Post Award

Research CCHIP #008

CLARIFICATION OR CHANGE IN PROCEDURE (CCHIP)

Accounting for Program Income Related to Sponsored Projects

OVERVIEW

This CCHIP defines and outlines the accounting for program income (PGI) as it relates to sponsored awards. Accounting for program income consists of identifying prospective PGI during the proposal stage, recording PGI during the conduct of the project, and reporting PGI to sponsors in accordance with their guidelines or the terms & conditions of the sponsored project.

Uniform Guidance (2 CFR §200) identifies three alternatives of accounting for program income:

  • Additive Alternative – PGI is added to the funds committed to the project by the sponsoring agency and USF. PGI shall be used to further eligible sponsored project objectives.
  • Matching Alternative – PGI is used to satisfy cost sharing or matching requirements. PGI shall be used to finance project costs not borne by the sponsoring agency.
  • Deductive Alternative – PGI is deducted from the total project allowable costs in determining the net allowable costs on which the sponsoring agency share of costs is based.
DEFINITIONS

Cost Sharing (Matching) – That portion of the sponsored project or program costs not borne by the sponsoring agency.

Personal Property – Property of any kind except real property. It may be tangible, having physical existence, or intangible, having no physical existence, such as copyrights, patents, or securities.

Program Income – Gross income earned that is directly generated by a supported activity or earned as a result of a sponsored project. Examples of program income include fees for services performed, the use or rental of real or personal property acquired under sponsored projects, the sale of commodities or items fabricated under a sponsored project, license fees and royalties on patents and copyrights, etc.

Real Property – Land, including land improvements and structures, but excludes movable machinery and equipment.

Sponsored Award – Any grant, contract, or other agreement between the University of South Florida and a sponsoring agency.

CLARIFICATION OR CHANGE

All prospective program income identified during the proposal stage shall be recorded promptly during the conduct of the project and reported to the sponsoring agency in accordance with their guidelines or the terms & conditions of the sponsored project.

The additive alternative shall be employed by USF to account for all program income resulting from Federal sponsored projects that support research as well as ALL non-federal projects unless the sponsoring agency indicates otherwise in their guidelines or the terms & conditions of the sponsored project.

The deductive alternative shall be employed by USF to account for all program income resulting from all Federal sponsored projects except those that support research in the event the sponsoring agency does not specify in its guidelines or the terms & conditions of the sponsored project.

USF has no obligation to its sponsoring agencies regarding PGI earned after the end of the project period unless indicated otherwise in their guidelines or the terms & conditions of the sponsored project.

All costs associated with the generation of program income shall be recorded in the PGI project to offset the gross program income earned if authorized by the sponsoring agency and the costs were not charged to the sponsored project. The net program income amount shall be reported to the sponsoring agency.

The following items are generally excluded from being classified as program income:

  • Interest earned on advances of Federal funds.
  • The receipt of principal on loans, rebates, credits, discounts, etc. or interest earned on them Patient care credits.
  • Taxes, special assessments, levies, and fines raised by government recipients.

Program income shall be recorded as revenue in the grant revenue account code (42000) for external grant revenue or (74000) for internal grant revenue  within the PGI fund series (Federal 20500, State 21500, and Private 22500).

PROCEDURES

Principal Investigator

  • Identify prospective sources of PGI during the proposal stage.
  • Complete required PGI sections in grant proposal.
  • Develop plan for using PGI and discuss with the department administrator.
  • Coordinate with Sponsored Research to report PGI to sponsors in accordance with their guidelines or the terms & conditions of the sponsored project.

Department Administrator

  • Assist PI in determining fees or rates for services performed that produce PGI.
  • Request a project account for PGI from Sponsored Research.
  • Invoice for goods or services provided that produce PGI.
  • Record PGI during the conduct of the project in accordance with USF's Cash Collection procedures.
  • Reconcile invoiced PGI versus recorded PGI.
  • Monitor PGI to ensure compliance with sponsoring agency limitations.
  • Monitor expenditure levels in project to ensure that PGI is spent first.
  • Reconcile and resolve any outstanding PGI receivables.
  • Verify PGI receipt on financial reports.

Sponsored Research Pre Award 

  • Review proposal for prospective sources of PGI.
  • Contact sponsor to discuss anticipated PGI, if necessary.
  • Determine the use of reportable PGI.
  • Notify Sponsored Research Post Award and department of prospective sources of PGI.
  • Advise PI and department administrators on the proper accounting for PGI. 

Sponsored Research Post Award

  • Complete project account setup for PGI.
  • Verify that PGI is recorded correctly.
  • Determine PGI reporting requirements to sponsoring agency.
  • Report PGI to sponsoring agency in financial reports.
  • Monitor PGI to ensure compliance with sponsoring agency requirements.
  • Advise PI and department administrators on the proper accounting of PGI.
CONTACT

Please address your comments or questions regarding this CCHIP to Sponsored Research Compliance.

AGENCY GUIDELINES

OMB Circular A-110 (Federal awards issued prior to 12.26.14)
Uniform Guidance (2 CFR §200) (Federal awards issued on or after 12.26.14)
NIH Grants Policy Statement
HHS Grants Policy Statement
NSF Grant Policy Guide

EFFECTIVE DATE

This CCHIP is effective as of the date of revision and rescinds all previous versions pertaining to the Accounting for Program Income Related to Sponsored Projects.

ISSUED: April 18, 2008
LAST REVISION: August 16, 2018