University of Arkansas at Little Rock
Policy Name: Program Income Generated on Sponsored Programs
Policy Number: LR 603.17
Effective Date: June 27, 2016
Revised Dates: –
Most Recent Review Date: –
This policy provides guidance to ensure that program income, where generated under a sponsored program, is accounted for in the manner prescribed by Federal regulations. This policy should be applied consistently to all sponsored programs generating program income.
Most sponsored programs are funded entirely by the sponsor; however, some programs also generate income as a result of the work performed under the program. Federal regulations refer to this as “program income” and regulate how that income is to be treated and accounted for. This policy communicates the regulations for program income earned on sponsored projects.
In carrying out a sponsored program, certain projects generate program income. Program income includes, but is not limited to:
- Income from fees or services performed.
- Income from the sale of pamphlets or written material.
- Rental fees.
- Proceeds from the sale of tangible property or items fabricated under an award.
When a sponsored project generates program income, the treatment of that income must comply with sponsor regulations. Those regulations generally dictate one of three methods of accounting for program income:
- Additive, whereby the income is added to the funds committed to the project to further the objectives of the award;
- Matching, used to finance the non-sponsor share of the project; or
- Deductive, whereby the income is used to reduce the sponsor’s share of the funding of the project.
If authorized by awarding agency regulations or the terms and conditions of the award, costs incident to the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the award.
Unless awarding agency regulations or the terms and conditions of the award provide otherwise, there is no obligation to the sponsor regarding program income earned after the end of the project period.
Finally, unless awarding agency regulations or the terms and conditions of the award provide otherwise, there is no obligation to the sponsor with respect to program income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions produced under an award.
OMB Uniform Guidance 2 CFR 200.307
Source: Office of Research and Sponsored Programs
Approved By: Chancellor Joel E. Anderson, June 27, 2016
Custodian: Office of Research and Sponsored Programs