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3.4 Program Income

Accounting Processes for Program Income

If program income is earned, it must be accounted for up to the same ratio of Federal participation as funded in the project or program. For example:

  • A discretionary award project funded with 100% Federal funds must account for and report on 100% of the total program income earned. If the total program income earned was $20,000, the recipient must account for and report the $20,000 as program income on the Federal Financial Report (FFR), SF-425.
  • If a recipient was funded by an award at 75% Federal funds and 25% non-Federal (match) funds, and the total program income earned by the grant was $100,000, then $75,000 must be accounted for and reported by the recipient as program income on the FFR.
    Unless otherwise stipulated in the award, any program income earned during the project period but not utilized for the project must be refunded to the awarding agency. If authorized by the DOJ awarding agency, costs incidental to the generation of program income that have not been charged to the Federal award may be deducted from gross income to determine program income.  See 2 C.F.R. § 200.307(b).
    Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the total amount of funds committed to the project, unless otherwise specified in the agency regulations or the terms and conditions of the Federal award. (This does not apply to Institutes of Higher Education or non-profit research institutions, unless specified in other guidance or conditions.) See 2 C.F.R. § 200.307(e).
    Unless otherwise instructed by the DOJ awarding agency, there are no requirements on the disposition of program income earned after the end of the period of performance of the award.