Program income or grant-related income on grants, contracts or cooperative agreements or other sponsored activity is to be accounted for in accordance with the Uniform Guidance 2 CFR 200.1 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the applicable regulations or grant policies of the funding agency, as well as any special terms and conditions identified in the applicable individual award document. Caution should be taken as Federal programs/regulations have specified requirements on how program income earned during the contract/grant period can be used. For additional information, refer to the specific grant or contract terms and conditions and the guidance available in Policy RA66 Program Income.
Any income related to projects financed in whole or in part with sponsored funds that are generated during the project period must be separately accounted for and identified with the grant number(s) of the sponsored project involved.
The method of accounting for any such program income is to establish a separate 45 Internal Order/Sponsored Program (IO/SP) under the grant that will be used to record all program income as well as all related expenses. This separate IO/SP is created using the Internal Approval Form (IAF tab for Award Set-Up in the Strategic Information Management System (SIMS) or by sending a request via the Manual Account Set-Up Form to Research Accounting. See the ORIS-SIMS: Creating a New IAF knowledge base article for complete details). The IO/SP should begin with Program Income in the title.
To record income to the newly established sponsored program use general ledger account 47003400 Program Income, in conjunction with the appropriately established cost collector, on Journal Entries used to record the revenue to the University records.
Permitted expenditures from program income must be charged to the same IO/SP established to track program income. Expenditures would be charged to an appropriate 5xxxxxxxx Expenses GL. See the Procurement Search Tool for the list of General Ledger Accounts having identified payment methods.
Violation of a financial policy and/or procedure should be reported to your supervisor, unit manager, Human Resources representative, and/or office responsible for the policy and/or procedure. Where those resources are inadequate, you may choose to make an anonymous report through the Penn State University hotline by calling 1-800-560-1637.
The Research Administrator or the Financial Officer, if a Business Area does not have a Research Administrator, is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Research Administrator or the Financial Officer is responsible for collaborating with Internal Audit when audits are being performed in the administrative area. Audits relating to sponsored activities or other audits performed by external auditors may also be performed. The Financial Officer would also be responsible for collaborating with the external auditor and/or a central university officer related to these procedures.
University Records must be retained and managed in accordance with Policy AD35 University Archives and Records Management and the University’s Records Retention Schedules that have been approved by the Records Management Advisory Committee (RMAC), the Office of General Counsel, and Senior Vice President and Chief of Staff. These Records Retention Schedules are derived from - or based upon - federal, state, and local statutes or regulations (i.e., Federal Acquisition Regulations, the OMB Uniform Guidance, Internal Revenue Service, and other regulations governing the auditability and retention of financial records), University Policy, industry standards, and business needs. All University Records must be maintained in such a manner to provide ease of access, establish a suitable audit trail for all transactions, and to be reviewed prior to disposition.
University Records and Transitory/Disposable Records are defined below. See Policy AD35, Definition of Terms for additional information.
Exceptions to the practice are as follows:
Upon completion of the retention period, University Records must be disposed of via secure destruction or transfer to University Archives, unless an exception to the disposition process set forth below applies. In many cases, retention periods and disposition methods may be generally determined by comparing the type of record (i.e., reports, correspondence, etc.) to similar records series with known retention periods listed on the Records Retention Schedule. If the disposition method for University Records states "Review by Archives" on the Records Retention Schedule, the Unit responsible for those records should consult the University Archivist for a final determination of disposition. For University Records that must be securely destroyed, units may arrange for shredding services by either contacting the Blue/White Shredding Program or the Inactive Records Center (IRC).
Exceptions to the disposition process are as follows:
To safeguard the privacy of individuals, records that contain Personally Identifiable Information (PII), as defined in University Policy AD53 Privacy Policy, or student records, as defined in University Policy AD11 Confidentiality of Student Records, must be securely destroyed beyond recovery. For additional information regarding privacy and the protection of an individual's personal information, see Policy AD53 Privacy Policy.
Additional questions may be directed to the Office of Records Management.
There are no exhibits associated with this document.
For questions or additional details, please contact Research Accounting.
August 27, 2024