Government grants are a great way for businesses to secure the funding they need to realise a new idea or development plan, while boosting their visibility among investors and clients.
They can be time-consuming, however, and usually come full of terms and conditions.
So, if you’re thinking about applying for a government grant for the first time, you’ll need to be aware of the possibility of having to organise a grant audit.
A grant audit is usually carried out partway or towards the end of the grant period, done to ensure that the grant funds are being used as you and the funding body agreed they would be.
It involves an auditor checking records, including:
Grant audits are not always necessary and will only be required if the funder requests one. Government bodies tend to request one as part of their funding programmes, however.
They are typically carried out in a format specified by the funder, with the audit and final report prepared by a registered auditor.
If you’re required to complete a grant audit to get your external funding, one of the most important things to do is appoint an auditor at the acceptance stage of the grant. Don’t leave it too late.
This way, your auditor will better understand your project, giving them a greater opportunity to conduct a more cost- and time-efficient grant audit.
You’ll have to organise the auditor yourself and cover any fees. You should be able to apply to the grant-awarding body to cover the cost of the audit retrospectively, or it may be included within the funding award, so you don’t need to worry too much about the cost.
If the award letter and associated grant conditions don’t include funding to cover the audit, you should still fulfil your audit obligations, though. After all, if you don’t get an auditor in, the funder might respond by clawing back some of the funds they issued at a later date.
It’s about more than bringing an auditor in and wiping your hands of responsibility. The most successful audits will be completed for organisations that apply an audit-focused grant management strategy from day one of the grant.
This starts with keeping detailed documentation of information, including:
Running regular internal reports throughout the lifecycle of the grant to ensure data accuracy and performance is ideal, too. Our audit team can help you prepare for a grant audit and provide the assurance your business needs that it will benefit from grants in full.
