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Presentation on theme: "Contracts and Grants Accounting"— Presentation transcript:
Slide1
Contracts and Grants Accounting
C&G Training PresentationMay 14, 2014
Program Income Procedures Effective July 1, 2014
Slide2
What is Program Income?
Some sponsored activities generate income as a by-product of the work performed. Federal regulations refer to this as "program
income.”
Examples:Income from fees, such as registration fees for conferences and workshopsFees charged for laboratory tests and analysis License fees and royalties on patents and copyrightsFees garnered from the use or rental of property acquired using award funds Proceeds from the sale items fabricated using award funds, such as software, CDs, tapes, or publications
2
Authority to spend
Slide3
When income is directly generated by a supported activity or earned as a result of an award, that income is subject to the terms and conditions of the sponsor and must be treated
according to the sponsor’s requirementsIncome
generated by federally sponsored activities is considered part of the award and must be spent on that award
Funds generated
on one award cannot be used on a different award Some NSF awards specify Program Income funds be spent first, i.e., before the sponsor is invoiced for expenses Program Income is “net” – the income generated covers the costs incurred3What is Program Income?
Slide4
Regardless of the type of program income, the funds generated must be spent on the award
Additive – program income funds are added to award funds, thus increasing the amount available to accomplish program objectivesDeductive – total funds available to the project remain the same and the funds generated through Program Income are deducted from the financial commitment of the sponsor
Matching
– program income funds are used to finance the non-sponsor share of the award (mandatory or committed cost sharing)
Add/Deduct – a portion of program income is added to the award funds (up to a limit specified by the sponsor) increasing the amount available to spend. The remaining program income is deducted from the sponsor’s financial commitment.4Types of Program Income
Slide5
Additive Program Income
Increases the total amount available to spend
5
Funds
committed by sponsor($100k)Authority to Spend $110k
Additive Program Income ($10k)
Award amount $100k
Slide6
Deductive Program Income
Income earned reduces the sponsor’s financial commitment Total amount available to spend remains the same
6
Funds
committed by sponsor($100k)
Award amount $100k
Deductive Program
I
ncome ($10k)
($90k)
Slide7
Matching Program Income
Uses income generated by award activities as cost sharing on the awardDoes not change the University’s cost sharing commitment
7
Funds
committed by sponsor($100k)
Award amount $100k
Funds committed by University
($25k)
Matching Program
I
ncome ($10k)
Applies to cost sharing commitment, not award amount
Cost Share amount $25k
($15k)
Slide8
Add/Deduct Program Income
Splits income between additive and deductive per sponsor’s requirementsIncreases the total amount available to spend up to a sponsor-defined limit
Funds generated in excess of the limit reduce the sponsor’s financial commitment
8
Funds committed by sponsor($100)Authority to Spend $105k
Additive Program
Income ($5k)
Award amount $100k
Deductive Program
I
ncome ($
5
k)
($95)
Slide9
Accounting for Program Income
As soon as you have identified an activity that will generate income…Check your award documentation to determine the sponsor’s requirement for tracking and using program income
Notify CGA, and let them know the
ChartFields
(Fund, Dept, Program Code, CF2) you will be usingCGA will then create a specific CF1 value -- attributed “program income” with SPO award number as the attribute value – for you to useFor Matching Program Income, the CF1 value assigned will represent both Program Income and Cost Sharing for the award (value begins with 2, has two attributes)CGA will update the PC ChartField mapping table so the new CF1 will function appropriately
in BearBuy and BFS
9
Slide10
When making purchases and recording expenses related to generating Program Income, use
the appropriate expense accountthe C&G Fund the specific Program Income CF1 F&A will be assessed on Program Income expenses at the award funded rate
10
Recording
Program Income Expenses
Slide11
Program Income Expenses
Sample Accounting Entries 11
Recording of the Salary Expense
BU
AccountFundDeptPrg CdCF1
CF2PC BU
ProjectActivityAnalysis Type
Amount1000050210
30451
30001
-
2P1000
CPFLD
GM100
10000012
01
ACT
100
10000
Cash
30451
00800
-
-
-
GM100
10000012
01
-
-100
Recording of the related overhead
BU
Account
Fund
Dept
Prg
Cd
CF1
CF2
PC BU
Project
Activity
Analysis
Type
Amount
10000
57990
30451
30001
80
2P1000
CPFLD
GM100
10000012
01
SFA
50
10000
57998
19933
00510
80
2P1000
-
-
10000012
01
OFA
-50
Slide12
When recording Program Income,
use ChartFields:Revenue
Account
45050
(only for Program Income revenue)C&G FundProgram Income Attributed CF1 If you will bill customers for program income, work with BPS and the BFS BI/AR team to generate those invoices within PeopleSoft. BPS will create charge codes associated with a Program Income ChartString When the invoice is generated, Program Income revenue will be recordedPayments will be routed to and applied by BPS If you do not bill customers for Program Income, create a CDS entry using the Program Income ChartFields listed above
12
Recording Program Income Revenue
Slide13
Program Income Revenue
Sample Accounting Entries 13
BU
Account
FundDeptPrg CdCF1CF2PC BU
ProjectActivity
Analysis TypeAmount10000
Cash6999500800
-
-
-
-
-
-
-
300
10000
45050
30451
30001
2P1000
CPFLD
GM100
10000012
01
PRI
-300
CDS e
ntry, when there is no customer invoice :
BU
Account
Fund
Dept
Prg
Cd
CF1
CF2
PC BU
Project
Activity
Analysis
Type
Amount
10000
12303
30451
30001
-
-
-
GM100
10000012
01
-
300
10000
45050
30451
30001
-
2P1000
CPFLD
GM100
10000012
01
PRI
-300
10000
Cash
69995
00800
-
-
-
-
-
-
-30010000123033045130001---GM1001000001201--300
When an invoice is sent to the customer:
Slide14
Net Program Income
The net of Program Income will be contributed to award activities either as additive or
deductive,
per
sponsor requirements14BUAccountFund
DeptPrg Cd
CF1CF2PC BU
ProjectActivityAnalysis
Type
Amount
10000
45050
30451
30001
2P1000
CPFLD
GM100
10000012
01
PRI
-300
10000
50210
30451
30001
-
2P1000
CPFLD
GM100
10000012
01
ACT
100
10000
57990
30451
30001
80
2P1000
CPFLD
GM100
10000012
01
SFA
50
Net Program
Income
-150
Use only Revenue Account 45050 to record Program Income
