(Note: This Important Notice is being sent to Account Managers, Chairpersons, Deans and Chancellors. Please forward to others who have a need to know.)

Federal OMB Circular A-110, “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations” defines program income as gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award.  Tracking program income on federal and federal pass-through accounts is required under the provisions of A-110.  Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under federally-funded projects, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and interest on loans made with award funds.  While all other program income is reportable, income earned from license fees and royalties for copyrighted materials, patents, patent applications, trademarks and inventions is not reportable. 

 Generally, program income on federal awards may be used in one of three methods: 

·         Deducted from project expenditures to determine the new allowable federal share of costs

·         Added to the project budget to further eligible project or program objectives

·         Used to meet matching requirements

Regulations of the federal awarding agency or the terms and conditions of the award should be reviewed for any specific language regarding program income for your project.  Unless provided otherwise by the awarding agency, recipients shall have no obligation to the Federal Government with respect to program income earned after the end of the project period.

If program income is anticipated at the time of proposal submission, this information must be included in the proposal.  Any questions regarding this process should be directed to either Sponsored Research Services (IUB) or Research and Sponsored Programs (IUPUI).  However, as is often the case, program income is not anticipated during the proposal preparation process and arises out of opportunities that occur during the life of the award.  In these situations, the principal investigator is responsible for working with their account manager and Contract and Grant Administration (C&G) so that the situation can be properly tracked and reported to the funding agency.

Contract and Grant Administration has long held a practice of setting up separate accounts to track program income.  In order to further delineate program income accounts for the annual A-133 audit process, program income accounts will now be set up in the 55 account series, sharing the same last 5 digits as the main grant account.  The account title will list the federal sponsoring agency, the grant number and the word “Income”.  The C&G account administrator will link the income account to the main account in the Financial Information System for financial reporting purposes.  Departments should detail the earned and expended program income on the appropriate forms for the non-competing continuation request. 

Awards under NIH Expanded Authorities are given the following additional requirements:

·         Treatment of program income will be stated in the NIH Notice of Grant Award.

·         Program income is to be reported on the Financial Status Report (SF-269), Long Form by C&G. 

·         For awards under the Simplified Non-competing Application Process (SNAP), the amount of program income earned must be reported in the non-competing continuation request and the amount expended reported on the Financial Cash Transactions Report (SF-272).  The Financial Status Report for the competing segment must include the aggregate amounts earned and spent.

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