Program Income on Sponsored Programs
James P. Becker, Executive Director of Grants and Contract Services
IIt is the policy of Indiana University that the any program income on sponsored programs be appropriately identified, documented, expended and reported according to the terms and conditions of the sponsored program such as to comply with best practices, Office of Management and Budget Circular A-110, Section 24, and other specific sponsor requirements, as applicable.
Program Income must be identified, documented, and reported to the sponsor when earned according to the terms and conditions of the sponsored project.
Generally, Program Income may be used in one of three methods, as determined by the awarding agency:
In some cases the awarding agency may use a combination of methods. The principal investigator is responsible for working with the departmental fiscal officer and Office of Research Administration (ORA) when Program Income is earned in order to properly record, expend and report the income to the funding agency.
For grants with multiple non-competing segments, departments should detail the earned and expended Program Income on the appropriate forms for the non-competing continuation request.
If Program Income is anticipated at the time of proposal submission, this information must be included in the proposal submission. Any questions regarding this process should be directed to ORA.
When Program Income is not anticipated during the proposal preparation process and arises out of opportunities that occur during the life of the award, the principal investigator is responsible for notifying the departmental fiscal officer and ORA in order to establish the Program Income account. Program Income revenue must be deposited according to the requirements of Treasury policy VI-120.
Most agencies identify the method for accounting for Program Income in the award notice, or have default rules for accounting for Program Income. ORA uses separate accounts to house Program Income and related expenses. The Program Income account and the main grant account are linked in the FIS and both accounts are included in financial reports to agencies. The Financial Status Report submitted to the agency must include the aggregate amounts earned and spent
Regulations of the awarding agency or the terms and conditions of the award should be reviewed for any specific language regarding Program Income for the project. Unless otherwise required by the awarding agency, recipients shall have no obligation to report Program Income earned after the end of the project period.
ORA 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 Federal Single Audit 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 ORA account administrator will link the income account to the main account in the University Financial 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:
Program Income: Defined in Federal OMB Circular A-110, “Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations” as gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award.