Are activities that produce program income allowable under Federal Assistance grants?
Yes, we allow the activities if they are incidental to the accomplishment of approved grant purposes. 19.6 Should net or gross income be used when calculating program income? 43 CFR 12.65(b) defines program income as gross income. However, 43 CFR 12.65(c) provides that, If authorized by Federal regulations or the grant agreement, costs incident to the generation of program income may be deducted from gross income to determine program income. Therefore, States may include a provision in the grant agreement that allows program income to be reduced by an amount equal to costs incident to the generation of the program income. The grant agreement should identify these costs. Exhibit 2 provides some examples of costs that may be deducted and costs that may not be deducted from gross income when calculating program income. We also developed Exhibit 2 to help prompt discussion during the development of the grant agreement. If the grantee does not specify in the grant agreement how they will ca
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