Utilisation Certificates

What is a utilisation certificate?

A utilisation certificate (UC) confirms that funds received for a specific purpose — a government grant, CSR contribution, subsidy or loan — were spent on that purpose, in line with the sanction terms. Grantors rely on UCs to release further instalments and close their accounts.

UCs are usually signed by the recipient's head and finance officer, and often certified by a chartered accountant. Formats are prescribed by the grantor: the General Financial Rules formats for central government grants, scheme-specific formats for state subsidies, and donor formats for CSR.

The key terms

What a UC covers:

Sanction order

The document setting out the grant's purpose, amount and conditions.

Opening balance

Unspent funds carried from earlier periods.

Receipts

Grant instalments received, and interest earned on them.

Expenditure

Amounts spent on the approved purpose, by budget head.

Unspent balance

Funds remaining, to be carried forward or refunded.

Physical progress

What was achieved with the money, often reported alongside.

Interest on grants

Often must be reported and returned or adjusted, per the grant terms.

Why it matters

UCs control the flow of funds:

Next instalments

Grantors release further funds only after UCs are received.

Refund risk

Unused or misused funds may have to be refunded with interest.

Future grants

Poor UC history affects eligibility for future funding.

CSR compliance

Companies must confirm CSR funds were used as approved.

Subsidy claims

Subsidies are released on certified utilisation.

Audits

Grantors and auditors check UCs against records.

Legal consequences

False UCs can lead to recovery and action.

Who is this for?

UC formats differ widely; we prepare certificates in the grantor's prescribed format.

Common utilisation certificates

Different grantors, different requirements:

What we'll need from you

Sanction orders

Grant or CSR agreements with conditions.

Bank statements

For the grant account, with interest.

Expense records

Bills, vouchers and payment records.

Procurement records

Quotations and purchase approvals.

Asset registers

Assets bought with grant funds.

Progress reports

Physical progress and outcomes.

Fees depend on the grant size and the volume of transactions.

How we prepare UCs

Our approach:

1. 1

   Review conditions

   Sanction orders and permitted heads are reviewed.

2. 2

   Reconcile funds

   Receipts, interest and balances are reconciled with the bank.

3. 3

   Verify spending

   Expenditure is checked against heads and supporting documents.

4. 4

   Check compliance

   Procurement and other conditions are checked.

5. 5

   Prepare

   The UC is prepared in the prescribed format.

6. 6

   Certify

   It's certified with a UDIN where CA certification is required.

Good grant management

Making UCs easier:

Separate accounts

Keep grant funds in a separate bank account where required.

Head-wise tracking

Record spending by sanctioned budget head.

Interest

Track and report interest earned on grant funds.

Deviations

Get approval before moving money between heads.

Asset records

Keep registers of assets created from grants.

Timely submission

Submit UCs on time to avoid delays in funds.

Benefits and responsibilities