Program Income

Handling program income from sponsored programs

Program income is defined as gross income earned by IU that is directly generated by a supported activity or earned as a result of a federal award during the award’s period of performance.

What is included in program income?

  • Fees for services performed under the award
  • Use or rental of real or personal property acquired under federal awards
  • Sale of commodities or items fabricated under a federal award
  • Principal and interest on loans made with federal award funds

What is not included in program income?

  • License fees and royalties on patents and copyrights
  • Proceeds from the sale of real property, equipment, or supplies
  • Interest earned on advances of federal funds
  • Rebates, credits, discounts, and interest earned on any of them unless specified in the award terms and conditions, or regulations.

IU must identify, document, expend, and report program income to the sponsor in accordance with the terms and conditions of the sponsored project. Tracking program income on federal and federal pass-through awards is required under the Office of Management and Budget (OMB) Uniform Guidance.

If you anticipate program income at the time of proposal submission, include that information in your proposal.

Uses of program income

Check the terms of your award for guidance on the use of program income. The National Institutes of Health includes the treatment of program income in the Notice of Grant Award. For other sponsors, you may need to refer to the terms and conditions referenced in the award document.

Generally, use of program income from federal awards is through one of three methods:

  • Additive: added to the project budget, increasing the amount available to achieve the project objectives.
  • Deductive: total funds available to the project remain the same and the funds generated through program income are deducted from the financial commitment of the sponsor and must be used to cover current costs of the project.
  • Cost sharing or matching: used to meet matching requirements. The federal award remains the same.