Program Income
Examples of Program Income
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Sale of Property
Royalties
Attorney’s Fees and Costs
Registration/Tuition Fees
Asset Seizures and Forfeitures
Interest Earned on JAG and JABG Funds
Membership Fees
Sale of Property
In the case of real property purchased in part with Federal funds, the recipient and/or subrecipient may be permitted to retain title upon paying the awarding agency for its fair share of the property. You must compute the Federal share of the property by applying the percentage of Federal participation in the total cost of the project for which the property was acquired to the current fair market value of the property. Be sure to contact your program manager prior to the disposal or sale of any property purchased with Federal funds.
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Royalties
You may keep all royalties received from copyrights or other works developed under projects or from patents and inventions, unless the terms and conditions of the project provide otherwise, or a specific agreement governing such royalties has been negotiated between the awarding agency and the recipient.
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Attorney’s Fees and Costs
If you receive income after completion of the project related to a court-ordered award of attorney???s fees or costs, it is program income to the extent that it represents a reimbursement for attorney’s fees and costs originally paid under the award. This type of program income is subject to the restrictions stated in the award.
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Registration/Tuition Fees
These types of program income must be treated in accordance with the instructions stated in the project???s terms and conditions.
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Asset Seizures and Forfeitures
Program income from asset seizures and forfeitures is considered earned when the property has been adjudicated to the benefit of the plaintiff (i.e., law enforcement entity). Income received from the sale of seized and forfeited assets (personal or real property) or from seized and forfeited money must follow the “Addition Method” of handling program income unless an alternate method is designated in the recipient???s award document. The following policies apply to program income from asset seizures and forfeitures:
- Subrecipient program income, with the approval of the recipient, may be retained by the entity organization earning the program income or used by the recipient for any purpose that furthers the objectives of the legislation under which the award was made.
- States or local units of government may use program income funds from seized and forfeiture assets as match when assets are given a ruling by a State court, in accordance with the State law. In addition, State and local units of government may use cash received under the equitable sharing program for the non-Federal portion (match) of program costs, as provided for in the guidelines established by the U.S. Department of Justice Asset Forfeiture Office, when the assets are judged by a Federal court organization.
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Interest Earned on JAG and JABG Funds
Interest earned on JAG and JABG funds is considered program income and should be spent only on allowable purpose areas under these programs. You are required to use all funds within the fixed expenditure period. No extension to the project period will be approved. JAG and JABG recipients are not required to spend program income before spending Federal funds.
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Membership Fees
If an organization's only source of income is Federal award funds, then when it receives membership fees, those fees will generally be considered program income.
- When an organization receives non-member income and uses that income to provide services to its members, then membership income may be considered program income. How much of the membership income is considered program income will be in proportion to the amount of Federal and non-Federal funds that the organization receives.
- An organization need not report its membership fees as program income if the fees were received before the organization began to receive Federal award funds, or if they are used to provide member services that are separate and distinct from grant-funded services.
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Financial Management Tip
Fines as a result of law enforcement activities are not considered program income.