Handling Program Income During the Project Period

This procedure contains the appropriate steps to take in order to correctly identify, record, report, and monitor program income earned during the project period.

1. The principal investigator (PI) identifies potential program income and notifies the department administrator and the Sponsored Projects Administration (SPA) Grants and Contracts Officer (GCO). 
   Any revenue that is associated with or generated by a sponsored project and does not come from the sponsor is potentially program income.

   The SPA GCO determines whether the program income is reportable to the sponsor and if sponsor approval is required for any change in work scope.

2. The PI or department administrator contacts the External Sales Office for advice on proper pricing of program income, sales tax compliance, and award terms.
3. The PI generates the program income.

4. The department administrator receives and deposits the point of sale program income or invoices the customer for the program income. 

   When the department administrator collects point of sale program income, they may issue receipts. After the program income is collected, the department administrator should deposit the program income into the Sponsored Unapplied Program Income Account in accordance with Administrative Policy: Accepting and Depositing University Revenue.

   When program income is not collected at the point of sale, the department administrator should ensure that an invoice is created in the Enterprise Financial System (EFS). The invoice will instruct the customer how to send the payment to the University and payments will be applied to the invoices by Accounts Receivable Services. (Procedures for creating program income invoices can be found on the Creating a Bill job aid.)

   Note: If selling capital equipment, refer to Administrative Procedures: Capital Equipment Disposals: Selling Capital Equipment Purchased with Sponsored Funds from NSF Grants, NIH Grants or Non-Federal Grants and Capital Equipment Disposals: Selling Capital Equipment Purchased with Sponsored Funds (does not include NSF Grants, NIH Grants and Non-Federal Grants) for specific deposit requirements.

5. The Sponsored Financial Reporting (SFR) Accounts Receivable Accountant appies the program income to the appropriate sponsored project and the SPA GCO processes an award modification in MN-GEMS and EFS. 

   The SFR accounts receivable accountant monitors the Sponsored Unapplied Program Income Account and when there is program income, applies it to the associated project according to the award’s terms and conditions and alerts SPA that an award modification has to be processed in MN-GEMS and EFS.

6. The department administrator verifies program income has been applied according to the award’s terms and conditions.

   The department administrator monitors for the receipt of program income and contacts the SFR accounts receivable accountant if it does not appear as expected.

7. The PI monitors program income levels.

   The PI monitors the level of program income as part of the financial oversight of the sponsored project according to the sponsor’s terms and conditions.

8. The SFR accountant reports program income to the sponsor.

   If program income is required to be reported to the sponsor, the SFR accountant prepares and sends the necessary information to the sponsor.