Double funding in grants: how a donor finds it

What a donor means by double funding

Double funding is the same cost reported to two donors, or reported to one donor while already covered by another source. It does not require bad faith: in an organisation running three projects at once it happens through sloppy allocation, and the consequence is the same as for a deliberate scheme. The cost is disallowed, and the organisation’s record suffers.

Where it arises most often

Staff. A coordinator works on two projects, and each report shows a full rate instead of a share.
Rent and utilities. One office, three projects, and the rent lands in full in each report because it is easier than allocating.
Communications, internet, accounting software. Small amounts that nobody allocates on principle.
Equipment. A laptop bought under one grant appears as an in kind contribution in another.
Events. One training event reported to two donors because both themes fit.
Audit and bank fees. One audit covering several projects, charged in full to each.

How the donor finds it

Not by comparing reports between donors, which rarely happens, but through the auditor, who sees the whole accounting record rather than one project:

The ledger for the account, not for the project. The auditor requests the full analytical record for the cost account and sees how the same invoice was posted.
The register of grant agreements. The first question in any grant audit is which other projects ran in the same period.
Primary documents. One invoice cannot support a full cost in two reports; the auditor compares numbers and dates.
Timesheets. Where the same person shows eight hours a day on two projects, the arithmetic does not hold.
Bank statements. A single payment made from one account and reported by two projects is visible straight away.

What needs to be in place

A written allocation policy. An internal document stating how shared costs are split: by headcount, by hours, by floor area, by budget share. Approved by order, with the method fixed before the period rather than chosen afterwards.
Separate analytical accounting by project. Each cost carries a project code from the moment it is posted.
Timesheets for everyone who works on more than one project. Signed monthly, by hours actually worked.
An allocation calculation for each shared cost. A one page working sheet showing the base, the proportion and the amounts per project.
A register of agreements with periods, amounts and budget lines, kept current.

What the auditor checks

The allocation policy, its approval date, and whether it was actually applied.
For every shared cost, the calculation and whether the shares add up to one hundred per cent.
Whether the same invoice numbers appear in more than one project report.
Timesheets against payroll and against contract rates.
Equipment lists across projects, by inventory number.
Where the method changed mid period, whether the change is documented.

Five mistakes

Allocating by eye. Fifty fifty with no basis. The donor asks for the basis, and there is none.
Choosing the method after the fact, fitting it to whichever project has budget left.
Charging a shared cost in full to the project that can afford it. This is double funding where the other project also reports the cost.
No timesheets for part time project staff. Without them a share of salary cannot be supported at all.
The register of agreements lives in someone’s head. The auditor asks for a list of concurrent projects and the organisation cannot produce one.

If duplication has already happened

Correct it yourself before the audit, not after. Recalculate the allocation, prepare a corrected report with an explanatory note, return the excess to the donor where the money has already been received, and record the correction in the accounts. A self identified and corrected error is treated far more leniently than a finding by the auditor, and in most agreements it does not trigger sanctions.

Can one employee be engaged on two grants

Yes, provided total working time does not exceed the normal limit and each project is charged only its share, supported by signed monthly timesheets. What is not acceptable is a full rate in each report.

How should rent be allocated between projects

By any defensible basis fixed in writing before the period: floor area used by each project’s team, headcount, or the projects’ budget share. The important part is that the method is documented, applied consistently, and that the shares total one hundred per cent.

Is an in kind contribution funded by another grant double funding

Yes. An asset or service already paid for from grant funds cannot be presented as the organisation’s own contribution to another project. A contribution must come from a source other than donor money.

What if two donors require different allocation methods

Apply each donor’s method to its own report and keep both calculations, together with a reconciliation showing that the total charged across projects does not exceed the actual cost. That reconciliation is what the auditor will ask for.

If you need a review

We have audited international technical assistance projects since 2000, and allocation of shared costs is where we see the most findings. Tell us how many projects run in parallel and whether you have a written allocation policy, and we will say where the risk sits. A proposal follows once we have reviewed the assignment.