What is program income? Am I required to report it to ONC? Do I have the right to keep it?

Program income is gross income—earned by you or a subrecipient or contractor under your ONC award—directly generated by the grant-or cooperative agreement-supported activity or earned as a result of the award. Program income includes, but is not limited to, income from fees for services performed; charges for the use or rental of real property, equipment, or supplies acquired under the award; and the sale of commodities or items fabricated under an award. See Grants Management Advisory 2011-04 for some ONC-specific examples and for a listing of what ONC does not consider to be program income.

You keep the program income you earn during the project period, but are accountable for its use, as directed by ONC. There are three alternatives for use of the income, which can be specified alone or in combination: deduct it from the Federal share and reduce the amount of Federal funds; add it to the funds previously committed to the project; or use it to satisfy your matching or cost-sharing requirement, if any. ONC’s Notices of Grant Award generally indicate use of a combination of alternatives—the matching or cost sharing and additional use alternatives. In that case, you must use reinvest in the program any program income that exceeds the amount of your required matching or cost sharing.

You should review the Notice of Grant Award to determine the program income alternative(s) that applies to your award. If no alternative is specified, the program income must be used as a deduction (first alternative above). Regardless of the alternative applied, program income may be used only for allowable costs in accordance with the applicable cost principles and the terms and conditions of the award.

Subawards and contracts under grants are subject to the terms of the subaward or contract with regard to any income generated, but those terms must be consistent with the requirements of the NGA. Note that license fees and royalties on patents and copyrights and proceeds from the sale of property are treated differently than other program income. Unless your Notice of Grant Award indicates that you are accountable for program income earned after closeout, you have no continuing responsibility to ONC concerning program income.

If you or a subrecipient or contractor under your award earns program income during the project period, you must report it in your annual SF 425 consistent with the program income alternative(s) specified by ONC.

Content last reviewed on April 29, 2019
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