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Program Income and FEE Accounts

Program income must be budgeted money chartand accounted for within the fund in a manner consistent with the specific terms and conditions of the award or by reference to general provisions of federal regulation. Program income accounts are designated by the prefix FEE and use a separate project number from the main award.

Program income is generated as a result of program activity on a sponsored project. Types of program income include, but are not limited to:
  • Fees earned from grants supported services - i.e. conference fees
  • Rental or usage fees
  • Third party reimbursement
  • Sale of tissue cultures, educational materials and research animals
  • Sale of commodities or items fabricated under an award (software, testing materials, training videos)
Income earned from license fees and royalties on patents and copyrighted materials can be considered program income on federal awards, however non-federal agency terms and conditions should be reviewed for allowability of program income.
Depending on the agency's terms and conditions, program income may reduce the sponsor's obligation and may supplement the award. Program income should be spent out by the end of the award. In certain circumstances such as sale of books or royalties, there could be income remaining. In these cases the income remains with the recipient.
FEE Accounts
The income generated as a result of a sponsored activity may not be comingled with the primary award funds and must be reported separately to the sponsoring agency of the primary award.  To facilitate the required accounting of FEE income it will be deposited into a FEE account that is established as a companion account to the primary award.   
The management and reporting requirements of FEE accounts are governed by the primary award and are managed in one of three ways as noted in OMB Circular A-110.  Program income held in a FEE Account may be: 
1) added to the federal funds to enhance the project objectives 
2) used to fund non-federal portions of the project, or 
3) used to defray the total project costs, thus reducing the federal portion of the project. 
If the primary award or agency regulations do not specify the method to be used, OMB Circular A-110 requires that method 1) be used for research projects, and method 3) be used for non-research projects. 
For consistency purposes, KUCR employs the same procedures for management and closeout of non-federal awards if the non-federal primary award does not otherwise designate a required method.
At the conclusion of the primary award, unless otherwise stated in the award document, the treatment of any funds remaining in the FEE account will depend on whether the project is a research project or a non-research project and whether the account is set up under a KUCR or KU FEE account as noted below:
Research Project:  any funds remaining in a KUCR FEE account at the conclusion of the project will be moved to an appropriate departmental fund 907 cost center; any funds remaining in a KU FEE account will be moved to a fund 700 cost center account.  The FEE account will be closed during the closeout process of the primary award.   
Non-research Project:  any residual balance must be reported to the agency and may require a reduction in the federal funding.

The FEE account may not be used to deposit monies generated after the closure of the primary award.  If additional revenue is anticipated after the primary project has been closed out, the department should contact Jennifer Deming at the Comptroller’s Office, who will assign members of the KU Service Center Committee to help establish approved service rates to utilize for the new service center account.  This should be done prior to the closing of the FEE account to provide for a smooth transition.