Conditions of grant

The conditions of grant will vary depending on which body is responsible for issuing the grant. Care should be taken to ensure that any conditions stipulated are met in full. In particular, they will specify:

  • How the money is to be used
  • How reimbursement will be made for expenditure incurred
  • The final date by which claims should be submitted
  • Proper financial records and controls should exist
  • Audit requirements in terms of annual reports
  • Issues relating to the purchase of capital assets
  • Treatment of VAT

There is a requirement for your organisation to confirm that they accept the terms and conditions by signing a copy of the document and returning it to the funding authority responsible for issuing the grant.

If at any stage of the project, an alternative method of achieving the same outcomes is identified, and which would involve the use of approved funds differently from that agreed by the funding body, then they should be consulted before any decision is taken to vary the agreed terms and conditions of the grant. If this is not done then it could lead to the grant expenditure not being reimbursed to the organisation and thus a cost against the organisation’s budget.

Accounting for expenditure

Irrespective of the type of grant, a complete record of expenditure will need to be maintained. There is a statutory obligation to retain financial records (as at current time 6 years plus the current financial year) in accordance with CIPFA Accounting Code of Practice.

Receiving grant income

The frequency of claim will depend on the particular grant conditions - most commonly, this is quarterly in arrears. The provision of reports at the close of each financial year for all grants is a specific requirement and they should be available for scrutiny by external auditors.

Where grant payments are paid in advance this process is still required plus additional supporting documentation to justify expenditure against the advance provided.

Keys to success in grant procurement:

  • Maintain a summary sheet showing what expenditure has been incurred.
  • Readily supply copies of invoices, timesheets, and if possible reports from the general ledger showing the expenditure against the relevant cost centre.
  • Always maintain a summary of the progress made to date against the original project objectives.