Purpose of Guidelines

The purpose of these guidelines is to provide information about the treatment of program income for sponsored agreements. The University of Florida must comply with the requirements of OMB A-21 and the related Cost Accounting Standard CAS 501.

Background

Cost Accounting Standard (CAS) 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.

Definitions

A-21 Office of Management and Budget (OMB) circular of Cost Principles for Educational Institutions

PI

Principal Investigator on a grant, contract or cooperative agreement. This person bears the main responsibility for costs that are charged to that agreement.

Program Income

The gross income earned as a result of an award or as a supported activity.

Guideline Issues

Per A-21 and CAS 501; Consistency throughout the University must be maintain 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.

Program income shall be retained by the recipient (the University of Florida). Treatment of program income (the appropriate use and reporting) shall be in accordance with the awarding agencies requirements. Common treatment alternatives include:

Additive method: Program income is used to supplement the awarding agency's funds to continue program objectives.

Matching method: Program income is used to finance the non-federal portion of the program; to satisfy all or part of a matching requirement.

Deduction alternative: Program income is used to reduce the agency's share of the total allowable program costs.

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.

Anytime a sponsored agreement will generate or may have generated income, the P.I. or his/her staff should notify Contracts and Grants office immediately for assistance in correctly depositing and accounting for such income.

The effective date of these guidelines is July 1, 1996.

Although much of these guidelines have already been implemented, an effective date of July 1, 1996 is set to allow for University wide training at the department level so as to insure compliance and consistency.

Responsibility for compliance: Responsibility for following these guidelines lies primarily with the PI and his/her 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 insuring compliance through periodic internal and external audits.

Department Responsibilities

The first and foremost responsibility for recording program income to the correct object code and account is with the PI and the department staff. Program income should be anticipated by the P.I. and coordination with Contracts and Grants before receiving the income will allow for proper object codes / accounts to be prepared 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 the appropriate Office of 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 issued.