Contracts and Grants Accounting
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Contracts and Grants Accounting

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Contracts and Grants Accounting




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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

Expenses incurred to earn the Program

I

ncome

Slide15

Contracts & Grants

Implementation Project

15

http://

controller.berkeley.edu/departments/contracts-grants-accounting

contractsgrants@berkeley.edu