Introduction

If a charitable trust, society, or Section 8 company in India has received a grant, donation, or CSR contribution, the donor, bank, regulator, or tax department will sooner or later ask one question: “How was the money actually spent?” The document that answers this question is the Fund/Grant Utilisation Certificate.

As a practising Chartered Accountant, I issue this certificate regularly for trusts receiving CSR grants, foreign contributions under FCRA, government grants, and donor-restricted funds. This guide explains, in plain English, what the certificate is, who can issue it, the law behind it, the process, the format, and the most common reasons such certificates get rejected by banks, donors, or government departments.

This article covers the certificate as it applies broadly to charitable trusts, registered societies, and Section 8 companies (collectively referred to as “Trusts” or “Institutions” in this guide), and is updated for the Income-tax Act, 2025 transition and the FCRA amendments effective in 2026.

What is a Fund/Grant Utilisation Certificate?

A Fund/Grant Utilisation Certificate (also called a Utilisation Certificate or “UC”) is a written certification, usually issued by a Chartered Accountant, confirming that a specific sum of money received by a charitable trust or institution — as a donation, grant, CSR contribution, or foreign contribution — has been spent strictly for the purpose for which it was given.

It is not the same as a statutory audit report. A statutory audit gives an opinion on the financial statements as a whole. A Utilisation Certificate is a narrower, purpose-specific certificate that answers one question: did the money go where it was supposed to go?

Purpose of the Fund/Grant Utilisation Certificate

The certificate exists to create independent, third-party assurance that money has been used as intended. In my practice, I see it requested for these purposes:

• Donor assurance: Corporates, foreign foundations, and individual donors want proof their contribution reached the intended beneficiaries or project.
• CSR compliance: Companies funding a project through a trust need an Independent Practitioner’s Report on Utilisation of CSR Funds to satisfy their own Section 135 Companies Act obligations.
• FCRA compliance: Trusts receiving foreign contributions must report utilisation in Form FC-4, supported by a CA certificate.
• Income-tax compliance: To support exemption claims under Sections 11, 12, and 12A/12AB, trusts must demonstrate that income was “applied” for charitable purposes.
• Government grant accountability: Many Central and State schemes release the next instalment of a grant only after a UC for the previous instalment is submitted.
• Bank and loan purposes: Where a trust has borrowed or been sanctioned project funding, banks may seek utilisation proof before releasing further tranches.

Why is a Fund/Grant Utilisation Certificate Required?

The certificate is required because charitable money carries a higher duty of accountability than ordinary commercial transactions. Three forces make it necessary:

1. Legal accountability: Tax exemption, FCRA registration, and CSR eligibility are all conditional on funds being used for the stated charitable purpose. Regulators need documentary proof, not just trustee assurance.
2. Donor protection: Donors — especially foreign donors, embassies, and large corporates — cannot independently verify ground-level spending. An independent CA certificate substitutes for that verification.
3. Prevention of diversion of funds: Utilisation certificates are one of the few practical checks against charitable funds being diverted to unrelated activities, related-party benefit (Section 13 of the Income-tax Act), or personal use of trustees.

Practical example: A Mumbai-based trust receives a ₹50 lakh CSR grant from a listed company for a rural health camp project. The company’s own auditors will not sign off on the company’s CSR spend unless the trust produces a CA-certified utilisation report showing the ₹50 lakh was spent on the health camp, and not diverted to administrative overheads beyond permissible limits.

Who Can Issue a Fund/Grant Utilisation Certificate?

In practice, for donor, CSR, and FCRA purposes, the certificate is almost always issued by a Chartered Accountant in practice, because the certification requires examination of books of account, vouchers, and bank records — work that falls within the CA’s domain under the Chartered Accountants Act, 1949.

Legal Provisions and Applicable Laws

No single law defines “Fund/Grant Utilisation Certificate” as a standalone statutory term. Instead, the requirement arises indirectly from several laws and regulatory frameworks:

Professional note: Because the Income-tax Act, 2025 framework began applying from Tax Year 2026-27, trusts and their CAs must confirm the correct current form (Form 10B/10BB under the 1961 Act for earlier years, or the corresponding Form 112 framework for later years) before relying on past formats.

When is a Fund/Grant Utilisation Certificate Required?

Who Needs a Fund/Grant Utilisation Certificate?

Documents Required for a Fund/Grant Utilisation Certificate

Before a CA can certify utilisation, the trust must provide a complete documentation trail. Below is the checklist I use in practice:

• Trust deed / Memorandum & Articles of Association (for Section 8 companies) / Society registration certificate and byelaws
• 12A/12AB registration certificate and 80G approval (where applicable)
• FCRA registration certificate or prior permission letter (for foreign contribution cases)
• CSR-1 registration acknowledgment (for CSR fund cases)
• Grant sanction letter, donation agreement, or MoU specifying the purpose and conditions of the fund
• Bank statements of the designated/FCRA account showing receipt and outflow of the specific fund
• Cash book, ledger, and bank reconciliation statement for the relevant period
• Vouchers, invoices, and bills supporting each item of expenditure claimed against the grant
• Board/trustee resolution authorising the project and expenditure
• Project completion report, photographs, or third-party confirmation of activity (where the donor requires activity-level proof, not just financial proof)
• Statement of income and expenditure and balance sheet for the relevant financial year
• Previous audit report (Form 10B/10BB or equivalent) and previous utilisation certificates, if any
• PAN, TAN, and Darpan ID (NGO Darpan) of the trust, where applicable
• Details of any unspent balance carried forward and the reasons for non-utilisation

Information Required by the Chartered Accountant

Beyond documents, the CA needs specific information from the trustees/management to issue an accurate certificate:

• Exact amount of the grant/donation received, date of receipt, and the donor’s name
• The specific purpose for which the fund was sanctioned, as stated in the sanction letter/agreement
• Period over which the fund is to be utilised (single year, multi-year, or “until fully spent”)
• Break-up of actual expenditure by head (e.g., materials, salaries of project staff, travel, administrative overheads)
• Confirmation of whether any part of the fund remains unutilised at the reporting date, and where it is parked
• Confirmation of compliance with administrative expense caps (e.g., FCRA’s administrative expense limit, or donor-specified overhead caps)
• Whether any related-party transaction (Section 13(3) persons) was involved in the expenditure
• Whether the fund was kept in a separate bank account as required by the grant conditions or FCRA

Process of Issuing a Fund/Grant Utilisation Certificate

1. Engagement and scope confirmation: The CA agrees the scope, purpose, and intended user of the certificate with the trust — this determines the applicable format and assurance level (Guidance Note on Reports or Certificates for Special Purposes).
2. Document collection: The trust submits the checklist of documents listed above.
3. Verification of receipt: The CA traces the grant/donation receipt to the bank statement and the books of account.
4. Verification of utilisation: The CA examines vouchers, invoices, and payment records to confirm that expenditure matches the sanctioned purpose, within the sanctioned period.
5. Reconciliation: The CA reconciles the grant ledger with the income and expenditure account, balance sheet, and bank reconciliation statement, identifying any unspent balance.
6. Compliance check: The CA checks compliance with applicable conditions — e.g., FCRA administrative expense limits, CSR Schedule VII alignment, or donor-specific restrictions.
7. Drafting the certificate: The CA drafts the certificate using the prescribed format (where one exists, e.g., FC-4) or a standard special-purpose certificate format.
8. UDIN generation: The CA generates a Unique Document Identification Number (UDIN) on the ICAI UDIN portal, mandatory for all CA certificates since 2019.
9. Signing and sealing: The CA signs the certificate with membership number, firm registration number (if applicable), and seal.
10. Submission: The trust submits the certificate to the donor, government department, FCRA portal, or bank, as applicable.

Sample Format of a Fund/Grant Utilisation Certificate

The format below is illustrative only. Where a statutory format exists (such as FC-4’s CA certificate or the ICAI-recommended CSR utilisation report format), that specific format must be used instead.

INDEPENDENT CHARTERED ACCOUNTANT'S CERTIFICATE
ON UTILISATION OF FUNDS / GRANT

To,
[Name of Donor / Grant-giving Company / Authority]

This is to certify that [Name of Trust/Institution], having its registered
office at [Address], PAN: [PAN], registered under [12A/12AB Registration
No. and date], has received a grant/donation of Rs. [Amount] from
[Donor Name] vide [Sanction Letter/Agreement dated ___] for the purpose
of [stated purpose, e.g., "construction of a rural health centre"].

Based on examination of the books of account, bank statements, vouchers,
and supporting records produced before us, we certify that:

1. The above sum of Rs. [Amount] was received on [date(s)] in the
   designated bank account no. [_____] maintained with [Bank Name].

2. Out of the above, a sum of Rs. [Amount utilised] has been utilised
   during the period [from] to [to] for the stated purpose, as per
   the break-up given in Annexure A.

3. The balance unutilised amount of Rs. [Amount], if any, continues to
   be held in the designated bank account as on [date].

4. The funds have been utilised strictly for the purpose for which
   they were sanctioned and no diversion to any other purpose has
   come to our notice.

This certificate is issued at the specific request of the management
of [Trust Name] for submission to [Donor/Authority Name] and should
not be used for any other purpose.

For [CA Firm Name]
Chartered Accountants
Firm Registration No.: [_____]

CA [Name]
Membership No.: [_____]
UDIN: [_____]
Place: [_____]
Date: [_____]

Note: This is a generic illustrative format. Statutory formats (FC-4 CA certificate, ICAI’s Independent Practitioner’s Report on Utilisation of CSR Funds) must be followed where mandated.

How the CA Verifies the Information

A responsible CA does not simply accept the trustees’ word. Standard verification steps include:

• Vouching: Every significant item of expenditure is traced to a supporting invoice, bill, or receipt.
• Bank reconciliation: Receipt and payment entries in the books are matched against the bank statement of the designated account.
• Physical/on-site verification (where material): For larger grants, the CA may visit the project site, examine assets created (e.g., a constructed building, equipment purchased), and review photographs or third-party confirmations.
• Related-party check: Payments are screened against the list of persons specified under Section 13(3) of the Income-tax Act to rule out prohibited benefit to interested persons.
• Analytical review: Expenditure patterns are compared against the budget/sanction letter to flag unusual variances.
• Management representation: A written representation letter is obtained from the trustees on matters not independently verifiable (e.g., confirming no other use of funds).
• Compliance with ICAI Standards on Auditing: Where the engagement is an audit-equivalent assurance, applicable Standards on Auditing (e.g., SA 230 on documentation, SA 500 on audit evidence) guide the verification depth.

Common Reasons for Rejection

Validity Period of the Fund/Grant Utilisation Certificate

Unlike a Net Worth Certificate (which has a point-in-time validity, typically 3-6 months for the recipient’s purposes), a Fund/Grant Utilisation Certificate is tied to a specific grant and reporting period — it does not have an “expiry date” in the same sense.

• For a one-time grant fully utilised within a financial year, the certificate is a one-time, period-specific document — no renewal needed unless the donor asks for a fresh certificate for a subsequent tranche.
• For multi-year grants, a fresh utilisation certificate is typically required for each financial year or each instalment release, until the entire grant is utilised and a final/closure certificate is issued.
• For FCRA purposes, utilisation reporting is annual, aligned with the FC-4 annual return filing cycle (by 31 December each year, covering the preceding financial year).
• For CSR purposes, the Independent Practitioner’s Report is typically obtained for each financial year in which CSR funds were utilised by the third party/trust.

Difference Between Related Certificates

Trustees and donors often confuse the Fund/Grant Utilisation Certificate with other CA certificates. Here is how they differ:

A Fund/Grant Utilisation Certificate is distinct from all of the above because it certifies application of a specific sum for a specific purpose, not the general financial position or income of the entity.

Professional Responsibilities of the Chartered Accountant

• Comply with the ICAI Guidance Note on Reports or Certificates for Special Purposes before issuing any utilisation certificate.
• Maintain independence — a CA who is also a trustee, employee, or has a financial interest in the trust should not certify utilisation of funds for that trust, per the Code of Ethics.
• Generate and quote a valid UDIN on every certificate, as mandated by ICAI since 2019.
• Exercise professional scepticism — verify, rather than merely accept, management’s claims about fund usage.
• Maintain proper working papers evidencing the verification carried out, in line with SA 230 (Audit Documentation), even though this is a special-purpose certificate rather than a statutory audit.
• Under the FCRA 2024 amendment, specifically assess and disclose any non-compliance with FCRA provisions noticed during the engagement.
• Decline to issue the certificate, or qualify it, if sufficient appropriate evidence of utilisation is not available — never sign a “clean” certificate to oblige the client.
• Clearly state the limited purpose and intended user of the certificate to prevent it from being relied upon for unrelated purposes.

Penalty for Misrepresentation

Misrepresentation in a Fund/Grant Utilisation Certificate can expose both the trust and the certifying CA to serious consequences:

• For the trust/trustees: Loss of 12A/80G registration, withdrawal of FCRA registration, recovery of CSR funds with penalty, denial of income-tax exemption, and possible prosecution under the Income-tax Act or FCRA for furnishing false information.
• For the Chartered Accountant: Disciplinary action by ICAI under the Chartered Accountants Act, 1949 for professional misconduct, which can include reprimand, fine, suspension, or removal of membership. Under the 2024 FCRA amendment, a CA’s certification carries enhanced exposure where non-compliance is not properly reported.
• Under FCRA: Section 35 of the FCRA provides for imprisonment and/or fine for false statements/declarations connected with foreign contribution, and CAs who knowingly assist non-compliant certification can also face scrutiny.
• Under the Companies Act: A company relying on a false CSR utilisation certificate from a third party can face its own CSR non-compliance penalties under Section 135(7), separate from any action against the trust or its certifying CA.

Frequently Asked Questions

What is a Fund/Grant Utilisation Certificate?

It is a certificate, usually issued by a Chartered Accountant, confirming that a specific grant or donation received by a charitable trust has been spent for the purpose for which it was given.

Who can issue a Fund Utilisation Certificate for a charitable trust?

A practising Chartered Accountant is the standard issuer. In some CSR cases, the trust’s own statutory auditor issues the Independent Practitioner’s Report.

Is CA certification mandatory for fund utilisation certificates?

For FCRA Form FC-4 and ICAI-recommended CSR utilisation reports, yes, CA certification is effectively mandatory. For purely donor-requested certificates without a specific scheme requirement, the donor decides whether CA certification is required.

How much does a Fund Utilisation Certificate cost?

Fees vary by CA firm, grant size, and complexity of verification, typically based on the volume of transactions and documentation involved. There is no fixed government fee; it is a professional fee negotiated with the CA.

Can I get a Fund Utilisation Certificate online?

The verification work itself requires document review, but many CAs now complete the engagement remotely via digital document sharing, with UDIN-verified certificates delivered electronically.

What is the validity period of a Fund Utilisation Certificate?

It is tied to the grant period reported, not a fixed calendar validity. A fresh certificate is needed for each new grant period or instalment.

Is a Fund Utilisation Certificate accepted by embassies?

Embassies more commonly ask for personal financial certificates (like Net Worth Certificates) for visa purposes. Fund utilisation certificates are primarily used for donor, CSR, and FCRA reporting, not personal visa applications.

Can a bank reject a Fund Utilisation Certificate?

Yes, if it is incomplete, lacks a UDIN, does not match bank statements, or does not follow the bank’s required format.

Can an NRI-funded trust obtain a Fund Utilisation Certificate?

Yes. If an NRI or foreign entity has funded an Indian trust, the trust’s CA can issue a utilisation certificate, subject to FCRA compliance if the funding qualifies as foreign contribution.

What documents are required for a Fund Utilisation Certificate?

Trust deed/registration, 12A/80G certificates, grant sanction letter, bank statements, vouchers, ledgers, and the previous year’s audit report, among others listed in this guide.

Is a UDIN mandatory on this certificate?

Yes. ICAI has mandated UDIN on all certificates issued by practising Chartered Accountants since 2019, including fund utilisation certificates.

What is the difference between a statutory audit report and a Fund Utilisation Certificate?

A statutory audit report gives an opinion on the financial statements as a whole; a utilisation certificate is narrower, focused specifically on whether a particular fund was spent for its stated purpose.

Who requests a Fund Utilisation Certificate from a trust?

Donors, CSR-funding companies, government departments administering grants, FCRA authorities, and sometimes banks financing a specific project.

Can a trust issue its own utilisation certificate without a CA?

Trustees can prepare an internal utilisation statement, but most donors, regulators, and CSR companies require independent CA certification for credibility and compliance.

What happens if funds are not fully utilised within the grant period?

The unspent balance must be disclosed in the certificate along with reasons; depending on the grant terms, it may need to be returned to the donor or carried forward with permission.

Does a Fund Utilisation Certificate cover FCRA funds?

Yes. FCRA-registered trusts must submit a CA certificate as part of their Form FC-4 annual return, covering receipt and utilisation of foreign contribution.

What is the format for FCRA utilisation certification?

FCRA prescribes a specific CA certificate format within Form FC-4 under Rule 17 of the Foreign Contribution (Regulation) Rules, 2011, which must be used rather than a generic format.

Is a Fund Utilisation Certificate required for CSR grants?

Yes. ICAI advises companies to obtain an Independent Practitioner’s Report on Utilisation of CSR Funds from the implementing trust’s/NGO’s CA whenever CSR is executed through a third party.

What is the penalty for a false utilisation certificate?

The trust risks loss of tax exemption, FCRA cancellation, or recovery of funds; the certifying CA risks ICAI disciplinary action, and under FCRA, potential statutory penalties for false certification.

Can the certificate be issued for a partially utilised grant?

Yes, provided it clearly states the amount utilised, the amount unutilised, and the reasons, rather than implying full utilisation.

Does the certificate need to mention the bank account number?

Yes, in practice, identifying the designated bank account strengthens the certificate’s credibility and is often specifically required by FCRA and CSR formats.

Is the certificate the same as a donation receipt?

No. A donation receipt acknowledges receipt of money; a utilisation certificate confirms how that money was subsequently spent.

Who verifies the authenticity of a CA’s UDIN?

Anyone can verify a UDIN on the ICAI UDIN portal by entering the UDIN number, which confirms the certificate was genuinely issued by the named CA.

Can a Cost Accountant issue this certificate instead of a CA?

Generally no, for donor/CSR/FCRA utilisation reporting, since this is fundamentally a financial verification function associated with the CA’s audit domain, though CMAs and CS professionals certify related forms like CSR-1.

How long does it take to get a Fund Utilisation Certificate?

Timeline depends on documentation readiness; straightforward cases with complete records can be completed within a few days, while complex multi-tranche grants take longer.

What if the trust has multiple donors funding the same project?

The CA should certify utilisation donor-wise or maintain clear fund-wise allocation so each donor’s certificate reflects only their contribution and its specific utilisation.

Is GST applicable on grant funds received by a trust?

Generally, pure grants/donations without any service obligation are not subject to GST; however, if the grant has a quid pro quo service element, GST implications need separate examination.

Can the certificate be backdated?

No. A CA must date the certificate on the date of actual signing after completing verification; backdating is professional misconduct.

What is the role of the trust deed in this certification?

The trust deed defines the charitable objects; the CA checks that fund utilisation is consistent with those objects and any specific donor conditions.

Does this certificate replace the income-tax audit report (Form 10B/10BB)?

No. The income-tax audit report is a separate statutory filing covering the trust’s overall application of income; the utilisation certificate is donor/grant-specific and supplementary.

What changed for trust audit reporting from Tax Year 2026-27?

Under the Income-tax Act, 2025 framework, the erstwhile Form 10B/10BB reporting structure is being aligned with new form numbering (commonly referenced as Form 112), so trusts and CAs must confirm the applicable form for the relevant tax year.

Can a single certificate cover multiple grants from the same donor?

Yes, provided each grant is separately identified, dated, and reconciled within the certificate rather than being shown as one consolidated, unidentifiable figure.

Is a site visit mandatory before issuing the certificate?

Not mandatory in every case, but recommended for larger grants or where physical assets are created, to corroborate the financial records with ground reality.

What if a donor has its own prescribed certificate format?

The CA should use the donor’s prescribed format wherever provided, rather than a generic format, to ensure acceptance.

Can a trust be asked to refund unutilised CSR funds?

Yes, depending on the agreement terms; unspent CSR funds with a third party are typically required to be returned or adjusted as per the funding company’s CSR policy and Companies Act requirements.

Does FCRA impose a cap on administrative expenses funded from foreign contribution?

Yes, FCRA rules cap the portion of foreign contribution that can be used for administrative expenses, and the CA certificate should confirm compliance with this cap.

What is an Independent Practitioner’s Report on Utilisation of CSR Funds?

It is the specific ICAI-recommended report format that a third party’s/NGO’s CA issues to confirm CSR funds received from a company were spent as per Section 135 and Schedule VII of the Companies Act.

Can the same CA who audits the trust issue the utilisation certificate?

Yes, this is common practice, provided independence and objectivity are maintained and there is no conflict of interest.

Is a notarised or apostilled utilisation certificate required for foreign donors?

Generally not required by default; foreign donors typically accept the CA’s signed and UDIN-verified certificate, though some institutional donors may have additional authentication requirements specified in the grant agreement.

What should a trust do if it disagrees with the CA’s findings on utilisation?

The trust should provide additional supporting evidence to the CA; if a genuine discrepancy exists, it must be resolved and disclosed transparently rather than concealed, since a CA cannot certify what is not adequately evidenced.

Are unspent grant funds taxable for the trust?

Unspent income may affect the trust’s eligibility for the income-tax exemption under Sections 11/12 if it is not applied or set aside as permitted by law; specific tax treatment should be assessed by the trust’s tax advisor.

Does NGO Darpan registration affect this certificate?

NGO Darpan ID is often required as supporting information in government grant utilisation reporting, though it is not itself a precondition for CA certification.

People Also Ask

Does every charitable trust need a Fund Utilisation Certificate every year?

Only trusts that have received specific grants, CSR funds, or foreign contributions requiring such reporting need one; a trust with no external grants in a year does not need this certificate for that year.

What is the difference between a grant and a donation for utilisation reporting?

A grant is usually conditional, tied to a specific project with reporting obligations, while a donation may be unconditional; conditional funds almost always require a utilisation certificate.

Can a Fund Utilisation Certificate be issued in a foreign currency?

The underlying certificate is usually denominated in Indian Rupees since the trust’s books are maintained in INR, even if the original contribution was received in foreign currency and converted.

Is a Fund Utilisation Certificate required for in-kind donations?

Yes, where the donor wants assurance on in-kind (non-cash) contributions, the CA can certify utilisation based on valuation and usage records of the goods/services donated.

What happens if a trust loses its 12A registration after receiving a grant?

The trust may lose income-tax exemption on that income, but the obligation to certify utilisation of the specific grant to the donor or under FCRA/CSR rules continues independently.

Can a chartered accountancy firm (not an individual CA) issue this certificate?

Yes, a CA firm registered with ICAI can issue the certificate in the firm’s name, signed by a partner who is a member in practice.

Are there different rules for state government grants versus central government grants?

Yes, each scheme/department typically prescribes its own utilisation certificate format and timeline, so the specific scheme guidelines should always be checked.

What is the role of the trustee in the utilisation certification process?

Trustees are responsible for maintaining proper records, providing accurate information to the CA, and signing any management representation letter requested.

Does the certificate need to disclose interest earned on unspent grant funds?

Yes, where grant funds are parked in interest-bearing accounts, the interest earned should typically be disclosed and its further utilisation/treatment clarified per the grant terms.

Can a single trust have multiple CAs issuing different utilisation certificates for different grants?

Yes, especially in larger trusts with multiple donors, though consistency and proper coordination between CAs is advisable to avoid discrepancies.

Is there a government portal to check FCRA utilisation filings?

Yes, FCRA annual returns including utilisation details are filed and tracked through the FCRA online portal managed by the Ministry of Home Affairs.

What if the trust’s expenditure exceeds the grant amount received?

The certificate should clearly state the excess was funded from the trust’s own resources or other sources, and not misrepresent the excess as funded entirely by the specific grant.

Can a Fund Utilisation Certificate be used as proof in income-tax scrutiny?

Yes, it can support the trust’s claim of application of income for charitable purposes during an income-tax assessment or scrutiny proceeding.

Is the certificate required if the donor is also a trustee of the same trust?

Yes, and in such cases, extra scrutiny under Section 13(3) related-party provisions is warranted to ensure no improper benefit has occurred.

How does a CA handle grants received partly in cash?

Cash receipts and payments should be supported by proper internal vouchers, cash book entries, and, where required by law, comply with cash transaction limits under the Income-tax Act.

What if the trust operates multiple bank accounts for different grants?

The CA should trace each grant to its specific designated account where required, and flag any commingling of restricted funds with general funds as a compliance concern.

Does ICAI prescribe a standard fee for issuing such certificates?

No, ICAI does not prescribe fixed fees for special-purpose certificates; fees are commercially negotiated between the CA and the client, subject to the Chartered Accountants Act’s prohibition on fee-sharing with non-CAs.

Can a trust get the certificate before fully completing the project?

Yes, interim utilisation certificates are common for ongoing multi-year projects, clearly marked as interim/partial, with a final certificate issued on project completion.

What is the relevance of Schedule VII to fund utilisation certification?

For CSR grants, Schedule VII of the Companies Act lists the permissible categories of CSR activity; the CA checks that utilisation falls within these categories.

Are utilisation certificates required for scholarship funds distributed by a trust?

Yes, if a donor has funded a scholarship programme through the trust, a utilisation certificate showing the funds reached the intended students is commonly required.

Can a Fund Utilisation Certificate help in trust audit under Section 12A renewal?

It can support the “genuineness of activities” assessment during 12A/12AB renewal by evidencing proper application of received funds.

What if vouchers for old expenditure are missing?

The CA cannot certify utilisation for unsupported expenditure; the trust must reconstruct or substitute supporting evidence, or the certificate must note the limitation.

Is digital signature acceptable on a Fund Utilisation Certificate?

Yes, many CAs now issue certificates with digital signatures along with UDIN, especially for electronic submission to portals like the FCRA system.

Can the certificate be revoked once issued?

A CA does not “revoke” a certificate, but can issue a corrigendum or a fresh certificate if a material error is discovered, along with proper documentation of the correction.

Is a Fund Utilisation Certificate required for Indian government scholarships routed through trusts?

Yes, where a trust administers a government scholarship scheme, periodic utilisation certificates are typically a condition of continued funding.

How does this certificate differ for a religious trust versus a charitable trust?

The certification process is largely similar; the key difference lies in the applicable registration (e.g., specific state religious endowment laws) governing the religious trust’s fund management.

What if the donor requires an audit opinion instead of a certificate?

Some larger donors request a full assurance engagement (with an audit-level opinion) rather than a simple certificate; the CA must scope the engagement accordingly and may charge differently.

Can NRIs serving as trustees sign the management representation letter?

Yes, any authorised trustee, regardless of residency status, can sign the representation letter, subject to the trust’s internal governance rules.

Is there a specific ICAI format number for the CSR Independent Practitioner’s Report?

ICAI’s CSR Committee has published an illustrative draft format in its Handbook on Audit of CSR Activities, which CAs commonly adapt for specific engagements.

What should a new trust do if it receives its first CSR grant?

The trust should first ensure CSR-1 registration is in place, then engage a CA early to set up proper fund-tracking records before expenditure begins, to make subsequent certification straightforward.

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Conclusion

A Fund/Grant Utilisation Certificate is one of the most practical accountability tools available to donors, regulators, and the charitable sector itself. For trustees, the discipline of maintaining grant-wise records and engaging a CA early — before, not after, the money is spent — makes certification straightforward and protects the trust’s registrations and reputation. For donors and CSR companies, insisting on a properly verified, UDIN-backed certificate is the simplest way to get independent assurance that their contribution achieved its intended purpose.

Given that reporting forms and thresholds (income-tax audit forms, FCRA disclosures, CSR rules) change frequently, trusts should treat this certificate as part of an ongoing compliance relationship with their CA, not a one-off paperwork exercise.

Disclaimer

This article is intended for general informational purposes only and does not constitute legal, tax, or professional advice. The issuance of any Fund/Grant Utilisation Certificate depends entirely on verification of the trust’s actual records and the professional judgement of the Chartered Accountant conducting that verification. Laws, forms, and thresholds referred to in this article (including the Income-tax Act, 1961/2025, FCRA, and Companies Act/CSR Rules) are subject to amendment; readers should verify the current position with a qualified Chartered Accountant before relying on any statement herein. This content is published in compliance with the ICAI’s Code of Ethics on advertising and does not solicit specific assignments.

Related Resources

Related certificates and guides on this site (internal links):

• Net Worth Certificate by Chartered Accountant
• Turnover Certificate for Businesses
• 12A and 80G Registration for Charitable Trusts
• FCRA Registration and Compliance Guide
• CSR-1 Registration for NGOs and Trusts
• Trust Audit Report: Form 10B and 10BB Explained

Authoritative external references:

• Income Tax Department, Government of India
• FCRA Online Portal, Ministry of Home Affairs
• Ministry of Corporate Affairs (CSR Rules and CSR-1)
• Institute of Chartered Accountants of India (ICAI)