{"id":4375,"date":"2026-10-02T22:34:38","date_gmt":"2026-10-02T19:34:38","guid":{"rendered":"https:\/\/audit-mk.com.ua\/vnesok-naturoiu-ta-spivfinansuvannia\/"},"modified":"2026-10-02T22:34:38","modified_gmt":"2026-10-02T19:34:38","slug":"vnesok-naturoiu-ta-spivfinansuvannia","status":"publish","type":"page","link":"https:\/\/audit-mk.com.ua\/en\/vnesok-naturoiu-ta-spivfinansuvannia\/","title":{"rendered":"In kind contributions and co-financing: what evidence is needed"},"content":{"rendered":"<p><\/p>\n<h2>Co-financing and in kind contributions: how they differ<\/h2>\n<p>Most donors require the organisation to contribute part of the project cost itself, commonly between five and twenty per cent. There are two ways to do it, and they are not interchangeable.<\/p>\n<ul>\n<li><b>Co-financing, or a cash contribution.<\/b> The organisation&#8217;s own money, spent on budget lines and passing through its own accounts. Easy to support: bank statements, invoices, acts.<\/li>\n<li><b>An in kind contribution.<\/b> Goods, services, premises or work provided without payment and valued in money. Hard to support, and this is where almost all the findings are.<\/li>\n<\/ul>\n<p>Which of the two a donor will accept, and in what proportion, is set by the agreement. Some accept in kind up to the full required percentage, some only in part, some not at all. That clause is worth reading before the budget is built, not after.<\/p>\n<h3>What a donor will accept as an in kind contribution<\/h3>\n<ul>\n<li><b>Volunteer time.<\/b> The most common form, and the most frequently challenged.<\/li>\n<li><b>Premises<\/b> owned by the organisation and used by the project.<\/li>\n<li><b>Equipment<\/b> owned by the organisation, valued by depreciation over the period of use rather than at purchase price.<\/li>\n<li><b>Services provided free of charge<\/b> by a third party: design, legal advice, translation, venue hire.<\/li>\n<li><b>Materials and goods<\/b> donated by a third party.<\/li>\n<li><b>Staff time<\/b> of the organisation&#8217;s own employees, where their salary is not charged to the project.<\/li>\n<\/ul>\n<h3>How to value it<\/h3>\n<p>The rule the donor applies is the market value of a comparable good or service in the project&#8217;s region at the time it was provided, and it must be supported by something external to the organisation:<\/p>\n<ul>\n<li><b>Volunteer hours.<\/b> The rate for comparable paid work. Supportable by a statistical average wage for the occupation, by the organisation&#8217;s own payroll for the same role, or by two or three quotations.<\/li>\n<li><b>Premises.<\/b> The rent for comparable space in the same locality, by quotations or by listings captured with a date.<\/li>\n<li><b>Equipment.<\/b> Depreciation for the months of project use, taken from the fixed asset register.<\/li>\n<li><b>Donated services and goods.<\/b> The provider&#8217;s own invoice marked as free of charge, or its price list.<\/li>\n<li><b>Staff time.<\/b> Actual salary for the hours worked on the project, from timesheets and payroll.<\/li>\n<\/ul>\n<p>Value the contribution at the time it is provided and keep the evidence then. A quotation obtained a year later for an audit carries little weight.<\/p>\n<h3>Documents for each type<\/h3>\n<ul>\n<li><b>Volunteers:<\/b> a volunteering agreement, a timesheet signed by the volunteer and the coordinator, and the rate calculation with its source.<\/li>\n<li><b>Premises:<\/b> title or lease documents, a use schedule or act showing the period and area, and the rate calculation.<\/li>\n<li><b>Equipment:<\/b> the fixed asset register entry, the depreciation calculation, and a use act.<\/li>\n<li><b>Free services:<\/b> an act of acceptance, a letter from the provider confirming the service was free, and the valuation.<\/li>\n<li><b>Donated goods:<\/b> a transfer act, a quantity and value list, and the valuation source.<\/li>\n<li><b>Own staff:<\/b> timesheets, payroll, and confirmation that the same salary is not charged to the project budget.<\/li>\n<\/ul>\n<p>In every case the in kind contribution is also recorded in the accounts and shown in the report at the same value. A contribution that exists only in the narrative report and not in the books is a finding.<\/p>\n<h3>What a donor will not accept<\/h3>\n<ul>\n<li><b>Anything already paid for from grant funds<\/b>, under this project or another. That is double funding.<\/li>\n<li><b>Valuations without an external source.<\/b> An internal memo stating a rate is not evidence.<\/li>\n<li><b>Equipment at purchase price<\/b> where it was bought years earlier and is used for part of the project.<\/li>\n<li><b>Volunteer hours with no timesheet,<\/b> or a timesheet signed only by the coordinator.<\/li>\n<li><b>The founder&#8217;s or director&#8217;s time<\/b> where it duplicates duties already paid for.<\/li>\n<li><b>Contributions provided outside the project period.<\/b><\/li>\n<\/ul>\n<h3>What the auditor checks<\/h3>\n<ul>\n<li>Whether the stated percentage of contribution was actually achieved, and the arithmetic behind it.<\/li>\n<li>The valuation source for each material item of contribution.<\/li>\n<li>Timesheets against the volunteering agreements, and signatures.<\/li>\n<li>Whether the contribution is recorded in the accounts and at what value.<\/li>\n<li>Whether the same items appear as a contribution in another project.<\/li>\n<li>Dates: whether the contribution falls inside the project period.<\/li>\n<\/ul>\n<h3>What to do at the start of a project<\/h3>\n<ol>\n<li>Read the clause on the contribution and establish whether in kind is accepted and up to what share.<\/li>\n<li>Decide which items will make up the contribution and how each will be valued, and write it down.<\/li>\n<li>Gather the valuation evidence now: quotations, listings, price lists, with dates.<\/li>\n<li>Start a contribution register from month one and update it monthly rather than at the end.<\/li>\n<li>Agree with the accountant how each contribution is posted, so that the report and the books agree.<\/li>\n<\/ol>\n<details>\n<summary>Can the work of the organisation&#8217;s own staff count as an in kind contribution<\/summary>\n<p>Yes, where their salary is not charged to the project budget, the hours are supported by timesheets, and the valuation is actual pay for those hours. Charging the salary to the project and also counting it as a contribution is double funding.<\/p>\n<\/details>\n<details>\n<summary>What rate should a volunteer hour be valued at<\/summary>\n<p>The rate for comparable paid work in the same region at the time the work was done. Supportable by official statistics for the occupation, by the organisation&#8217;s own payroll for the same role, or by two or three quotations kept with their date.<\/p>\n<\/details>\n<details>\n<summary>Does rented premises count as a contribution<\/summary>\n<p>Rent paid by the organisation from its own funds is a cash contribution, not an in kind one, and is supported by payment documents. Premises owned by the organisation and provided free to the project are an in kind contribution, valued at comparable market rent. Premises paid for from grant funds are neither.<\/p>\n<\/details>\n<details>\n<summary>What happens if the required percentage of contribution is not met<\/summary>\n<p>Most donors reduce the grant proportionately, so the shortfall becomes a repayment. The position is recoverable while the project is running: notify the donor as soon as the shortfall is visible and agree either additional contribution items or a budget reduction in writing.<\/p>\n<\/details>\n<h3>If you need a review<\/h3>\n<p>We have audited international technical assistance projects since 2000, and in kind contributions are the item we most often have to qualify for lack of valuation evidence. Tell us what makes up your contribution and what percentage is required, and we will say what documents to prepare. A proposal follows once we have reviewed the assignment.<\/p>\n<p><\/p>","protected":false},"excerpt":{"rendered":"<p>How co-financing differs from an in kind contribution, how to value volunteer hours, premises and equipment, and what documents each type of contribution needs.<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-4375","page","type-page","status-publish","hentry"],"aioseo_notices":[],"aioseo_head":"\n\t\t<!-- All in One SEO 5.0.2.1 - aioseo.com -->\n\t<meta name=\"description\" content=\"Co-financing and in kind contributions: how they differ Most donors require the organisation to contribute part of the project cost itself, commonly between\u2026\" \/>\n\t<meta name=\"robots\" content=\"max-image-preview:large\" \/>\n\t<link rel=\"canonical\" href=\"https:\/\/audit-mk.com.ua\/en\/vnesok-naturoiu-ta-spivfinansuvannia\/\" \/>\n\t<meta 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