Research Administration Policy & Compliance

Program Income

Program Income is gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award. Program Income is treated in one of three ways depending on policy, sponsor type, and/or terms and conditions of award:

Additive : Program Income funds are added to available funds, thus increasing the amount available to accomplish program 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
Matching : Program Income is used to finance the non-federal share of the project

Alternative 1 applies to research awards by default unless the awarding agency specifies another alternative. For non-research awards, alternative 2 applies unless the awarding agency specifies to the contrary in its regulations or in the award.

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, and participant workshop fees generated beyond the cost of the workshop.

Program Income does not include: income earned from license fees and royalties for copyrighted material, patents, trademarks, and inventions produce under an award, interest earned after the end of the project period or (except as otherwise provided in federal awarding agency regulations or the terms and conditions of the award) the receipt of principal on loans, rebates, credits, discounts, etc., (including interest earned on any of them).

Non-federal and State of California awards are not required to account for program income unless specified in the sponsor's terms and conditions. The following table lists many major federal grant sponsors with links to their program income information. For treatment of program income on federal contracts and State of California, please contact your OSR Contract Officer. Program income is not mentioned in FAR for Federal Contracts.

Sponsor	How Program Income is treated
National Institutes of Health (NIH)	Expanded Authorities - may use the additional costs alternative for the use of general program income unless regulations or the NGA specify another alternative or a combination of alternatives. Special General Non-Expanded Authorities under Research Grants - The first $25,000 of program income is to be used in accordance with the Additional Costs Alternative and shall be reported on lines 10r and 10s of the FSR (Long Form). Amounts in excess of $25,000 are to be used in accordance with the Deduction Alternative, unless another alternative is specified on the NGA, and shall be reported on lines 10c and 10q of the FSR (Long Form). Check the website for more detail.
National Science Foundation (NSF)	Standard treatment-unless otherwise specified in the grant, program income received or accruing to the grantee during the period of the grant is to be retained by the grantee, added to the funds committed to the project by NSF, and thus used to further project objectives. See section 750 of the website for more detail.
NASA	Treatment of program income not specified but circular A-110 is included in the grants terms and conditions.
Office of Naval Research (ONR)	Treatment of program income not specified but circular A-110 is included in the grants terms and conditions. See websites below for more detail. Research Grant Basic T &C's OMB A-110: Program Income
Air Force	Unless the agency-specific requirements of the award specify otherwise, the additive method shall be used for disposal of program income. See general terms and conditions on website for detail.
Defense Advanced Research Projects Agency (DARPA)	Program income earned during the project period shall be retained by the Grantee and shall be deducted from the total project or program allowable cost in determining the net allowable cost on which the Government's share of costs is based. See Section 8 of website for more detail.
Department of Energy (DoE)	None specified; however, circular A-110 is included in the terms and conditions.
Department of Education (grants)	In keeping with the current government wide policy of reducing unnecessary regulatory and administrative burdens on grantees, all grantees may automatically exercise any combination of the various options for using program income.