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Research Operations Office

 

Audit requirements are set by Innovate UK and are stated within specific grant agreements. 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.

Audit thresholds for Innovate UK projects

Typically audit thresholds for Innovate UK projects are as follows: 

Grants <=£25k Director’s report only (no audit required)
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

 

Claiming VAT on Innovate UK grants

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

Claiming Overhead on Innovate UK grants

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.

 

Claiming costs

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. 

Here is a typical funding condition of Innovate UK grant. Note that you need to review the condition of your own award, as there might be variations to these terms. 

Time recording

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

For staff that are allocated 100% of their time on the project and have been subject to a JES submission assessment/approval, can submit an annual declaration conforming  that the time stated on the JES submission is correct.

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.

Here is the template timesheet for innovate UK grants.

Here is the template annual declaration that can be used for DI staff working 100% on the grant, or indirect individuals working on the project.

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.

 

Audit deliverable for Innovate UK grants

The following document outlines the evidence and documentation that is generally asked for by auditors when auditing Innovate UK grants. 

Audit Deliverable for Innovate UK grants