Grant audit
Specialising in Grant Audit work, Forum Accountant's have over 10 years experience in this field ensuring a smooth process for clients and ensuring maximum eligible costs are claimed whilst adhering to reporting requirements. Due to our specialist knowledge throughout the firm we can ensure fast turnarounds with the Accountant Reports.
Testing approach
In preparing our accountant's report for you, we are required to verify the costs being claimed are accurate, legitimate, and eligible to be claimed in line with the terms of your offering body. In performing our testing, if you can send through a breakdown of the costs in advance we will select a sample of the costs and the information which we will require.
To give you a headstart, below we have summarised some of the most common costs which we come across, and how would test these.
Labour
One of the key parts of your claim is likely to be labour costs. This is claimed as the proportion of an employee's time in the claim period they have spent on the project, multiplied by their cost to the Firm over this time. Our testing therefore revolves around two points:
1. Verifying the time claimed - review of timesheets to verify the labour time is accurate, and no non-project time is included.
2. Review of hourly rate calculations - for this we trace back to payroll reports and recalculate the cost to the Firm of the employee during the period. The standard approach for calculating this is based on Gross, Employer's NI and Employer's Pension costs, divided by the employee's working days, and further divided by their daily working hours.
Many offering bodies permit this to be calculated on an annual basis, with the common acceptance that a full time employee will have 232 working days in the year to allow for annual leave, and 7.5 working hours per day. If differing from this, or the employee is part-time, this can also be permitted, however further evidence will be needed to verify.
Finally, we will need to see copy bank statements to verify net pay has been paid.
Overheads
Where direct overhead costs are claimed, we will require copy invoices to verify their legitimacy, and bank statements to verify defrayment.
However, commonly offering bodies such as UKRI offer the 'indirect approach' where overheads are claimed as a 20% proportion of labour costs.
Where this is the case, we don't need to perform any specific testing in respect of overheads, other than verifying the 20% calculation is correct.
Travel and subsistence
Travel costs are a key element of many claims, with the need to meet with project partners on a regular basis to track progress.
In testing these, alongside verifying the necessity of these costs being incurred for the project we will require:
- Copy expense claims, appropriately authorised by more senior staff. We may also need supporting invoices/receipts to verify these further.
- Bank statements evidencing the payment of these, unless they are paid as part of payroll in which this would be covered by our labour testing.
- For some offering bodies, there are also some restrictions imposed on the types of travel (e.g. first class) which can be claimed, and subsistence costs. For further details on these, you should be able to find within your project offer letter, or your Project Monitoring Officer should be able to assist.
Invoiced expenses
These are common placed for costs such as materials or subcontracting. For items such as these, we will request the following:
- Copy invoices to confirm the relevance of the cost claimed, its acquisition during the project, and the fact the cost is claimed net of VAT (unless VAT is irrecoverable to the firm).
- Copy bank statements to confirm that the cost claimed has been paid for. Where relevant, we may also need to request BACs reports to verify this.
Capital usage
Some grant offering bodies allow for a proportion of the cost of asset usage to be factored in to the grant claim.
For this, a calculation is made of the cost of the asset, residual value at the end of the project and % element that the asset will be used.
In testing these, we will request copy invoices to verify the asset value, bank statements to confirm they are paid for where acquired in the period, and assess the reasonableness of the proportion usage claimed.
Grant money received
Finally, we check to bank statements that the grants claimed for earlier stages have been received as expected.
This enables us to verify the costs we are looking at are accurate.
For some grant types / offering bodies, this is impacted upon the stage of the grant and funding distributed to date; which we are aware of.
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