U.S. Department of Justice

Office of Community Oriented Policing Services

 Fact Sheet 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 prin-

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cipal 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 condi

tions, program income does not include rebates, credits, 

discounts, or interest earned on any of these.

The recipient may not earn or keep any profit resulting from 

a federal award unless expressly authorized in writing by the 

COPS Office.2

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September 2023

1. See 2 C.F.R. § 200.1.

2. See 2 C.F.R. § 200.400(g).

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 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 or 

Grant Program Specialist to determine if revenue generated 

from your COPS Office award constitutes program income. 

They will help you assess whether or not the income is gen

erated as a result of the award-supported activity.

How can program income be used?

Program income must be used in accordance with the 

standards set forth in 2 C.F.R. § 200.307. Program income 

generated from an award can be used in the following ways:

	Deducted from total allowable project costs to determine 

net allowable costs to reduce the federal award

	Added to the federal award to increase funds committed 

to the project

	Used to meet the cost sharing or matching requirement 

of the federal award

Unless otherwise specified in the award terms and condi

tions 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 
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September 2023

Program Income for CPD, CPD Microgrants, TRGP-TA, LEMHWA, and PASS Recipients

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 by 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 

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to work with their COPS Office Program Manager or 

Grant Program Specialist to identify additional projectrelated allowable costs that could be supported with pro

gram income.

Earned program income can be spent only on allowable 

costs incurred during the award period. Program income 

cannot be commingled with other awards and cannot be 

used for purposes outside 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, Grant Program Specialist, or designated Financial 

Analyst 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 and the 

status of your award. Using the example discussed earlier in 

which 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 of 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. See table 1 for explanation of what 

to include in form SF-425.

3. To access this form, visit https://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

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

you are using

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

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 
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Program Income for CPD, CPD Microgrants, TRGP-TA, LEMHWA, and PASS Recipients

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 project 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 can-

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not 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 laps of time 

occurring between earning and spending program income, 

contact your COPS Office Program Manager or Grant Pro

gram Specialist. Unused program income should be depos

ited 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.

If you anticipate having unused program income remain

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

request to your COPS Office Program Manager or Grant 

Program Specialist for a no-cost extension to provide addi

tional time for your organization 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-by-case basis based on 

reasonable justification.

Unused program income remaining 120 calendar days after 

the award end date must be promptly returned to the COPS 

Office.7

 Please contact your COPS Office Program Manager 

or Grant Program Specialist 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 designated COPS Office Financial 

Analyst 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.

5. See 2 C.F.R. § 200.305(b)(5).

6. It can take up to six weeks for the returned program income to appear in your COPS Office account.

7. See 2 C.F.R. §200.344(a).

Contact the COPS Office

If you have any questions regarding the federal 

requirements on program income, please contact 

your COPS Office Program Manager, Grant Program Specialist, or designated Financial Analyst.

For more information about COPS Office programs and resources, please call the COPS Office 

Response Center at 800-421-6770 or by email at 

AskCopsRC@usdoj.gov or visit the COPS Office 

website at https://cops.usdoj.gov.

September 2023