U.S. Department of Justice

Office of Community Oriented Policing Services

 Fact Sheet www.cops.usdoj.gov

Program Income

What is program income?

Program income means gross income earned by the recipient or subrecipient that is directly generated by an awardsupported activity or earned as a result of a federal award 

during the award period.1

 Program income includes income 

from fees for services performed, the use or rental of real 

or personal property acquired under federal awards, the 

sale of commodities or items fabricated under a federal 

award, license fees and royalties on patents and copyrights, 

and principal and interest on loans made with federal 

award funds. 

Examples of program income that has been generated from 

some COPS Office-funded activities include fees collected 

for conference registration, exhibit booths, and website 

advertisements. Interest earned on advances of federal funds 

is not program income. Except as otherwise provided for 

in federal statutes, regulations, or the award terms and 

conditions, program income does not include rebates, 

credits, discounts, and interest earned on any of them.

The recipient may not earn or keep any profit resulting 

from a federal award unless expressly authorized, in writing, 

by the COPS Office.2

1. Program income is defined by 2 CFR § 200.80 in the Uniform 

Administrative Requirements, Cost Principles, and Audit Requirements 

for Federal Awards as adopted by the U.S. Department of Justice in 

2 CFR § 2800.101 for awards made after December 26, 2014. Prior 

awards would follow 28 CFR §§ 66.25 and 70.24.

2 See 28 CFR § 200.400(g), as adopted by the U.S. Department of Justice 

in 2 CFR § 2800.101.

How do I know if my COPS Office award generates 

program income?

Although recipients are encouraged to earn program income 

to defray program costs where appropriate, most COPS 

Office awards are not conducive to generating program 

income. Contact your COPS Office program manager to 

determine if revenue generated from your COPS Office 

award constitutes program income. The program manager 

will help you assess whether or not the income is generated 

as a result of the award-supported activity.

Program income means gross income earned 

by the recipient or subrecipient that is directly generated 

by an award-supported activity or earned as a result of a 

federal award during the award period.

How can program income be used?

Program income must be used in accordance with the 

standards set forth in 2 CFR § 200.307 as adopted by 

the U.S. Department of Justice in 2 CFR § 2800.101. 

Program income generated from an award can be

1. deducted from total allowable project costs to determine 

net allowable costs to reduce the federal award;

2. added to the federal award to increase funds committed 

to the project;

3. used to meet the cost sharing or matching requirement 

of the federal award.

COPS Office Contact

If you have any questions regarding the federal requirements on program 

income, please contact your COPS Office program manager or COPS Office 

state accountant.

For more information about COPS Office programs and resources, please 

contact the COPS Office Response Center at 800-421-6770 or via e-mail 

at AskCopsRC@usdoj.gov, or visit the COPS Office online at 

www.cops.usdoj.gov.
Unless otherwise specified in the award terms and conditions 

or approved by the COPS Office, program income will be 

used to defray program costs and reduce the federal share 

of the project. Program income not anticipated at the time 

of the award must be used to reduce the federal award 

and recipient contributions rather than to increase funds 

committed to the project. For example, if you were awarded 

$100,000 in COPS Office funding with no local match 

requirement to support a conference and earned $5,000 in 

program income from registration fees generated from that 

conference, an excess of $5,000 would remain in award 

funds at the completion of the project. The $5,000 would be 

returned to the Federal Government, thereby reducing the 

federal share of the project. 

In some cases, with prior approval, recipients may be able to 

work with their COPS Office program manager to identify 

additional project-related allowable costs that could be 

supported with program income.

Earned program income can be spent only on allowable 

project costs incurred during the award period. Program 

income cannot be commingled with other awards and cannot 

be used for purposes outside of the scope of the award that 

generated the income.

There are a variety of circumstances that can affect how 

program income is treated. If you anticipate generating 

program income, please contact your COPS Office program 

manager or COPS Office state accountant for guidance.

How should recipients report 

program income?

You are required to report gross program income earned 

and expended on the Federal Financial Report (SF-425)3

submitted each quarter. How you complete the report 

depends on when you earn and spend the program income, 

as well as what the status of your award is. Using the example 

above where you earned $5,000 from registration fees, you 

would enter the total amount of program income earned 

($5,000) on 10.l and the total amount of program income 

expended on line 10.m.4

Program income earned and expended must be reported on 

a cumulative basis. You must manually enter these 

cumulative amounts each quarter, as the SF-425 form does 

not automatically calculate these amounts. For example, if 

$5,000 in program income was earned in the 1st quarter 

and $10,000 was earned in the 2nd quarter, you would 

add those amounts together and enter $15,000 as earned 

on line 10.l of the 2nd quarter’s SF-425. Similarly, if you 

spent $5,000 in program income in the 1st quarter and an 

additional $10,000 of program income in the 2nd quarter, 

you would enter $15,000 as expended on line 10.m of the 

2nd quarter’s SF-425.

3. To access this form, visit http://www.cops.usdoj.gov/pdf/

SF-425_Form.pdf.

4. For examples of when lines 10.n and 10.o on the SF-425 are used, 

contact your COPS Office program manager.

Table 1. Program income on the SF-425

Note: Use lines 10.d–10.o for single award reporting only. Do not complete these lines if reporting on multiple awards.

LINE TRANSACTIONS DESCRIPTION

10.l Total federal program income earned Enter the amount of federal program income earned. Do not report

any program income here that is being allocated as part of the recipient’s 

cost-sharing amount included in line 10.j.

10.m Program income expended in accordance 

with the deduction alternative

Enter the amount of program income that was used to reduce the federal 

share of the total project costs.

10.n Program income expended in accordance 

with the addition alternative

Enter the amount of program income that was approved and expended 

on the project.

10.o Unexpended program income (Line l 

minus line m or line n)

Enter the remaining amount of unexpended program income by taking 

line l and either subtracting line m or line n, depending on which method 

you are using.

2

Program Income
In the event of an audit or other award compliance review, 

your agency should maintain detailed records that identify 

the specific project activity source (e.g., conference 

registration fees) and the amount of all program income 

generated. Line 12 (“Remarks”) on the SF-425 can be useful 

to provide narrative explanations supporting the financial 

information entered.

Can recipients keep program income as a cash 

reserve for future project costs?

No. Recipients should expend earned program income before 

drawing down award funds.5

How much time is available to spend 

program income?

Allowable project expenses can be supported by earned 

program income during the open award period. Funds 

cannot be drawn down for expenses that are incurred after 

the award end date.

Avoid retaining earned program income for extended periods 

of time. If you anticipate a significant lapse of time occurring 

between earning and spending program income, contact your 

COPS Office program manager. Unused program income 

should be deposited into your COPS Office award account 

to reduce your federal share.6

 These funds remain available 

for future use on allowable costs, incurred before award 

expiration, to fully implement your project.

5. See 2 CFR § 200.305 as adopted by the U.S. Department of Justice 

in 2 CFR § 2800.101 for awards made after December 26, 2014. 

Prior awards would follow 28 CFR §§ 66.21 and 70.22.

6. It can take up to six weeks for the returned program income to 

appear in your COPS Office account.

If you anticipate having unused program income remaining 

toward the end of the award period, you may submit a 

request to your COPS Office program manager for a nocost extension to provide additional time for your agency to 

spend program income on allowable costs to fully implement 

your project. No-cost extension requests must be submitted 

prior to the award end date and are approved on a case-bycase basis based on reasonable justification.

Unused program income remaining 90 days after the award 

end date must be promptly returned to the COPS Office. 

Please contact your COPS Office program manager for 

guidance on how to return excess program income and 

complete your final SF-425.

In the event that you earn interest on program income, 

please contact your COPS Office program manager or 

COPS Office state accountant for guidance on how to 

complete your final SF-425 to account for interest earned.

Important: Awards must be open and active to incur 

project expenses paid for by program income.

3

Program Income

October 2016