ADMINISTRATIVE PROCEDURE

Handling Program Income at Proposal Time

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

  1. Identify revenue-generating activities at the proposal stage.

    The principal investigator is responsible for identifying actual and potential program income at the proposal stage.

    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.

    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. Examples of exceptions are:

    • patient care credits (third party reimbursements)
    • interest earned on advances of funds (this is temporary investment pool or TIP income),
    • credits, discounts, rebates.

    Even if the principal investigator includes this income in the proposal budget calculations, it will be treated as program income and the proposal routing form must be completed accordingly. For example, if conference fees are to be used to cover part of the cost of the project, this revenue is still 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.

  2. Answer 'yes' to question on proposal routing form (PRF) regarding program income.

    If the principal investigator believes that program income will be generated during the project, he or she must answer "yes" to the related question on the proposal routing form (PRF).

  3. If required, complete program income statement to be included in proposal or include program income in the proposal budget.

    Some proposal applications provide a separate section for outlining anticipated program income. If this information is required, the principal investigator must provide it. It is appropriate to discuss first with SPA and, if necessary, SPA will contact the sponsor, whether funded activities might generate program income and whether it will be reportable. For assistance in proper pricing, contact External Sales at 612-624-8835 or extsales@umn.edu. For assistance on information to be included with the proposal, contact SPA at 612-624-5599.

  4. Ensure that program income in proposal is correctly identified on proposal routing form.
    1. 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.
    2. When grant administrators in SPA review the budget section of the proposal, if program income is identified they will check that anticipated program income has been correctly itemized on the PRF. If itemized the grant administrator will also review the proposal budget justification for inclusion of required program income statements.

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