What is Grant Audit
An audit grant is usually carried out partway or towards the end of grant period, done to ensure that the grant funds are being as you and the funding body agreed they would be.
It involves an auditor checking records including:
1) Allowable cost and legitimacy of an expense purchased with grant money.
2) Cash Management.
3) Programme income generated by the grant and programme performance.
Grant Audit is typically carried out in a format specified by the funder, with the audit and final report preparation carried out by a registered auditor. They are not always necessary and will only be required if the funder requests one.
Types of Grant Audit:
- Categorical grants: Specify how money can be spent.
- Block grants: fewer rules on how money can spend.
- General Revenue Sharing: Few or no string attached.
Focus on Detailed Documentation:
- Project timelines, deliverable and milestones.
- Program income and budgets.
- Sub-recipient activities.
- Financial expenditure and budget narratives.
- Status of funds spent.
Objective of Grant Audit:
- Grant fund are being managed in compliance with applicable laws and regulations.
- Financial statements are presently accurately, in accordance with generally accepted account principles.
- Funds are expended in accordance with the terms applicable of agreement.
- Financial reports contain accurate and reliable financial data and are in presented in accordance with the terms of applicable agreement.
- Accounting system is integrated with inadequate internal fiscal and management controls to provide full accountability for revenue.
Types of Grant Audit fraud:
- Extortion
- Deception
- Bribery
- Theft
- Conspiracy
- Embezzlement
- Misappropriating funds for personal purpose
- Collusion
- Concealing material facts
Preventing Against Grant Fraud Audit Finding:
- Bank statements reconciliations.
- Training
- Whistle blowing
- Suspension and department
- Keeping through documentation
- Risk assessment
- Internal Controls