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Overview
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Federal regulation encourages Federal financial assistance recipients to earn income from award activities as a means to help leverage funds. This income, termed 'program income' must be properly accounted for, reported on the Federal Financial Report, and must be used in the manner approved in the Federal award.
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2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
§200.80 1 Program income.
Program income means gross income earned by the non-Federal entity recipient or subrecipient 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 paragraph (f). (See §200.77 Period of performance.) .
Program income includes, but is not limited, to income from fees for services performed, the use or rental or of 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, and principal and interest on loans made with Federal award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in Federal statutes, regulations, or the terms and conditions of the Federal award, program income does not include rebates, credits, discounts, and interest earned on any of them. See also §200.407 Prior written approval (prior approval). See also 35 U.S.C. 200-212 “Disposition of Rights in Educational Awards” applies to inventions made under Federal awards.
[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75880, Dec. 19, 2014]
§200.307 Program income.
(a) General. Non-Federal entities are The recipient or subrecipient is encouraged to earn income to defray program costs where when appropriate.
(b) Cost of generating program income. If authorized by Federal regulations or the Federal award, costs incidental to the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the Federal award.
(c) Governmental revenues. Taxes, special assessments, levies, fines, and other such revenues raised by a non-Federal entity are not program income unless the revenues are specifically identified in the Federal award or Federal awarding agency regulations as program income.
(d) Property. Proceeds from the sale of real property, equipment, or supplies are not program income; such proceeds will be handled in accordance with the requirements of Subpart D—Post Federal Award Requirements of this part, Property Standards §§200.311 Real property, 200.313 Equipment, and 200.314 Supplies, or as specifically identified in Federal statutes, regulations, or Program income must be used for the original purpose of the Federal award. Program income earned during the period of performance may only be used for costs incurred during the period of performance or allowable closeout costs. Program income must be expended prior to requesting additional Federal funds. Program income exceeding amounts specified in the Federal award may be added to or deducted from the total allowable costs in accordance with the terms and conditions of the Federal award.
(eb) Use of program income. If the Federal awarding agency does not specify in its regulations or There are three methods of applying program income: deduction; addition; and cost-sharing. The Federal agency should specify what program income method(s) will be used in the terms and conditions of the Federal award, or give prior approval for how program income is to be used, paragraph (e)(1) of this section must apply. For Federal awards made to IHEs and nonprofit research institutions, . The deduction method will be used if the Federal awarding agency does not specify in its regulations or the terms and conditions of the Federal award how program income is to be used, paragraph (e)(2) of this section must apply. In specifying alternatives to paragraphs (e)(1) and (2) of this section, the Federal awarding a method for applying program income. When no program income method is specified in the Federal award, prior approval is required to use the addition or cost sharing methods. However, the addition method will be used when no method is specified for awards made to institutions of higher education (IHE) and nonprofit research institutions. In specifying alternatives to the deduction and addition methods, the Federal agency may distinguish between income earned by the recipient and income earned by subrecipients and as well as between the sources, kinds, or amounts of income. When the Federal awarding agency authorizes the approaches in paragraphs (e)(2) and (3) of this section, program income in excess of any amounts specified must also be deducted from expenditures.
(1) Deduction.
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Program income
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is deducted from the total allowable costs
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, reducing the overall total amount of the Federal award.
(2) Addition.
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Program income is added to the total allowable costs, increasing the overall total amount of the Federal award.
(3) Cost sharing
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. Program income is used to meet the Federal award's cost sharing
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requirement
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.
(fc) Income after the period of performance. There are no Federal requirements governing the disposition of program income earned after the end of the period of performance for of the Federal award , unless stipulated in the Federal awarding agency regulations or the terms and conditions of the Federal award provide otherwise. The Federal awarding agency may negotiate agreements with recipients regarding appropriate uses of income earned after the end of the period of performance as part of the grant closeout process. See also §200.343 Closeout.
(d) Cost of generating program income. If authorized by Federal regulations or the Federal award, costs incidental to generating program income may be deducted from gross income to determine program income, provided these costs have not been charged to the Federal award.
(e) Not considered program income. The following are not considered program income unless specified in Federal statutes(g) Unless the Federal statute, regulations, or the terms and conditions for of the Federal award provide otherwise, the non-Federal entity has no obligation to the Federal awarding agency with respect to program income earned from license :
(1) Governmental revenues. Taxes, special assessments, levies, fines, and similar revenues the recipient or subrecipient raised.
(2) Property. Proceeds from the sale of real property, equipment, or supplies. The proceeds must be handled in accordance with the requirements of the Property Standards of §§ 200.311, 200.313, 200.314, or as explicitly identified in Federal statutes, regulations, or the terms and conditions of the Federal award.
(3) License fees and royalties. License fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions made under
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the Federal award subject to
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.
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Frequently Asked Questions
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Resources
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References
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