������Ƶ

Policy Contact: Grants and Contracts Administration

1. Purpose

   This policy sets forth the proper use, accounting, and reporting of program income from Sponsored Projects.

2. Definitions
    
   1. Program Income: the gross income earned by the University that is directly generated by a supported activity or earned as a result of a Sponsored Project during the period of its performance.
       
   2. Sponsored Project: an activity funded by a non-University entity requiring the University, by written agreement, to conduct certain work under a set plan, a set schedule, and a set budget, typically for the purpose of supporting research, instruction or public service through tangible or intangible deliverables that are the ultimate result of the Project.
       
   3. Principal Investigator/Project Director: (“PI”/“PD”) the primary individual who is responsible and accountable for activities on a Sponsored Project.
       
3. Policy
    
   1. The University is required to identify, document, and report Program Income generated on Sponsored Projects in accordance with federal administrative requirements, awarding agency regulations, and the terms and conditions of the award. The federal government encourages recipients of its funding to earn income to defray program costs where appropriate. However, the University may not earn or keep any profit resulting from federal financial assistance, unless explicitly authorized by the terms and conditions of the federal award. Additionally, University Service/Recharge Centers may not provide services for a profit and must charge all users, including those associated with Sponsored Projects, a Billing Rate that merely allows the Centers to recoup costs, as provided in University Policy 5:8.
       
   2. Program Income may include, but is not limited to:
      1. Fees earned from services performed under an award, such as laboratory tests;
      2. Rental or usage fees, such as those earned from fees charged for use of computer or laboratory equipment purchased with sponsored project funds;
      3. Proceeds from the sale of commodities, items, or research materials (such as animal models) fabricated with sponsored project funds;
      4. Proceeds from the sale of software, tapes, or publications created with sponsored project funds;
      5. Fees from participants attending conferences, symposia or other Activities sponsored by an award; and
      6. Principal and interest loans made with federal award funds.
          
   3. Unless otherwise specified in the sponsor’s terms and conditions of the award, program income does not include:
      1. Interest earned on advances of federal funds;
      2. Credits, rebates, discounts;
      3. Levies, fines and other such revenues raised by the University in its governmental capacity;
      4. Proceeds from the sale of real property, equipment, or supplies; and
      5. Royalties from patents and copyrights (unless addressed in the award terms, or royalties or license fees for unpatented, but potentially patentable discoveries that are disclosed to Office of Technology Transfer and Commercialization, or successor unit).
          
   4. Program Income, unless otherwise expressly permitted in the award terms, should be used:
      1. For purposes of the award;
      2. During the period of performance of the award (unless the program income is earned after the end of the period of performance); and
      3. For allowable costs in accordance with 2 CFR 200 and the terms and conditions of the award.
          
   5. For federal funds, program income earned during the project period will be accounted for using one of the following methods in accordance with awarding agency regulations or the terms and conditions of the award:
      1. Addition
         1. Program income is added to the total allowable project costs committed to the project by the federal awarding agency and University, and used to further eligible project objectives.
         2. This is the default treatment for federal awards to institutions of higher education per 2 CFR 200.307(e).
      2. Deduction
         1. Program income is deducted from the total allowable project costs to determine the net allowable costs.
      3. Cost Sharing or Matching
         1. With prior approval of the awarding agency, program income may be used to meet the cost sharing or matching requirement of the award; the amount of the award then remains the same.
             
   6. For non-federal funds, program income earned during the project period can generally be retained by the University. Unless the sponsored agreement states otherwise, program income may be used to cover increased project costs and or to further the project’s program and objectives, fulfill a cost sharing commitment, or support other sponsored projects.
       
4. Procedures
    
   1. During the proposal and routing stage, the PI/PD will indicate potential Program Income by answering “yes” to the Program Income question on the online routing form. The PI/PD will identify sources of program income, complete the required program income sections in the sponsored proposal, as necessary, and develop a plan for using Program Income in accordance with the sponsor’s terms and conditions.
       
   2. During the sponsored project period of performance, if the project starts to generate Program Income, the PI/PD will be responsible for identifying any Program Income and notifying Grants and Contracts Administration (GCA).
      1. A separate fund will be established, as appropriate, to identify and document Program Income earned and expended. Both Program Income earned and related expenses should be recorded to the Program Income fund with the intent of utilizing the income by the end date of the award.
      2. For federal funds, Program Income funds should be expended prior to spending the sponsor’s funds.
      3. GCA will determine the accounting method for Program Income in accordance with the Sponsored Project terms and conditions.
      4. GCA will report Program Income in accordance with the sponsor's guidelines.
          
   3. During the project closeout, GCA will be responsible for reporting Program Income received per the sponsor’s terms and conditions. For non-federal awards, if the sponsor is silent on the issue of Program Income, the income is not reportable to the sponsor. Unless otherwise specified in sponsor regulations or the terms and conditions of the award, there is no obligation to the sponsor for Program Income earned after the period of performance.

5. Responsible Administrator

   The Director of Grants and Contracts Administration, successor, or designee is responsible for annual and ad hoc review of this policy and its procedures. The University President is responsible for approval of this policy.

Approved by President on 11/06/2018.

Source: ; University Policy 5:8