award terms and conditions, including allowability of costs.

Termination of the Underlying Project

Program income generated during the project and remaining after the project conclusion must be expended according to the approved alternative. Income generated after the underlying award period is free from sponsor regulations. Income may be expended at the principal investigator’s research-related discretion. A program income pool index may be created to deposit funds received for goods and services of more than one project at the end of the award. Program income funds may not be transferred to another institution unless expressly directed by the sponsor of the award.