OMB Circular A-110 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."
Program income includes:
- income from fees or 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 when required by the federal sponsor’s regulations or terms and conditions; and
- interest on loans made with award funds.
University policy on program income is available in the On-line Policy Manual.
Procedures for Program Income on Externally Sponsored Programs at UNH
At Time of Proposal
1. The Principal Investigator (PI)/Project Director (PD) who anticipates that program income will occur during an externally sponsored project includes in the initial and/or continuation proposal an estimate of the amounts (non-binding) and sources of the anticipated income. The amounts are entered on the appropriate lines of the sponsor-specific form, if a form is required, and/or explained in detail in the proposal budget narrative.
2. Unless there is required cost sharing for the project and that cost sharing will need to be met with program income, the PI/PD requests in the proposal that the “additive method” be approved by the sponsor. The justification for this method is detailed in the proposal budget narrative. (One needs to consider the possibility that the “deductive method” may be applied at the sponsor’s discretion.)
3. When budgeting for the proposed program or project, the PI/PD includes in the anticipated program income expenses the applicable fringe benefits and Facilities and Administrative (F&A) costs. The office of Sponsored Program Administration confirms that fringe benefits and F&A line items are included in the proposal budget prior to submission to the sponsor.
At Time of Award and Post-Award
1. During the negotiation process for a new award and for unanticipated program income realized during the project period, the office of Sponsored Program Administration works with the sponsor and the PI/PD to clarify the applicable program income application method.
2. The office of Sponsored Program Administration establishes a unique program income account within the appropriate series (15P…) in the USNH financial accounting system and links the program income account to the specific externally sponsored program account that it supports. (In Banner Finance, the program income fund has the same grant number as the related award.) No budget is established until actual program income is received by the PI/PD’s Responsibility Center (RC) unit.
3. When actual program income is received, the RC unit deposits the revenue in the appropriate program income account established by the office of Sponsored Program Administration, and provides the office of Sponsored Program Administration with a copy of the check or evidence of cash receipt or bank transfer, the program income account number, and the requested budget line items. The office of Sponsored Program Administration will establish and/or modify the budget, with sufficient funds to cover anticipated direct and associated fringe benefits and F&A costs. It is the responsibility of the office of Sponsored Program Administration to ensure the appropriateness of re-budgeting program income accounts.
4. It is the responsibility of the RC unit to monitor program income account revenues and expenses, just as for the parent account in order to ensure that expenditures are allowable under sponsor and UNH policies and to avoid deficit spending. If there is a program income account deficit or balance at the end of the project period, office of Sponsored Program Administration works with the PI/PD, and RC unit financial manager, to determine how to best remove the account deficit or deal with the balance under the terms of the sponsored programs award. The office of Sponsored Program Administration will close program income accounts in the USNH financial accounting system after the end of the project period and all reconciliations have been done.
5. Program income earned after the award project period concludes is deposited by the RC unit in an appropriate unrestricted funds account.
Sponsored Programs Administration
Service Bldg., 2nd Floor
51 College Road
Durham, NH 03824