Program Income

Policy statement and procedures
Adopted September 2012

Policy Statement

The University requires principal investigators to identify and document program income on projects from both federal and nonfederal sponsors. The nature of this income must be appropriately documented and the resulting revenue properly recorded. This income must be brought to the attention of the Finance Office for deposit into the appropriate account. This policy and its procedures address the definition, management, reporting and monitoring of program income in accordance with federal and University requirements.

Reason for Policy

Sponsors provide funding to cover costs of conducting research, training and public service-related activities. Program income may be generated as a result of these activities and in some cases must be reported to the sponsor. Federal sponsors have documented in OMB Circular A-110, Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations, and the applicable Code of Federal Regulations explicit requirements for identifying, recording, reporting and monitoring income generated during the project period. This policy was implemented to comply with sponsor and University policies and to ensure that program income is managed in a manner consistent with the University's overall missions and goals.


    1. The Principal Investigator (PI) is responsible for identifying sources of actual or potential program income. Appendix A to this policy provides guidance for determining whether any income earned as a result of a sponsored project is program income. A PI needing further guidance should contact the Finance office. The PI must also notify the department Chair as soon as an actual or potential source of program income has been identified.
    2. The university's Board of Trustee's prohibits the establishment of an independent bank account for any reason unless specifically approved by the Board. Any and all program income payments must be made payable to Gallaudet University. The proper account and department coding must be identified for each payment, and payments must be deposited on a daily basis and on the same day that they are received.
    3. The PI, in consultation with his/her Chair, is responsible for working with the Finance office to ensure that a sound accounting system has been developed for the financial management of the program income project. A sound accounting system, specifically a cash management system, will conform to generally accepted accounting principles and the PI will obtain the guidelines for developing an effective cash management system from the school or department's designated financial manager. At a minimum, the designated financial manager will provide the PI with the following:
  •  Payment instructions;
  •  A receipt register for tracking receipts; and
  • A periodic reconciliation of the receipt register to the record of deposits.

Program income awards are subject to the same sponsor rules, regulations and limitations applicable to the primary award and, accordingly, only those expenses that are allowable and allocable to the award may be charged directly to the program income award.

  1. The PI is responsible for identifying subrecipients that are generating program income and for notifying the Finance office. The PI is also responsible for monitoring subrecipients for appropriate identification, use, accounting and reporting of program income in accordance with the university's Subrecipient Compliance Policy.

Program Income from Federal Funds
Normally, program income earned on federally-funded research awards must be added to funds committed to the project by the federal awarding agency and used to further eligible project or program objectives. Program income earned from other federally-funded non-research awards must be deducted from the total project or program allowable cost in determining the net allowable costs on which the federal share of costs is based. Under special circumstances, program income earned on federally-funded non-research awards may be used to finance the non-federal share of the project or program (i.e., used to fulfill cost sharing requirements. See also the university's Cost Sharing on Sponsored Agreements Policy).

The OSP and Finance office will assist the PI in reviewing sponsor regulation and/or specific award terms to identify which options are available for using the program income that is generated throughout the life of the award.

The PI must contact the department Chair who, in consultation with the Finance office, will determine the appropriate accounting treatment for program income earned after the end of the federal project. The OSP and Finance office can provide specific information on award terms regarding program income earned after the end of the project. The Finance office can provide information on setting up relevant accounts for the deposit of program income earned after the end of the project, as well as any restrictions on the expenditures from such accounts. Unless the federal award or Federal awarding agency regulations specify otherwise, the university has no obligation to the federal government regarding program income earned after the project period. The Finance office is responsible for determining the taxability of any program income.

Program Income from Non-Federal Funds

Program income earned from non-federal funds during the project period may be used in one or more of the following ways unless the sponsored agreement specifies otherwise:

  1. To cover increased costs of the project and to further the project;
  2. To fulfill a cost sharing requirement

The PI must contact the Finance office to determine the appropriate accounting treatment for program income earned after the end of the non-federal project. The Finance Office is responsible for determining the taxability of any program income.


  • None

Additional Contacts

All extensions are tty/voice unless otherwise noted.

  • Finance Office (main office, ext. 5299; grants accountant, ext. 5273)
  • Office of Sponsored Programs, ext. 5401

Related Information

External Resources

Internal Information


Team Definition and Examples
Program Income Income derived from services or goods that form part of a project supported in whole or in part by a sponsor.


Role Responsibility
Principal investigator
  • Ensure program income is identified and that proper controls are established to ensure a sound financial system is in place.
Department head
  • Establish effective processes and controls to ensure compliance with this policy.
  • Communicate these practices to all responsible employees within the department.
  • Establish effective processes and controls to ensure compliance with this policy.
  • Communicate these practices to all responsible employees within the department.
Finance Office
  • Establish effective processes and controls to ensure compliance with this policy.
  • Train PIs on program income policy and procedures.
  • Ensure program income is properly accounted for and reported.
Vice President of Administration and Finance
  • Establish effective processes and controls to ensure compliance with this policy.


Appendix A - Guide to Identifying Revenue Generating Activities and Program Income


Origination date: September 30, 2012
Last amended date:
Next review date: September 30, 2013

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