Chapter 4: Business & Administration04:10:03 Grant Program Income
Referencing Sources2 CFR 200.12 CFR 200.307
To ensure compliance with federal program income requirements, including identification in the College’s accounting system, appropriate usage, and reporting requirements.
This policy does not apply to revenue generated through programs funded by sources other than grants, such as performing arts programs funded by private gifts.
- PROGRAM INCOME (2 CRF 200.1): Gross income earned by the grantee that is directly generated by a grant-supported activity or earned as a result of the grant award during the period of performance.
- To the extent practicable, anticipated program income should be identified in grant proposals, if required by funding agency guidelines.
- If program income is anticipated during the proposal development process, the College’s Finance and Accounting staff will be notified and invited to participate in proposal and budget development.
- Program income earned during the grant performance period shall be retained by the College and, in accordance with funding agency regulations or award terms and conditions, shall be used in one or more of the following ways:
- Additive: Added to the funds committed to the project by the funding agency and the grantee and used for the purposes and under the conditions of the award;
- Matching: Used to meet cost-sharing or matching requirements of the grant award with prior approval;
- Deduction: Deducted from the total allowable cost to determine the net allowable costs, effectively reducing the amount to be reimbursed by the funding agency.
The Additive method should be used unless funding agency regulations or the terms and conditions of the award specify otherwise.
- Examples of Program Income
- Income from fees for services performed;
- Funds generated from the use or rental of real or personal property acquired under awards (including supplies and equipment);
- Proceeds from the sale of commodities or items fabricated under an award;
- Fees from participants at conferences or symposia;
- Proceeds from the sale of publications or software; and
- License fees and royalties on patents and copyrights related to research project funded by a grant award.
- Program income does NOT include rebates, credits, discounts, and interest.
- Program income does NOT include interest earned on advances of grant funds.
- Accounting for Program Income The College’s Finance and Accounting staff should be notified as early as reasonably possible when a grant project is expected to generate program income. All income generated as a direct result of a grant-funded activity shall be deemed program income and identified as such in the College’s accounting system.
- Program income must be used for the purposes and under the conditions applicable to the grant award.
- Unless specified by the funding agency, program income should be expended as soon as possible after it is earned. Every effort should be made to expend program income prior to the end of the fiscal year. In general, program income should be used before expenses are reimbursed by the funding agency.
- Program income should be applied to costs that are considered allowable expenses under the grant program. Expenses considered unallowable under the grant award shall also be unallowable for program income.
- The College shall apply funding agency program income requirements to sub-recipients.
- Program income shall be reported in accordance with the requirements of individual funding agencies.
Unless funding agency regulations or the terms and conditions of the award provide otherwise, the College shall have no obligation regarding income earned after the end of the performance period. Program income earned after the end of the performance period may be used at the College’s discretion, with priority given to costs associated with the continuation of the project or program funded through the original award.
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Revision History: August 2022