Back to Top
Business and Financial Policies and Procedures

Sponsored Projects Program Income

Policy Statement

The University is required to identify, document, and report program income generated on sponsored projects in accordance with the Federal administrative requirements, awarding agency regulations and terms and conditions of the awards. 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 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 campus OVCR for UIC and UIUC or the 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 University 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 must be applied.

Although these default treatments usually apply, the University 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 OBFS Policies and Procedures Manual Section 22).

Reason for the Policy

This policy is designed to provide guidance for the treatment of program income generated by sponsored projects to ensure the University complies with the requirements of Office of Management and Budget (OMB) Circular A-110 Section_.24 for awards issued prior to December 26, 2014 and the Uniform Guidance 2 CFR Part 200.307 for awards issued thereafter, 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 sponsored 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 OBFS Policies and Procedures Manual Section 22.

Related Policies and Procedures

Identify, Account, Treat, and Report Program Income
OBFS Policies and Procedures Manual Section 22

Additional Resources

What is Program Income?
Program Income Responsibilities
Frequently Asked Questions

Last Updated: July 1, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: August 2015

Give us feedback about this page Submit Feedback