Audit

Audit Requirements

Eligibility of costs

All expenditures in relation to research projects must be checked to ensure that it is in line with the terms and conditions of funding. As a general rule, and in order to justify any expenditure, consideration should be given as to whether the cost:

  • Was included in the original Justification of Resources/Proposal?
  • Was subsequently awarded?
  • Is of direct benefit to the research and proper use of public funds?
  • Is economic, necessary and solely attributable to the project?
  • Is not deemed to be in any way excessive or reckless?

NB: Accountability for compliance with College policy and Funder requirements ultimately rests with the Principal Investigator (PI). The PI is accountable to their Head of Department.

PI / Management responsibilities regarding audit and assurance

  • Ensure that research projects comply with any monitoring and audit requirements.
  • Make sure that researchers charged with carrying out such monitoring and audits have sufficient training, resources and support to fulfil the requirements of the role.
  • Monitor and audit research projects to ensure that they are being carried out in accordance with good practice, legal and ethical requirements, and any other guidelines, adopting a risk based and proportional approach.
  • Consider any requirements for monitoring and audit at an early stage in the design of a project.
  • Must cooperate with the monitoring and audit of their research projects by applicable bodies and undertake such when required.
  • Must cooperate with any outcomes of the monitoring and audit of their research projects. If they become aware of a need for monitoring and audit where it is not already scheduled, they should report that need to the appropriate person(s).

Tab Content: Project Audits

All major funders expect recipient institutions of research funding to provide assurance that public funds are spent efficiently and in a cost-effective manner. Some research projects are subject to financial audits. Scientific (technical) and management risk audits may also take place.

Most grant audits are managed by the Post Award Team, but will require assistance from the PI / Project Team. Please contact them if you are approached by a funder or by a funder’s appointed auditor with regard to arranging an audit.

As part of the reporting process for some research, projects there may be a requirement to include an independent report prepared by an external auditor of factual findings according to the term and conditions of grant.

Tab Content: Financial Audits

Some funders (or their appointed auditors) conduct audits covering Lancaster University 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. Audits are mostly conducted remotely and can last weeks, all funders have the right to audit the research they fund.

If any Principal Investigator or Faculty are approached directly by a funder or by the funder’s appointed auditor, they should contact Post Award Team immediately.

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

    • Copies of invoices and expense claims including relevance to the project
    • Back up for personnel costs, including signed timesheets, Statements of exclusivity, Contract of Employment and any subsequent contract extension or contract change letters
    • Evidence of following procurement process
    • Evidence of due diligence checks
    • Boarding Passes
    • Sign in sheets from events
    • Breakdown of guests from meals and the relevance to the grant

Tab Content: Technical Audits

Technical audits will normally consider

    • 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

Tab Content: Innovate and UKRI Audits

Innovate Audits

  1. Very large grant or special circumstances - grant of £2m or more - Report required with (i) First Claim of Value; (ii) upon each anniversary and (iii) Last Claim
  2. Grant £500k - below £2m - report required with first claim value, last claim only
  3. Grant £100k - below £500k - Last claims only.
  4. Grant £50k - below £100k for all organisations - last claim only
  5. Grant less than or equal to £50k - formal report replaced by statement of expenditure, including eligible costs incurred and paid, signed by a Director of the Participants.

UKRI Assurance Programme

The UKRI Assurance unit undertakes an annual programme of institutional visits on behalf of the Research Councils to provide assurance relating to the regularity, probity and accountability of funds provided.

Further information about the UKRI Assurance Programme.

Tab Content: EC Audits

For European Commission (EC) funded projects there are different certification (audit) requirements for H2020 projects and Horizon Europe

H2020

    • For H2020 projects, a Certificate on the Financial Statements (Audit) covering all reporting periods will be required with the final claim when the total requested reimbursement is €325,000 or more. For Research and Innovation Actions, Innovation Actions & ERC grants, the €325,000 threshold is based on actual and unit costs, excluding Indirect Costs. No audit is required for Marie Skłodowska-Curie Actions. Some H2020 projects may not need to be certified and there is no requirement for Faculty Research Services to apply a percentage adjustment.
    • It should be noted that the Consortium may decide that partners do need to provide certificates on the financial statements even when the European Commission contribution is below the threshold (either €375,000 for FP7 or €325,000 for H2020). In these cases, the costs associated with the certification are not eligible to be charged to the project, so will have to be covered by Faculty.

Horizon Europe

Horizon Europe funding falls under Innovate Rules and is subject to the same audit requirements

Claims are submitted on a quarterly basis with all evidence on the Innovate portal