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Program Income

Program income is defined as gross income - earned by a grantee, a consortium participant, or a contractor under a grant - that is directly generated by the grant-supported activity or earned as a result of the award. Federal awarding agencies require recipient organizations to account for program income related to projects funded in whole or in part with federal funds. The use of these funds is specified in the award, and further described below.

Northwestern University, as part of the Federal Demonstration Partnership (FDP) IV, follows FDP terms and conditions in regards to program income. FDP terms and conditions are based upon the rules and regulations set forth in the Office of Management and Budget's Circular A-110, Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations.

It is the responsibility of the sponsored project's principal investigator (PI) to identify the receipt of program income during the course of the award and notify Accounting Services for Research and Sponsored Programs (ASRSP) to ensure the proper accounting treatment. When a sponsored project account is being closed, ASRSP confirms program income amounts and includes program income on the financial status report to the sponsor.

Northwestern follows these principles in the treatment of program income, unless the agency-specific requirements of the award specify otherwise:

  • a) Program Income earned during the project period is to be retained by Northwestern University and, in accordance with awarding agency regulations and/or terms and conditions of the award, must be used in one or more of the following ways:
    • i. The program income may be added to funds already committed to the project by the awarding agency and Northwestern University and used to further eligible project or program objectives.
    • ii. It may be used to finance the non-Federal share of the project/program.
    • iii. It may be deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share is based.
  • b) If not specified by agency regulations or the terms and conditions of the award, section a.iii. applies automatically to all projects or programs except research. For awards supporting research, section a.i. automatically applies unless indicated otherwise.
  • c) Northwestern University has no obligation to the Federal Government regarding program income earned after the end of the project period.
  • d) Northwestern University has no obligation to the Federal Government with respect to program income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions produced under an award.

Federal and agency-specific guidelines regarding program income can be found at:

OMB Circular A-110:
http://www.whitehouse.gov/omb/circulars/a110/a110.html#24 (Subpart B, Section 24)

NIH Grants Policy Statement:
http://grants2.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part8.htm#_Toc54600138 (Section: Program Income)

NSF Grants Policy Manual:
http://www.nsf.gov/pubs/2002/nsf02151/gpm4.jsp#444 (Chapter IV, Section 444)


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