Purpose

To ensure that income generated by grant-funded programs is recorded appropriately and is easily identifiable for monitoring and reporting.  This policy allows program income, as well as costs to be charged against that income, to be recorded in a companion index and easily reported in conjunction with the grant revenue and expenditures.   Identify and recording program income and costs in this manner will ensure compliance with the requirements set forth in federal regulations, primarily the Office of Management and Budget (OMB) Circulars A-110 and A-21, as well as Cost Accounting Standards. 

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Background Information

Prior to the implementation of the Grants Billing module in Banner, all program income and associated costs could be recorded in the grant fund and index and reported appropriately.  Limitations with the Grants Billing module, however, require implementation of a different mechanism for properly recording these transactions.  The process described herein allows these costs to be reported with the grant, while also allowing for full functionality of Grants Billing.

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Definition

See GCG 202-01: Program Income. 

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Policy

All program revenue and associated expenses will post to the main grant.  At least annually, before fiscal year-end close, a transfer will be completed by OPAA to record expenses in the program income index.  Program revenue will be posted directly to the program income index.

As with all costs, departments should have all program income costs posted to the main award in time to allow OPAA to meet the deadline in submitting the final invoice and financial report to the sponsoring agency (see closeout policy GCG 302 for further detail).

Procedure

OPAA will set up a companion index to record program income (similar to the mechanism used to record cost share).  To do so, a grant consistent with the number of the corresponding grant but ending in “P” will be established, as will a companion fund and index.   This grant will not be set up under Grants Billing.  The same org and program codes as the main award will be used in setting up the program income index.  Program income expenses will be charged an indirect cost rate of 8% on total direct costs unless the specific award is restricted to a rate lower than 8% TDC

For example:
Parallel grant not set up on Grants Billing (like cost share)

If “P” index is not available, another index will be assigned.

Typically, program income expenses on the main award will be transferred to the “P” index via journal voucher.  It will use account codes consistent with the cost overrun JVs, as in the following example:

A final journal voucher transferring program income-related costs will be done prior to the final invoice, thereby allowing the project-related costs to be located on the project to which they are related.  This will prevent the sponsoring agency from being billed for these costs.  As the program income grant will not be set up on Grants Billing, all revenue will be deposited directly to the proper 0xxxx revenue code on the program income index.  Below are the T accounts showing anticipated expenses and transactions.

*8% F&A on total costs will be charged consistent with the Designated Operations rate (unless grant is limited to less than 8%).