Grant Audit Services
Audit of grant funds and financial reporting
in accordance with donor requirements
We perform independent reviews and audits of grant-funded projects, including the analysis of financial reporting, expenditure eligibility and compliance with the terms of grant agreements. We help grant recipients ensure transparency in the use of funds and proper accountability to donors and partners.
The scope and format of the engagement are determined by the terms of the grant agreement, the Terms of Reference (ToR), donor requirements and the nature of the professional engagement.
The review or audit may be performed upon completion of the project, for a specific reporting period or at another stage stipulated by the grant agreement.
Who needs grant audit services
- - non-governmental and charitable organisations and foundations;
- - social enterprises;
- - consortium partners and sub-grantees;
- - educational, research and healthcare institutions;
- - local government authorities;
- - professional and industry associations;
- - other organisations receiving grant or donor funding.
Grant project audits and reviews are relevant to programmes in the following areas
Infrastructure reconstruction, support for local communities, and social, legal and psychological programmes.
Educational and research programmes, support for healthcare institutions, professional development and social initiatives.
Programmes supporting recovery and development of small and medium-sized enterprises, social entrepreneurship and job creation.
Provision of housing, food, medicines, hygiene products and other assistance to people affected by war or emergencies.
Review of the use of funds under programmes related to defence needs, procurement of equipment and materials, and implementation of socially significant initiatives.
Grant-funded projects may be reviewed using
the following engagement formats
This format is used when the donor or client defines and agrees in advance on a specific set of procedures to be performed. Upon completion of the engagement, the practitioner provides a report of factual findings resulting from the procedures performed, without expressing an audit opinion.
This format applies where the grant agreement requires an auditor’s report on special purpose financial statements or specific elements of financial information.
Such an engagement may include verification of:
- whether funds have been used in accordance with the approved project objectives;
- the availability and proper preparation of supporting documentation;
- consistency between accounting records, financial reporting and banking transactions;
- compliance of expenditure with the terms of the grant agreement.
The type of professional engagement is determined based on the requirements of the specific donor, the terms of the grant agreement and the agreed scope of work.
What a grant project review includes
1. Financial reporting analysis
We review the completeness and arithmetic accuracy of financial reports and their compliance with the approved reporting format, project budget and accounting records.
2. Expenditure eligibility review
We analyse whether expenditures comply with the terms of the grant agreement, budget categories, the project implementation period and other eligibility criteria established by the grant provider.
3. Review of supporting documentation
We examine contracts, invoices, acceptance certificates, delivery notes, payment documents, procurement documentation and other records supporting project expenditure.
4. Review of specific donor requirements
We perform procedures relating to foreign exchange rates, co-financing, payroll, procurement, assets, partner and sub-grantee expenditure, in accordance with the agreed Terms of Reference.
Depending on the grant agreement
and donor requirements, the review may cover
- compliance of expenditure with the approved budget;
- compliance with the expenditure eligibility period;
- correct allocation of expenditure across budget categories;
- availability and proper preparation of primary supporting documents;
- compliance with procurement procedures;
- payroll, consultant and contractor costs;
- correct application of foreign exchange rates;
- accounting for purchased equipment and other assets;
- recognition of co-financing;
- expenditure incurred by partners and sub-grantees;
- consistency of financial reporting with accounting records and bank documentation.
Results of the engagement
Auditor’s report: An auditor’s report is issued following an audit of special purpose financial statements or specific elements of financial information under ISA 800 or ISA 805, depending on the subject matter of the engagement.
Report of factual findings: A report of factual findings is prepared following procedures agreed in advance with the client or grant provider in accordance with ISRS 4400. The report does not contain an audit opinion; it describes the procedures performed and the factual findings identified.
Additional information for management: Where agreed, information provided to management following the procedures performed may include a description of deficiencies identified in project accounting, document management and internal controls, as well as practical recommendations for addressing them.
For a more comprehensive analysis, an organisation may commission a separate assessment of its internal control system.
The format of the final deliverable is determined by the terms of the grant agreement, the Terms of Reference and the nature of the professional engagement.
Why Kreston Ukraine
Kreston Ukraine professionals combine audit expertise, knowledge of international professional standards and an understanding of the specific accounting and documentation requirements applicable to business operations in Ukraine.
Kreston Ukraine has experience in performing independent reviews of programmes involving charitable and donor funding.
As part of such engagements, Kreston Ukraine professionals have performed procedures relating to:
As a result, clients receive an independent assessment of whether funds have been used in accordance with defined programme objectives and financial accountability requirements applicable to donors, partners and other stakeholders.
We maintain clear communication throughout the engagement and adhere to the principles of objectivity, confidentiality and professional ethics.
Our membership in the Kreston Global network enables us to combine an understanding of the Ukrainian environment with international approaches to auditing and assurance engagements.
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Frequently Asked Questions
No. Whether an audit or review is required depends on the terms of the grant agreement, donor requirements, the amount of funding and the rules of the specific programme.
Yes. The scope of procedures is determined in accordance with the grant agreement, Terms of Reference (ToR), donor requirements and the agreed reporting format.
In an audit engagement, the auditor expresses an opinion on the relevant financial information. In an agreed-upon procedures engagement, the practitioner performs specified procedures and reports the factual findings without expressing an audit opinion.
It is advisable to analyse the audit or review requirements at the beginning of the project. This helps ensure that accounting, document management and expenditure controls are properly organised from the outset.
Independent verification of the use of grant funds
Kreston Ukraine can review financial reporting, expenditure eligibility and compliance with the terms of the grant agreement in accordance with donor requirements and the agreed scope of the engagement.