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Program Income for Sponsored Agreements

Directive Statement

Cost Accounting Standard (CAS) 9905.501 requires consistency estimating, accumulating and reporting costs.  It is necessary that there be consistency in the methods used to accumulate and report program income for sponsored agreements.

Per 2 CFR 200 and 48 CFR CAS 9905.501; Consistency throughout the University must be maintained in the accounting for and reporting of costs, including those for sponsored agreements.  Program income as defined in this guideline refers only to that income earned as a result of an award or as a sponsored activity.  This includes fees for services performed during the grant period, proceeds from the sale of property, usage or rental fees, and patent or copyright royalties.

200.307 Program Income – Non-federal entities are encouraged to earn income to defray program costs where appropriate.

Reason for Directive

To provide information about the treatment of program income for sponsored agreements.  The University of Florida must comply with the requirements of the Uniform Guidance 2 CFR 200 and the related Cost Accounting Standard CAS 9905.501.

Who must comply?

Responsibility for following these guidelines lies primarily with the Principal Investigator (PI) and their staff to anticipate and correctly record the receipt of program income as well as notify the Contracts and Grants Office immediately.

The University of Florida administration is responsible for guidance and training and for ensuring compliance through periodic internal and external audits.

Department Responsibilities

The first and foremost responsibility for recording program income to the correct account code and fund is with the PI and the department staff.  Program income should be anticipated by the PI and coordinated with Contracts and Grants before receiving the income as this will allow time to determine the proper account codes in advance.  Sufficient fiscal practices at the department should allow for proper cash control if necessary.  Any questions regarding program income should be addressed to Contracts and Grants.

Contracts and Grants Responsibilities

Contracts and Grants Office is responsible for assisting PIs and departments in determining the correct method for treating program income, based on general rules governing all sponsored agreements, the specific agency guidelines and the requirements listed in the individual notice of award for the project involved.  C&G is also responsible for correctly reporting the program income, if required, on the financial reports.

Guideline Issues

Cost of generating program income

If authorized by Federal regulations of the Federal award, costs incidental to the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the Federal award.

Governmental revenues

Taxes, special assessments, levies, fines and other such revenues raised by the non-Federal entity are not program income unless the revenues are specifically identified in the Federal award or Federal awarding agency regulations as program income.


Proceeds from the sale of real property or equipment are not program income; such proceeds will be handled in accordance with the requirements of Subpart D of 2 CFR 200 – Post Federal Award Requirements of the part, Property Standards 200.311 (Real Property) and 200.313 (Equipment).

Use of program income

  1. Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs.  Program income must be used for current costs unless the Federal awarding agency authorizes otherwise.  Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project
  2. With prior approval of the Federal awarding agency, program income may be added to the Federal award by the Federal agency and the non-Federal entity.  The program income must be used for the purposes and under the conditions of the Federal award
  3. Cost sharing or matching. With prior approval of the Federal awarding agency, program income may be used to meet the cost sharing or matching requirements of the Federal award. The amount of the Federal award remains the same
  4. Income after the period of performance. There are no Federal requirements governing the disposition of income earned after the period of performance for the Federal award, unless the Federal awarding agency regulations or the terms and conditions of the Federal award provide otherwise.  Unless specified by the awarding agency, the University shall have no obligation to the Federal government or other awarding agency regarding program income after the end of the project period

Any time a sponsored agreement will generate or may have generated income, the PI or their staff should notify Contracts and Grants office immediately for assistance in correctly depositing and accounting for such income.

Although much of these guidelines have already been implemented, an effective date of December 26, 2014 is set to allow for University wide training at the department level so as to ensure compliance and consistency.

Last Reviewed

Last reviewed on 03/20/2024


2 CFR 200 Quick Reference Guide

Uniform Guidance 2 CFR 200

48 CFR 9905 – Cost Accounting Standards (CAS) for Education Institutions


UF HR Toolkit – Deposit Transmittal

UF HR Toolkit – Deposits


RSH260: Cost Principles

RSH206: Cost Principles Advanced Topics

RSH282: UFIRST Awards

RSH212: Post Award Overview


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Cost Analysis: (352) 392-5778

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