Ideally any anticipated program income is identified when creating the budget for your proposal. By creating an overall budget, including any program income or match, you will have a better idea of the funds needed from the sponsor. Note that one of the possible options for the treatment of program income is to be used as part of any cost share obligation.
Generally speaking, yes, program income can be considered third-party match.
No. Program income has the same allowability restrictions as the rest of the award.
Not necessarily. Federal funding agencies may elect to use one of four methods to handle program income: additive, cost share/match, deductive and additive/deductive. Please see APM 45.13 for detail on each of these methods. It should be noted that providing an estimate of how program income fits into the overall budget to the sponsor at the proposal stage helps the sponsor understand that they are only funding a portion of the project.
If you have noted that you anticipate program on your proposal then OSP will automatically create a secondary budget at the time the main budget is set up. No funds will be budgeted in the program income account until they are received.
Since federal guidelines indicate that program income funds are to be used first (OMB Circular A-110, C.22(g)) there should not be program income funds left over at the end of the project period. However, in general excess program income funds will be used to reduce the amount charged to the sponsor. In rare instances the income may be carried forward into future periods and used to further project goals.
For federal awards the income is reported on the final Federal Financial Report (SF425) by OSP as part of the award closeout process. For federal pass-through awards it is reported to the sponsor so that they can report it on their final financial reporting.