Utilisation Certificates for Government Grants: A Practical Guide

Government grants to institutions, NGOs and businesses come with conditions, and the utilisation certificate (UC) is how the grantee shows they were met. Delays or errors in UCs hold up further funding. This guide explains the essentials.

Formats

Central government grants generally use formats under the General Financial Rules, 2017, or scheme-specific formats. State governments and agencies prescribe their own. Always use the format in the sanction order.

What a UC Shows

• Opening unspent balance.
• Grants received during the period, with sanction references.
• Interest and other income earned on grant funds.
• Expenditure incurred, by sanctioned head.
• Closing unspent balance.
• A statement that conditions were met, and often physical progress.

Interest on Grant Funds

Many grants require interest earned on unspent funds to be reported and refunded, or adjusted against future releases. Don't treat it as the grantee's own income without checking the terms.

Digital Fund Flow

Central grants are increasingly released through systems that track spending in real time, with designated accounts for schemes. Grantees must record expenditure in these systems as well as their own books.

Common Problems

• Spending on heads not sanctioned.
• Mixing grant funds with other funds.
• Missing bills or procurement records.
• Unreported interest.
• Late submission.

Getting It Right

1. Read the sanction conditions at the start.
2. Keep a separate account and ledger for each grant where required.
3. Record spending by head as it happens.
4. Reconcile monthly.
5. Prepare UCs well before deadlines.

Getting Help

Think Filing prepares and certifies utilisation certificates for grant recipients.