Fact Sheet

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.

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.

U.S. Department of Justice

Office of Community Oriented Policing Services

www.cops.usdoj.gov

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.

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.

Unless otherwise specified in the award terms and conditions 

or approved by the COPS Office, remaining program 

income will be used in one of two ways. Option 1: Earned 

program income will be used to defray program costs and 

reduce the federal share of the project. For example, if you 

were awarded $100,000 in COPS Office funding to support 

a conference and earned $5,000 in program income from 
2

Program Income

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 deducting costs from the federal 

share of the project. Option 2: In some cases, awardees can 

work with their COPS Office program manager to identify 

additional project-related allowable costs that could be 

supported by the remaining funding.

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.

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

SF-425_Form.pdf.

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.

How should recipients report 

program income?

You are required to report gross program income earned 

and expended on the Federal Financial Report (SF-425)2

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.3

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

contact your COPS Office program manager.

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.

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 
3

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.4

4. 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.

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. Excess 

program income should be deposited back into your 

COPS Office award account to reduce your federal share.5

These funds can remain available for later use on allowable 

project expenditures incurred before award expiration.

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. 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 90 days after the award 

end date must be returned to the COPS Office. Please 

contact your COPS Office program manager for guidance 

on how to return excess program income and complete 

your 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 SF-425 to account for interest earned.

Important: Awards must be open and active to incur 

project expenses paid for by program income.

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

appear in your COPS Office account.

Program Income

May 2015