University of Minnesota  Procedure

Handling Program Income at Proposal Time


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Please use the contact section in the governing policy.

This procedure contains the appropriate steps to take in order to correctly identify and record program income in a proposal.

  1. The Principal Investigator (PI) identifies revenue-generating activities at the proposal stage.

    The PI is responsible for identifying actual and potential program income at the proposal stage.  Any external or internal sale that results from a sponsored activity is likely to be program income. If the activity will be partly or fully supported by sponsored funds, it is program income.  It is appropriate to discuss first with Sponsored Projects Administration (SPA) and, if necessary, the sponsor, whether funded activities might generate program income.

    Common types of program income are:

    • Income from the collection of industry membership fees.
    • Income generated from the use, or rental, of equipment purchased or fabricated with project funds during the project period.
    • Proceeds from the sale of software, CDs, posters or publications during the project period.
    • Income from the sale of research materials such as animal models during the project period.
    • Fees from participants at conferences or symposia during the project period.
    • Sales of products with an accompanying material transfer agreement during the project period.
    • Royalties from patents and copyrights [see special situations].
    • Income from fees for services performed or use of resources such as laboratory tests during the project period.

    Examples of generated revenue that would NOT be considered program income include:

    • patient care credits (third party reimbursements);
    • interest earned on advances of funds (this is temporary investment pool or TIP income); or
    • credits, discounts, rebates.
  2. The PI answers 'yes' to question on proposal routing form (PRF) regarding program income.

    If the PI believes that program income will be generated during the project, they must answer "yes" to the related question on the PRF.

    If the PI anticipates using the income to pay some of the project costs, those funds will be considered program income and must be identified in the PRF.  For example, if conference fees are used to cover part of the cost of the project, this revenue is still considered program income.

  3. If required by the sponsor, the PI completes a program income statement to be included in the proposal or includes program income in the proposal budget.

    Some proposal applications provide a separate section for outlining anticipated program income. If this information is required, the PI must provide it.

  4. The department head, dean, and SPA grants administrator (GA) ensure that program income in proposal is correctly identified on the PRF.
    • When department heads and deans review proposals developed in their units, they must ensure that any activity that could generate program income is correctly identified on the PRF.
    • When the SPA GA reviews the budget section of the proposal and program income is identified, they will check that the anticipated program income has been correctly identified on the PRF. The GA will also review the proposal budget justification for inclusion of required program income statements.