Financial audit of Innovate UK grants

Audit requirements are set by Innovate UK and are stated within specific grant agreements. The terms are usually generic but exceptions may apply.

It is therefore important to check your award letter and associated documentation carefully as to whether you need an independent audit on the claims you have submitted.

Read guidance about eligible costs on Innovate UK grants.

Guidance for audits of Innovate UK grants

Typically audit thresholds for Innovate UK projects are as follows:

  • Grants <=£50k: Statement of Expenditure, including eligible costs incurred and defrayed, signed by a Director of the named Participant.
  • Grants <£100k: Audit report required as part of last claim only
  • Grants £100k – <£500k: Audit report required as part of first and last claims only
  • Grants £500k – £2m: Audit report required as part of first, last and each anniversary of the project
  • Special circumstances (Grants >£2m): Audit report required with each claim submitted

Irrecoverable VAT is eligible expenditure on Innovate UK grants with effect from the guidance issued on Oct-2015.

Indirect overhead costs are eligible for inclusion if they are incurred directly as a result of undertaking the project. Indirect overhead costs must be extra, which means over and above your business as a usual cost and backed with evidence of staff spending time of the project.  

Where there are specific ‘indirect’ individuals identified working directly on the project, these should be captured in the labour costs together with their attributable overhead.

Claims must be for costs incurred and paid for during the period, except for the final quarter where we may submit a claim for costs incurred but not necessarily paid, provided that the cost is:

  • for labour, overhead and/or travel and subsistence only
  • paid within 30 days of the end of the project
  • included within the final independent accountant’s report

Please ensure all the purchase invoices are paid within the quarter that they are going to be claimed. This is particularly important for the final claim, as invoices which are not paid by the end of the grant won’t meet general eligibility of the costs. 

Note that you need to review the condition of your own award, as there might be variations to these terms. 

Innovate UK requires timesheets for staff for DI staff that work less than 100% of their time on the project.

For staff working 100% of their time on the project, an annual declaration confirming that they worked 100% on the project should be submitted.

Please also note that for DA staff, although timesheet is ideal, a declaration statement which is signed off by the individual on annual basis showing the percentage of time allocated by individual to the project will suffice.

Timesheet templates and declaration form can be accessed via ROO's Sharepoint site.

Please note the declaration for DA staff helps in the full recovery of overhead.

These documents will need to be made available for the auditors during the audit.

Timesheet templates and declaration form can be accessed via ROO's Sharepoint site.