Today we’re looking at threetips, so you aren’t blindsided by program income related to conference registration fees when managing your Federal grants.
We’ve dug into the grant management “mailbag” for some common problems encountered in the “real-world” by “real-life” grant managers, just like you!
A grant manager writes:
Question: “Where Do We Put Revenue From Conference Registration Fees?”
“We sponsor an annual conference for colleagues interested in our federally-sponsored program topic.
We allow our subrecipients to budget their attendance to that conference, i.e., registration fees, lodging, meal per diem, and mileage.
We aren’t sure how to account for the registration fees-especially when we give a subaward, which includes expenses for coming to the conference.
When they register, they are paying us for the conference, and they are being reimbursed from us as a subrecipient to cover the expense.
How do we record that registration revenue coming back in?
Is it truly revenue?
Is the registration expense in their award budget truly an expense?
Can you help?”
Answer: These Registration Fees Could Be Program Income
What our grant manager is talking about is program income (registration fees) and participant support paid to subrecipients as participants to attend the conference.)
Here are some basics:
What are Program Income and Participant Support?
Program Incomeis the gross income directly generated by a program or project activity or earned as a result of the award and earned by the recipient during the period of a Federal award. See 2 CFR Part 200. Program income means gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance. (See more in the definitions in 2 CFR Part 200, aka the Uniform Guidance. )
Here are some examples:
- Service fees received
- Use or rental of real or personal property acquired as the result of a federal award-such as rental of a museum built with a federal award.
- Sale of commodities or fabricated items made under a federal award-such as surplus PPE
- License and royalty fees earned-such as royalty fees for a tornado awareness app developed with a federal award
- Principal and interest earned on loans made with federal awards-such as a revolving loan fund for first-time homebuyers
Participant Supportcosts are direct costs for items such as stipends, travel allowances, and registration fees paid to or on behalf of participants or trainees in connection with meetings, conferences, or training projects.
- Watch out! Participant support can’t be paid to employeesof the organization getting the Federal award.
The starting place to determine the correct way to treat conference revenues and other potential program income sources is to look at your award terms and conditions.
Tip #1: What Do Your Award Terms and Conditions Say?
Start with the terms and conditions for the conference and see what it says about program income and participant support.
There are (at least) three different methods for treating this type of income (income generated as a direct result of the award, in this case, holding the conference.)
In many cases, the registration fees are used to offset the expenses of the conference.
Tip #2: What Does Your Your Funding Agency Say?
Often your funding agency will have specific guidance about various grant management topics, including program income and participant support.
Here are a couple of examples:
Example #1: National Science Foundation
The NSF offers a program income brochure which offers the following guidance:
Conference and Group Travel Award Program Income
“[R]egistration or other fees paid by conference participants shall be used to defray reasonable expenses directly associated with the conference for which funds are not otherwise available. If fees exceed such expenses, the remainder shall be used to offset
allowable costs otherwise chargeable to th[e] grant.”
(F.L. 26, Administration of NSF Conference or Group Travel Award Grant Special Conditions, Section j)
NSF recovers program income under conference awards by crediting costs otherwise chargeable against the grant on the Federal Cash Transaction Report.
Income in excess of the grant must be remitted to NSF electronically or by check. (Grant Policy Manual, Section 444
Example #2: Environmental Protection Agency
From their guidance on “FAQ About Closeout”
4. Do I need to report the Program Income generated by the project?
Yes, all program income should be accounted for on the FFR (section 10.L-O) and used in accordance with the terms and conditions of the award instructions provided. The EPA’s standard practice is, in accordance with 2 CFR part 200.307(e)(2), for program income to be added to funds committed to the project by the EPA and used to further eligible project or program objectives. However, please check with the respective project officer or grants specialist to verify.
Tip #3: What Does the Uniform Guidance Say?
Just in case you are wondering…we’ve never seen where the organization gets to keep the registration fees as unrestricted “free” money.
2 CFR Part 200, aka the Uniform Guidance ins subsection § 200.307 Program income, lays out three possibilities for what to do with the revenue:
- The additive method – With prior approval of the funding agency, program income is added to the federal award and used for the eligible activities of the federal award.
- The deductive method – Program income is deducted (offset) from total allowable costs to determine net allowable costs
- Cost-share method – With prior approval of the funding agency, program income is used for cost-share or matching. The amount of the federal award remains unchanged.
If the terms and conditions and your agency are silent, and you don’t receive prior approval from your funding agency, refer to 200.307 for more information on which is the correct method for income earned by grant recipients and subrecipients.
And don’t forget that regardless of the accounting method used, program income may be used only for allowable costs.
- Find out more about getting prior approval at https://blog.myfedtrainer.com/what-is-prior-approval/
Where Can I Find Out More about Program Income?
Whether you are a:
- Non-profit Organizations
- State, local or tribal government
- Institution of Higher Education
You may find yourself wondering how to record and report program income.
Find out more about the general rules are included in 2 CFR Part 200 (aka the Uniform Guidance) in subsection:
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Lucy Morgan CPA, MBA
CEO, Compliance Warrior
Author of “Decoding Grant Management-The Ultimate Success Guide to the Federal Grant Regulations in 2 CFR Part 200” The 2nd Edition is now available on Amazon in Paperback and Kindle versions.