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CHAPTER 2-210

PROGRAM INCOME

2-210-00 What does this chapter do?

2-210-10 Where do these policies come from?

2-210-20 What is program income?

2-210-30 Should you try to earn program income? 

2-210-40 What methods do Federal regulations provide for using program income?

2-210-50 How must you account for program income?

2-210-60 What specific rules apply to program income earned from a regulatory grant?

2-210-70 What specific rules apply to program income earned from an AML grant?

2-210-80 How must you use program income from all other OSMRE assistance 

agreements?

2-210-00 What does this chapter do?

This chapter explains our policies on program income generated by any grant or cooperative 

agreement we award. This chapter defines program income, and describes how you, the 

recipient, must manage and use it. 

2-210-10 Where do these policies come from?

Our policies about earning, reporting, and using program income come from Uniform 

Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, at 2 

CFR Part 200, Subpart D.

2-210-20 What is program income?

A. Program income is the gross income earned by you that is directly generated by a 

supported activity or earned as a result of the Federal award during the period of 

performance. 

B. The following types of income are examples of program income. Note that this is not a 

complete list. Other items not included here may also be program income:

1. Fees you receive for services you perform.

2. Revenue from sale of products made under an assistance agreement, such as 

publications.

3. Fees to rent or use equipment or real property you acquired with assistance funds.

4. Income from permit fees.
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5. Insurance premiums received under the Subsidence Insurance program.

C. We do not consider the following types of income to be program income:

1. Proceeds from the sale of real and personal property, either purchased through an 

assistance agreement or provided by us, are not program income. See Chapter 2-

200 for property disposition rules.

2. Credits applied against expenditures, such as a rebate on an equipment purchase, 

are reductions of costs rather than program income. These credits must be applied 

to the related cost to reduce the expense charged to the assistance agreement.

3. Income from fines, penalties and forfeitures collected by a state or tribal coal 

regulatory authority are not program income. You should use these funds to 

improve quality of life and the environment in the state or on tribal lands.

4. Tax revenues dedicated to the purposes of your program are not program income.

5. Tuition and related fees received by an institution of higher education for a 

regularly offered course taught by an employee paid under an assistance 

agreement are not program income.

2-210-30 Should you try to earn program income? 

Yes. We encourage you to earn program income in order to reduce program costs. 

2-210-40 What methods do Federal regulations provide for using program income?

A. The Code of Federal Regulations at 2 CFR Part 200, Subpart D, provides three methods 

for treating program income from Federal assistance agreements:

1. The Deduction method uses program income to reduce program costs. Program 

income must be deducted from total allowable costs to determine net allowable 

costs. The net allowable costs are then divided into Federal and non-Federal 

shares according to the percentages in the award. Under this method, program 

income reduces your and our costs for the program. The total program budget 

does not increase. 

2. The Addition method adds program income to the Federal and non-Federal funds 

already awarded to increase the total program budget. 

3. The Cost sharing or matching method allows you to use all program income to 

meet your cost sharing or matching requirements under the assistance award. 
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This method reduces your costs for the program. The Federal cost and the total 

program budget do not change. 

B. Your grant or cooperative agreement award, and our rules for the program under which 

we awarded it, will specify which of these three methods you must use. 

2-210-50 How must you account for program income?

A. You are accountable for the program income you receive. 

B. You must use program income funds according to your assistance agreement and the 

treatment method authorized for your program.

C. You must report program income from all sources on your interim and final financial 

reports.

D. You must keep records of program income in the same manner as required for funds 

provided by the assistance agreement. You must maintain financial records of program 

income receipt, and disposition adequate to track and audit such income. 

2-210-60 What specific rules apply to program income earned from a regulatory grant?

A. You must use program income from regulatory program grants to meet your required 

match, under the Cost-sharing or matching method.

B. If you earn more program income than the required match, or if your regulatory grant 

does not require match, you may choose either of the following options. 

1. You may use the Addition method, adding the excess program income to the 

Federal and non-Federal funds already committed to the regulatory program in the 

grant agreement to increase the total program budget. You must use the 

additional funds for the purposes and under the conditions of the regulatory grant 

agreement.

2. You may use the Deduction method, using the excess program income to reduce 

the Federal share of regulatory program costs.

C. You must report all program income earned and expended, and the method used, in your 

final financial report.

 

D. For income from permit fees paid to the state or tribe by coal mine operators, you may 

choose either to report all of the fees you received in the current grant, or to distribute the 

fee income equally to the regulatory grants in effect during the duration of the approved 

permit.
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E. Considering all sources of funds you receive as a result of a regulatory grant (Federal 

grant funds, permit fees, etc.), you must not realize a "profit" by receiving more income 

under a grant than you spent on the regulatory program. 

2-210-70 What specific rules apply to program income earned from an AML grant?

A. Program income includes fees from any user charge related to land reclaimed under Title 

IV of SMCRA, after expenditures for maintenance have been deducted.

B. Program income includes donations by persons, corporations, associations and 

foundations for the purpose of Title IV. You must account for donations properly.

C. You must use program income from an AML grant by the Deduction method except for 

the specific types of income listed below. Under the Deduction method, you apply the 

program income to AML expenditures to reduce the Federal cost.

1. You must use Subsidence Insurance premiums under the Addition method to 

increase the funding of the Subsidence Insurance Program. You should consider 

the insurance premiums to be paid out when you determine how to use the funds 

to further the objectives of the Subsidence Insurance Program.

2. Interest earned from AML set-aside trust funds is not considered to be program 

income. Set-aside funds and interest are considered to be state or tribal funds. 

You may keep them and spend them to achieve the goals of the Set-Aside 

Program.

2-210-80 How must you use program income from all other OSMRE assistance 

agreements?

You should use the Deduction method for program income from any OSMRE assistance 

agreement except regulatory and AML grants. Apply the income to total expenditures, reducing 

the final cost of the program.