Click here to access the Program Income section of the Post-Award Sponsored Projects Guide on page 39.
Under Uniform Guidance, program income is defined as gross income earned by an organization that is generated by a supported activity or earned as result of the Federal award during the period of performance. For example, if UMBC charges conference fees for a conference that is a grant-sponsored activity, then the conference fees would be considered program income.
Uniform Guidance requires any program income that was not originally approved in the budget to be deducted from the total Federal award (utilizing the “deduction” method). For example, if a recipient generates $10,000 in program income that was not anticipated at the time the budget was approved and the Federal award amount is $150,000, then the $10,000 would reduce the Federal award to $140,000, while maintaining a total project amount of $150,000.
However, the program income may be added into the Federal award to increase the funds available for the program if it is included in the original approved budget, so that the program income is approved and authorized by the Federal awarding agency.
Most importantly, the program income must be used for the purposes under the award and for allowable costs under the Federal guidelines and conditions in the Federal award. The program income takes on the properties of Federal funds, so costs that are allowable in the award would be allowable; and conversely, costs that are unallowable under the award would be unallowable as program income. For example, food is typically not an allowable cost under the Federal guidelines, so the program income should not be used to purchase food. Any program income may be distributed throughout the budget of the award and spent on project-related activities.
Any Principal Investigator expecting to recover income through a sponsored project should discuss this with the Office of Contract and Grant Accounting.