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Guidelines for Program Income on Sponsored Projects 


Purpose

To provide guidance to Principal Investigators (PIs) and research administrators who manage sponsored projects about the identification of and proper treatment of program income.

Applicability

Principal Investigators (PIs), Financial Officers and Research/ Departmental Administrators, Grants and Contracts Accounting Analysts and/or any other administrators managing sponsored projects.

Background

The federal government expects universities to comply with Uniform Guidance regulations regarding the identification of and the proper treatment of program income.  Per 2 CFR 200.1, program income is defined as gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance except as provided in § 200.307(f).

Program income includes but is not limited to:

  • income from fees for services performed,
  • the use or rental or real or personal property acquired under Federal awards,
  • the sale of commodities or items fabricated under a Federal award,
  • license fees and royalties on patents and copyrights,
  • principal and interest on loans made with Federal award funds.

Program Income does not include:

  • Interest earned on advances of Federal funds.
  • rebates, credits, discounts, and interest earned on any of them.

Treatment of Program Income 

Program income earned during the project period shall be retained by the recipient (in other words, not immediately remitted to the awarding agency) 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 following ways: 

  1. Additive. Added to funds committed to the project by the federal awarding agency and recipient and used to further eligible project or program objectives.   
  1. Deductive. Deducted from the total project or program allowable cost in determining the net allowable costs on which the federal share of costs is based.   
  1. Cost Sharing or Matching. Used to finance the non-federal share of the project or program; the use of program income in this manner requires prior approval of the federal awarding agency. 

For Federal awards, the additive method automatically applies unless the agency specifies otherwise. 

For program income generated under non-federal awards the additive method applies unless the agency specifies otherwise.

Policy Guideline Created: August 15, 2024
Questions? Contact Grants and Contracts Administration or 940.565.3940
Read the full policy: UNT Policy Guidelines for Program Income