University of Illinois System
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Business & Finance » Policies & Procedures » 16 Sponsored Programs » 16.4 Sponsored Programs Program Income

16.4 Sponsored Programs Income

Policy Statement

The University of Illinois System is required to identify, document, and report program income generated on sponsored programs in accordance with the federal administrative requirements, awarding agency regulations and terms and conditions of the awards.

Reason for the Policy

This policy is designed to provide guidance for the treatment of program income generated by sponsored programs to ensure the system complies with the requirements of Office of Management and Budget (OMB) Uniform Guidance 2 CFR Part 200.307 for awards issued after December 26th, 2014, awarding agency regulations, and the terms and conditions of the underlying agreements.

Applicability of the Policy

To maintain consistency in the treatment of program income, this policy applies to all federally-funded projects (both direct and federal pass-through awards). For non-federal sponsors, if the awarding agency does not have an established program income policy, the income is not reportable, but instead treated as revenue generating activity and handled according to 22 Self-Supporting/Revenue Generating Activities.

Procedure

All program income must meet the following core principles:

  • The program income must be used for the purposes of the award.
  • The program income must be used only for allowable costs in accordance with the applicable cost principles and the terms and conditions of the award.
  • The program income must be used for current costs, unless the awarding agency authorizes otherwise.
  • Expenses will be assessed Indirect Costs at the same Facilities and Administration (F&A) rate as the associated sponsored project. Units may request a waiver of Indirect Costs on program income expenses on a case-by-case basis through their university Office of the Vice Chancellor for Research (OVCR) for UIC and UIUC or Provost’s Office for UIS.
  • The program income may be used to fulfill a cost sharing or matching requirement with prior approval of the awarding agency.

When a reporting requirement exists, the system must track program income earned during the project period using one of the following methods, in accordance with the awarding agency regulations or the terms and conditions of the award:

  • Addition—Program income is added to funds committed to the program and used to further program objectives.
  • Deduction—Program income is deducted from total allowable costs of the program to determine the net allowable costs.
  • Cost sharing or matching—With prior approval of the awarding agency, program income funds may be used to meet the cost sharing or matching requirement of the award.

If the awarding agency does not specify in its regulations or the terms and conditions of the award how program income is to be used, the addition method listed above must be applied.

Although these default treatments usually apply, the system may request prior approval from the awarding agency to treat program income using a specified alternative method.

Income earned after the end of the period of performance is not considered program income and is generally treated as revenue generating activity (see 22—Self-Supporting / Revenue Generating Activities).

Related Policies and Procedures

16.4.1 Identify, Account, Treat, and Report Program Income

22—Self-Supporting / Revenue Generating Activities

Additional Resources

16.4.2 What is Program Income?

16.4.3 Program Income Responsibilities

16.4 Frequently Asked Questions

Uniform Guidance 2 CFR 200

First Published: March 2021 | Last Updated: March 2024 | Last Reviewed: March 2024