Grants such as Innovate UK, Smart, Horizon 2020, Edge 2021, UK Space Agency, the Regional Growth Fund, and the Future Fund require an audit to be carried out by a Chartered Accountant to be submitted at certain intervals of the project or with the final claim.

WHAT IS A GRANT AUDIT?

For grants that require it, audits must be carried out on the costs of the project paid for by the grant. Audit requirements are set by each funding body and so it is imperative that companies read the conditions set out on their award letter, should they be given grant funding.

Majority of funding organisations will state specific guidance around what costs they deem eligible or ineligible to claim. The reason for the requirement of an audit is so that the funding body can ascertain that the grant has been used to cover costs which are in-line with the grant conditions.

GRANT AUDIT CHECKLIST

In order to be prepared for a grant audit, companies must first ensure that they are meeting compliance requirements. Auditors will often evaluate the following:

• Activities allowed or unallowed
• Allowable costs and cost principles
• Cash management
• Program income
• Programmatic performance
• Performance management system
• Sub-recipient monitoring

Companies should keep detailed documentation of all grant-related information in order to demonstrate appropriate spending of grant funding. Information that would be relevant to this includes project timelines, programme income/budgets, sub-recipient activities, the status of funds spent, and financial expenditure and budget narratives.

HOW MUCH DO GRANT AUDITS COST?

The cost of a grant audit varies depending on the type of grant audit required and the amount of work required for the audit to be performed. Generally, the process of a grant audit takes no more than three working days to be completed. For a competitive quote, please submit an enquiry.

STATE AID GRANTS AND R&D TAX RELIEF

Government grants are a Notifiable State Aid (NSA) and it therefore may not be possible for you to also claim SME R&D Tax Relief as a company can only be in receipt of one form of NSA.

With appropriate loan application wording and suitable record-keeping, it may still be possible to obtain financial assistance for your company without impacting your SME R&D claims or claims under RDEC.

HOW WE CAN HELP

It is often the case that the audit and final report are required to be carried out by a Registered Auditor. Jeffreys Henry is one of the UK’s Leading Grant Auditors, with significant experience in providing cost-effective grant audits and Independent Accountants’ Reports (IAR).