Grant audit essentials: Understanding our grant audit services

At Richardsons we pride ourselves on offering comprehensive grant audit services tailored to the unique requirements of each funding body and your organisation’s needs. Our registered auditors have an extensive background in handling an array of grant audits spanning multiple sectors, including space, biotechnology, higher education, fashion, and software development.

What is a grant audit?

Grant providers need to gain assurance on how recipients use their grant funding. An audit is an independent review of the figures included in the claim. The auditors review the costs incurred and check that they meet the terms and conditions of the grant.

An accountant’s report is then produced, stating whether expenditure meets the requirements of the grant. The report template is often stipulated by the grant provider.

Do I need a grant audit?

The offer letter will be the best place to start. This should tell you if and when you require an audit, and also detail the eligible costs and requirements for the claim. A common requirement is that costs must be invoiced and paid to be included. If you are uncertain give us a ring, as a grant audit may not always be necessary, and our team will be able to advise whether your company needs one or not.

Some grant providers require quarterly or annual reports, others only require reports if you breach spending limits.

The cost of grant auditing is often not included in the grant funding. However, always read the small print as it may be claimable.

Our specialist Grant Audit team is always on hand to help with any questions you might have. 

Scope of our services:

Initial consultation: We begin with a thorough review of your grant offer letter to advise effectively on whether a grant audit is necessary and outline the eligible costs for your claim.

Audit compliance: We ensure that your reported expenses strictly adhere to the grant’s terms and conditions, providing an accurate accountant’s report that reflects compliant expenditure.

Quality assurance: Our specialists meticulously review your financial documents, including payroll reports, timesheets, invoices, and proof of payments to authenticate the legitimacy of your claim. Whether it pertains to Innovate UK, Horizon Europe, or the UK Space Agency, to name a few, our team holds a wealth of experience and can assist you in the management of various grant audits.

Specialist expertise: Whether it pertains to Innovate UK, Horizon Europe, or the UK Space Agency, to name a few, our team holds a wealth of experience and can assist you in the management of various grant audits.

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Who can complete a grant audit?

Most funding organisations require that the audit is completed by a registered auditor.

Richardsons are registered auditors and grant audit specialists with extensive grant audit experience.  We complete Independent Accountants’ Reports (IARs) for a range of grant providers, including: Innovate UK (IUK); Horizon Europe (previously Horizon 2020); UK Space Agency (UKSP); INTERREG; and ESA (European Space Agency).

We have worked on grant audits from many sectors, including space, biochemistry development companies, universities, fashion, and software companies.

The grant project, if research and development, may also qualify for R&D Tax Credits under the RDEC scheme.

Timeliness and efficiency

We understand the critical nature of adhering to the deadlines prescribed by your funding providers. Our processes are optimised to conduct grant audits diligently and deliver a timely accountant’s report.

Common challenges and proactive solutions

Project invoice management: We guide you through reviewing project expenditures before the project conclusion to avoid ineligible claims due to ill-timed invoicing.

Eligible expenditure accuracy: Our auditors are vigilant about common pitfalls such as including non-claimable VAT or incorrectly calculated daily rates, providing corrective insights to optimise your claim.

Category-wise allocation: We help ensure that your expenditures are categorised accurately to maximise grant utilisation and avoid overspending on specific categories.

Let us navigate the management of your grant audit requirements with our specialised knowledge, leaving you to focus on the innovative work at the heart of your project. Our team is dedicated to providing a service that is not only thorough and reliable but also proceeds with enthusiasm befitting the exciting and innovative sectors we serve.

How we navigate legal requirements

The cost of a grant audit depends on the type of grant audit and the amount of work that would be required. We operate on a fixed fee basis that would be agreed upon before work commences.

Grant audit procedures

We will request the breakdown of costs being claimed, and then verify that a sample of these costs has been claimed in accordance with the terms and conditions of the grants.

Some grant providers have more detailed reporting requirements which means that more evidence would be required, and some projects require 100% testing.

As terms vary on a grant-to-grant basis, the information required will differ depending on the funding body, but we would expect to require the following information: Payroll reports for the period; Timesheets for the period; Original invoices; Evidence of payment of cost.

Many European grant providers also require us to review employment contracts and procurement procedures.

Common grant audit issues

We conduct many grant audits every month for several different grant providers. Below are the most common issues we encounter:

Costs incurred or paid outside of the eligible dates

Grant funders often stipulate that costs can only be claimed if the invoice date and payment date are within the grant period. We often see claims where payments of large costs have been mistimed making them ineligible. We recommend that before the project ends you review your expenditure and make sure that all project invoices have been paid.

Ineligible VAT costs included in the claim

Generally, VAT and other taxes are not allowed in the claim. We frequently find that claimants have used their bank statements to identify their costs and therefore unintentionally include VAT in their claims.

Miscalculation of daily rates

Daily rates are often understated as companies do not include all eligible costs when calculating the rate. The rate should be based on gross salary, employer’s NICs, and employer’s pension costs. If employee salaries change, the rates may also change, but check your funding requirements as some grants require fixed rates for the period.

Capital usage (depreciation) not meeting requirements

Grant providers usually have specific requirements when it comes to claiming capital usage or depreciation of fixed assets. Check your funder’s requirements if you are claiming these costs.

Overspend on an individual cost category

Most grant funders stipulate the value that can be claimed under each cost category. If you overspend in one cost category but haven’t used your full grant, it is worth speaking to the grant provider rather than missing out on claiming the full amount.

For further information please get in touch with our grant audit experts Jemima King, Laura Hankey and John Holland.

A client-focused approach

In our client-centred audit approach, we place paramount importance on delivering quality services that are tailored to each client’s specific needs. Our professional responsibility is maintaining a clear, open communication channel, ensuring that our clients are well-informed throughout the auditing process.

Cultivating trust through transparency

We recognise that the keystone of any successful audit is the trust between auditor and client. To this end, our approach is heavily focused on transparency. Here is how we achieve this:

Open communication: We initiate dialogue with clear, upfront communication about our audit process, what it involves, and what can be expected at each stage. We dedicate ourselves to being available and responsive, ensuring our clients are never left in the dark.

Clarity of reporting: Our reports are drafted with a high level of precision, avoiding ambiguities and providing detailed insights into our findings. We aim not merely to present numbers and figures but to render information that is actionable and valuable.

Collaborative relationship: We believe that audits are collaborative ventures. Hence, we work closely alongside our clients, understanding that their expertise in their sector is crucial to our audit process.

By embodying these practices, we fulfil our responsibility to offer an unparalleled quality of service, conducted by professionals who are not only serious about their work but also enthusiastic about delivering results that drive organisational improvements.

Meet the grant audit team 

At Richardsons, our grant audit team is renowned for its comprehensive expertise and meticulous approach to each project. Comprised of registered auditors with a vast array of experience across sectors such as biotechnology, higher education, and software development, the team is dedicated to ensuring the highest standards of compliance and quality assurance.

From initial consultations to detailed reviews of financial documents, our specialists handle every aspect of the audit process with precision. They are adept at navigating the complexities of various funding bodies and legal requirements, providing reliable and proactive solutions to optimise your grant utilisation and compliance.

Join us and experience the dedicated, client-focused service that sets our team apart.

Laura Hankey

Laura Hankey

Client Manager

John Holland

Client Director

Jemima King

Jemima King

Partner

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