Program Income

money iconProgram income is defined as gross income earned by the grantee that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance. Program income includes, but is not limited to, income from fees for services performed, income generated from conferences, the use or rental of real or personal property acquired under Federal awards, proceeds from the sale of items fabricated under a Federal award, license fees and royalties on patents and copyrights, and principal and interest on loans made with Federal award funds.

Program income does not include interest earned on advances of Federal awards, proceeds from the sale of equipment, credits, discounts, rebates, and interest earned on any of them, unless otherwise provided in Federal statutes, regulations, or the terms and conditions of the award.

Contracts and Grants Accounting (CGA) records program income under Object Code T008, and is required to report it in the Program Income section of the Federal Financial Report (FFR).

What Do We Do with Program Income?

This depends on what the sponsor specifies in its terms and conditions of the award. Both NIH and NSF default to the additive method for all recipients unless otherwise specified in the award. If a Federal awarding agency does not specify or give prior approval on how program income is to be used, the Uniform Guidance requires that the deductive method must be applied.

  1. Deduction: Program Income is deducted from the total award amount to determine total allowable costs. Program Income in this case is used to reduce the award amount rather than increase funding committed to the project.
  2. Addition: Program Income is added to the total award amount to determine total allowable costs. Program Income in this case is used to increase the funding committed to the project.
  3. Cost-Sharing or Matching: Program Income is used to meet cost sharing or matching requirements. The award amount for the project remains the same.

NSF Proposal & Award Policies & Procedures Guide (PAPPG) states that for the NSF funded grants that include program income, efforts should be made to avoid unexpended program income remaining at the end of the grant, and program income earned during the project period should be expended prior to requesting reimbursement against the grant.

There are no Federal requirements governing the disposition of income earned after the period of performance, unless the award specifies otherwise in the terms and conditions.

Additional Resources