This occurs when the  Event allows designations on fees checkbox was not marked when the event was created.  To correct this issue: 
  1. In the Tasks menu of the event record, select Edit event. 
  2. Mark the checkbox for  Event allows designations on fees.  
  3. Click Save. 
Note: If there are existing registrations on the event, the checkbox will be grayed out.  The registrations (and applied payments, if entered) will need to be deleted in order to make this change to the event.  The registrations can be reentered after the checkbox is marked.