What methods are used to apply program income earned?
The following discussion applies to Texas Department of Health legacy contracts. Contractors shall utilize one of the following methods for applying program income: Additive method: add the program income to the funds already committed to the project by both parties. Program income will be used by the contractor to further the program objectives of the state/federal statute under which the contract(s) was/were made, and it shall be spent on the same project in which it was generated. Deductive method: deduct the program income from the total allowable costs to determine the net allowable costs. Program income must be expended during the contract term in which it is earned and may not carry forward to the succeeding term. For any contract beginning on or after September 1, 1999, contractor shall disburse program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting cash payments including advance payments from DSHS. Please c
