Program Income

Program Income is the income earned by an awardee that is directly generated by a sponsored activity or earned as a result of a sponsored activity. Program income must be identified, appropriately documented, and the resulting revenue and expenses properly recorded and accounted for. Both federal and non-federal sponsored awards generally require similar diligence to identify, document, and account for program income. As a result, program income on federal and non-federal sponsored awards is subject to this guidance. However, if a non-federal sponsor, or a firm-fixed price sponsored award, is silent on the issue of program income, the income is not reportable and therefore not considered program income.

Examples of program income include the following when the source of funding is a sponsored award or the revenue is directly generated by a sponsored activity (note that royalties from patents, copyrights, etc. are generally not reportable as program income):

  • Fees earned from services performed under the project, such as laboratory tests
  • Income generated from sales of commodities and research materials, such as tissue cultures, cell lines, and research animals
  • Registration fees from participants attending conference or workshop
  • Income from sales of educational materials
  • Sale, rental, or usage fees, such as fees charged for the use of computing or laboratory equipment
  • Income generated from the sale of software, digital media, or publications

Principal Investigators (PIs) and department/local level managing units must identify program income on both federal and non-federal sponsored awards in order for the income to be administered by the University. This guidance is intended to ensure compliance with federal regulations and sponsored award terms and conditions. As a non-profit institution, the University’s mission is not to seek profit from its research activities; therefore, not properly accounting for program income on sponsored awards may potentially affect the University’s tax-exempt status.


At Proposal Stage

The PI and department/local level managing units should review the proposal to identify sources of actual or potential program income from the project. If program income is identified, select “Yes” to the program income question on the “Edit approval attribute” screen in GMAS.

If there is program income that will fund a portion of the project as committed cost sharing, consult with OSP to determine an alternative funding source to cover any potential shortfall in program income revenue.

At Award Stage

Upon award acceptance, the PI and department/local level managing unit should submit a request to OSP to establish a GMAS program income account (part-of account) for tracking the program income generated during the project period if program income was included in the proposal budget/narrative. If program income is identified after the award is initiated, a request for setting up a program income account should be submitted to OSP as soon as the actual or potential program income revenue is identified.

The following information should be included in the request:

  • Description of the activity and relationship to the sponsored award
  • Approximate annual level of income for each award budget period
  • A proposed fee schedule for the services to be performed, or cost of commodities to be sold, together with a breakdown of the major fee or cost components
  • Assurance that the service or commodity is not being provided to non-Harvard customers at a price that is less than outside vendors charge for the same goods or services
  • Budget estimate for utilizing the program income
  • Proposed beginning and end dates of the program income account, which must fall within the sponsored award period of performance
  • Upon receipt and approval of the request, OSP creates a program income account under the award segment (using the same fund value and activity value as the main account), and sets up the account as follows:
    • The account description is “program income” 
    • $0 is allocated to this account
    • The IDC rate is 0%


  • The Department identifies sources of program income and requests that a Program Income part-of account be created. 
  • The Department should identify potential sources of income during the proposal process, but anything identified after this point may require additional review. 
  • The OSP Awards Management Team reviews and approves the request for a Program Income Part-Of Account.
  • The OSP Operations Team initiates a revision on the GMAS fund to create the requested account. 
  • The OSP Awards Management Team reviews and commits the revision which generates an action memo that is sent to all members listed on the Administrative Team.

During the Award

The Department/Local Level Managing Unit is responsible for posting the program income and the associated project expenditures. Program income must be spent in accordance with the terms and conditions of the award, unless formally approved by the sponsor. The Program Income Guidance – Appendix A provides a list of the object codes for recording program income in the general ledger. As a best practice, expenses should first be posted against program income, thus fully exhausting the program income, before posting transactions to funds directly from the sponsor. The four accounting methods that can be used for recording and reporting program income will be identified in the award terms. The four accounting methods are listed below and examples of each are included in the Program Income Guidance.

  • Additive Method – Program income funds are added to the sponsored award commitment and used to further project or program objectives. This method is commonly used by federal sponsors.
  • Deductive Method – Program income funds are deducted or offset from the total award’s allowable costs to determine the net allowable costs on which the sponsor's share of costs is based.
  • Matching Method – With prior approval of the sponsor, program income funds are used towards fulfillment of a committed cost sharing requirement for the sponsored award.
  • Add/Deduct Method – A portion of program income is added to the funds committed to the project as specified by the awarding agency; any remaining program income funds are deducted from the total funds available for the project.

OSP Research Finance records the reporting requirements of program income in GMAS and schedules appropriate financial deliverables based on the award terms. OSP Research Finance then reviews program income and any related expenditures as part of the preparation of financial deliverables during the award and reports program income to the sponsor when required.