"Program Income" means gross income earned by the recipient that is directly generated by a supported activity or earned as the result of an award (OMB Circular A-110, see below.)
- In instances where the contract or grant is involved in any manner with the income producing activity, a separate 5-xxxxx account should be established to expend the program income. Give the account a title that identifies it as "Program income for 5-xxxxx" (the contract/grant award account that the program income supports.)
- Program income should be accounted and expended according to the terms and conditions of the applicable contract/grant. In the event that the award terms are silent on this issue, the provisions of OMB Circular A-110, section .24 apply. Please note that some funding agencies expect the first expenditures to be made to the program income account and then to the agency funds.
- When funds are collected (e.g., registration fees for a meeting), they should be taken to the appropriate Contract Administrator who will prepare a budget form and modification to the Program Income account. Funds credited to the "0" account are credited to account code 1339. The P.I. should then send an "increase funds" Request for Budget Change form to Research Administration. This form will increase the "5" account credit by the amount of the deposit. Funds credited to the "5" account should be credited to the account codes from which you plan to spend the money, including account code 7900 (F&A.) The Bursar's receipt must accompany this form. The "reason" section at the bottom of the form should indicate that this is program income. [In calculating the cost of registration fees, seminar fees, etc., the P.I. should include F&A costs. When program costs are paid from the program income account, C&G Accounting will debit F&A costs along with the direct costs. This means that an increase budget change for $2,000 in fees should have $1,374.57 credited to a direct charge subcode (usually "7000") and $625.43 credited to subcode 7900. This example assumes a 46.5% F&A rate.]
- This is a "5" account and all actions are processed through Research Administration just like other "5" accounts.
- When a program income account is established, the Contract Administrator should review the award document, the agency regulations and OMB Circular A-110 to determine the program income regulations and order of precedence governing this situation. The Administrator should provide this information to the C&G Accountant and the P.I. These regulations will determine the precedence of expenditure and the disposition of funds remaining at the end of the award.
- In instances where an income generating meeting or activity is NOT sponsored or connected in any way with a contract/grant, it would be appropriate to set up a department account and Research Administration would not be involved.
[OMB Circular 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. See exceptions at .24(e) and (h).]
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