Why it matters
A utilisation certificate is often the condition for the next instalment of a grant. Late or unclear certificates hold up funding; certificates that don't reconcile with the accounts can lead a donor to ask for money back.
The simplest way to make them easy is to account for each grant separately from the start — a separate ledger or cost centre, and expenses tagged to the grant and budget head as they're booked.
Documents required
- Sanction letter or grant agreement, with the approved budget heads.
- Bank statement for the grant account, or the account where the grant was received.
- Project-wise ledger and expense vouchers.
- Details of interest earned on unspent grant money.
- Any conditions on procurement, salaries or assets in the grant terms.
- The grant-giver's utilisation certificate format.
How we prepare it
Read the grant terms
Budget heads, permitted expenses, treatment of interest and the reporting format.
Check the project accounts
Expenses are traced to vouchers and matched to budget heads; ineligible expenses are flagged.
Reconcile
Grant received, spent and unspent reconciled with the bank account.
Certify
The certificate is prepared in the donor's format and signed with a UDIN.
Practical notes from our engagements
- Grant money mixed with general funds. Without separate accounting, proving utilisation becomes a reconstruction exercise.
- Interest on unspent grants ignored. Many grant terms treat that interest as part of the grant. It needs reporting.
- Spending outside the approved heads. Re-appropriation between heads usually needs the donor's approval first.
How we handle utilisation certificates
We set up grant-wise accounting where it isn't already in place, check expenditure against the grant terms, and certify in the donor's format. Every certificate we issue carries a UDIN — the Unique Document Identification Number ICAI has required on certificates signed by practising Chartered Accountants since 2019. The recipient can check it at udin.icai.org.
Related services
Frequently asked questions
What is a utilisation certificate?
A certificate showing how a grant was used — amount received, interest earned, amount spent by approved head, and the unspent balance.
Who can issue a utilisation certificate?
It's signed by the grantee organisation and, where the grant-giver requires, certified by a Chartered Accountant.
Is there a standard format?
Each grant-giver prescribes its own. Central government grants follow the format under the General Financial Rules.
What if not all of the grant was spent?
The certificate shows the unspent balance. The grant terms decide whether it's carried forward or refunded.
Do CSR donors need utilisation certificates?
Usually yes. A company's board has to satisfy itself that CSR funds were used as approved, so donors ask implementing agencies for utilisation reporting.