Types of audit and their triggers

There are three situations in which an audit can happen: 

  1. award specific
  2. funder specific
  3. internal

Award specific (contractual) audit

As part of the terms and conditions of some grants, a financial audit carried out by independent external auditors might be required.  

In such cases the Research Office appoints the auditor and arranges the audit.  

Please see a list of the major funders who require these audits, the audit requirements and the eligibility of the associated costs outlined below.  

Please note this is a non-exhaustive list, it is recommended that you review your grant agreement to confirm the specific audit requirements. 

FunderAudit requirementsIs the audit fee recoverable?
EC H2020Required at the end of the grant, where total EC contribution (excluding indirect costs) is equal to, or higher than €325k.  Yes
EC Horizon EuropeRequired at the end of the grant, where total EC contribution (including indirect costs) is equal to, or higher than €430k.  Yes
Innovate UKGrants over £2m: required with all claims 
Grants £500k - below £2m: required for first claim of value, each anniversary of the project and last claim  
Grants £100k - below £500k:  required for first claim of value and last claim only 
Below £100k: required with the last claim only
Below £50k: no audit required 		No
Horizon Europe underwritten by Innovate UK Grants over £2m: required every Q4 and final claim 
Grants £500k - below £2m: required with the Q4 claim and final claim  
Grants £100k - below £500k:  audit required with final claim only (covering the whole duration of the grant) 
Below £100k: no audit required		Yes
US federal funds (A133- Single audit)

Required when an entity is in receipt of federal funds of $750,000/$1,000,000* or more per fiscal year.  

*Threshold from 1 October 2024 onwards 

No
Advanced Research and Invention Agency (ARIA)

As per the Grant agreement, there could be 2 types of audit requirements:

  • at the end of each UK Financial Year and at the end of the grant
  • with each anniversary and at the end of the grant 
Yes, only if included in the grant proposal 
Other UK Government – DESNZ, BEIS, FCDO, DfE 

Audits usually required either:

  • at the end of the grant  
  • at the end of each financial year 
Depending on the specific call/funder eligibility criteria 

 

Audits conducted by the funder

Some funders (or their appointed auditors) conduct audits covering the University's processes and the financial transactions of specific research projects to ensure that expenditure has been incurred according to the terms and conditions of the award. 

These may be award specific, or a number of awards made by the funder might be sampled (e.g. UKRI FAP audit). Below is a list of funders who have previously conducted project audits on University of Cambridge awards and their audit strategy. Note that all funders have the right to audit the research they fund. 

Name of funderHow often they request an audit
European Commission (EC)Annually
UKRIFunder Assurance Programme (FAP) Audit every 3-5 years
WellcomeInstitutional audit conducted every 3-5 years.  
Royal Society

Institutional audit conducted every 3-4 years. 

Internal audits

Grants audit might be carried out as part of the University Internal Audit function, currently delivered by Deloitte. 

What gets looked at during an audit

Financial audits

For financial audits, generally the following items will be looked at:

  • copies of invoices and expense claims
  • billing report and reconciliation with submitted claims
  • back up for personnel costs, including signed timesheet, Contract of Employment and any subsequent contract extension or contract change letters
  • evidence of following procurement process
  • evidence of due diligence checks

Technical audits

For technical audits, generally the followings will be looked at:

  • degree of fulfilment of the project work plan and deliverables for the relevant period
  • continued relevance of the objectives
  • management procedures and methods of projects
  • the beneficiaries’ contributions and integration within the project
  • use of resources in relation to the achieved progress
  • expected impact of the project with focus on dissemination