All interest earned on grant funds held by a grantee shall become part of the grant principal when earned and be treated accordingly for all purposes, unless the grant agreement provides otherwise. The grantor agency may provide in the grant agreement that interest earned on grant funds may be retained by the grantee when the cost of accounting for the interest or allocating the interest to principal is significant in terms of the amount of interest to be received. When the grantor agency is granting funds made available from the federal government or other third party sources, and such funds require or permit different treatment of interest which the grantee may earn on the grant funds, the grantor agency may provide in the grant agreement that such earned interest may be treated as required or permitted by the source of the funds. However, any interest earned on grant funds subject to the grant agreement held after the expiration of the period of time specified in Section 4 shall become a part of the grant principal and shall be so treated for all purposes.
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