Hong Kong Government Grants Audit | BUD Fund, TVP & Subsidy Audit | Deep Blue CPA

At Deep Blue CPA Limited, we specialise in audit and compliance verification services for Hong Kong government grants, subsidies, and funding schemes. As part of our comprehensive audit services in Hong Kong, our team has extensive experience working with the full range of government funding programmes, helping businesses and organisations meet their compliance obligations efficiently and accurately.

Whether you have received funding under the BUD Fund, Technology Voucher Programme (TVP), Enterprise Support Scheme (ESS), D-Biz Programme, or any other government grant programme, our CPAs ensure your expenditure claims and financial reports meet the stringent requirements of the funding body.

Why Government Grant Audits Are Required

Hong Kong government grants and subsidies are public funds. Funding bodies such as the Innovation and Technology Commission (ITC), Trade and Industry Department (TID), and various government bureaux require grant recipients to demonstrate proper use of funds through independent audit verification.

A government grant audit serves several critical purposes:

• Compliance verification — Confirms that grant funds were used solely for approved project purposes in accordance with the funding agreement.
• Expenditure validation — Verifies that all claimed expenses are eligible, properly documented, and supported by appropriate evidence.
• Financial accountability — Provides assurance to the funding body that public funds have been managed responsibly.
• Claim processing — Many grants require audited expenditure reports before releasing subsequent tranches of funding.

Government Funding Schemes We Audit

BUD Fund (Dedicated Fund on Branding, Upgrading and Domestic Sales)

The BUD Fund supports non-listed Hong Kong enterprises in developing brands, upgrading operations, and expanding into overseas and Mainland China markets. The cumulative funding ceiling is HK$7 million per enterprise (up to 70 approved projects). We provide the required audit certification for BUD Fund project expenditure claims — the audit fee (capped at HK$10,000 per audit under the current 1:3 matching ratio) is itself an eligible project expense.

Technology Voucher Programme (TVP)

The TVP provided funding for Hong Kong SMEs to adopt technological solutions to improve productivity and business processes, with a cumulative funding ceiling of HK$600,000 per enterprise (up to 6 projects) on a 3:1 matching basis. Note: The Innovation and Technology Commission ceased accepting new TVP applications after 31 December 2024. However, enterprises with approved TVP projects that are still in progress or have been completed still require audited expenditure statements. Our audit services verify that TVP-funded technology projects have been implemented as approved and that all claimed expenditures are eligible and properly documented.

Distance Business (D-Biz) Programme

The D-Biz Programme, launched under the Anti-epidemic Fund, provided fast-track funding for enterprises to adopt IT solutions for remote business operations. Each eligible enterprise could receive up to HK$300,000 (HK$100,000 per IT solution, maximum 3 solutions). Although the application period closed on 31 October 2020, many enterprises still require audited statements of income and expenditure for completed D-Biz projects (required where approved funding exceeded HK$30,000). These assurance engagements are performed under HKSAE 3000 (Revised).

Enterprise Support Scheme (ESS)

The ESS supports research and development projects with commercial potential. We provide project-based audit certifications verifying R&D expenditure, project progress, and compliance with ITC requirements.

Innovation and Technology Fund (ITF)

The ITF supports innovation and technology projects across various sectors. Our audit services cover the full range of ITF programmes, ensuring proper accounting for research expenditure, equipment costs, and other eligible expenses.

Other Government Grants and Subsidies

We also provide audit services for other government funding programmes including:

• Environment and Conservation Fund (ECF)
• Quality Education Fund (QEF)
• Professional Services Advancement Support Scheme (PASS)
• Various sector-specific subsidy schemes and support programmes

Our Grant Audit Process

1. Understanding the funding agreement — We review the specific terms, conditions, and eligible expenditure categories of your grant agreement.
2. Document review — We examine all supporting documents including invoices, contracts, payment records, and project deliverables.
3. Eligibility testing — We verify that all claimed expenditures meet the funding body's eligibility criteria, including timing, categorisation, and approval requirements.
4. Expenditure verification — We confirm that claimed amounts match supporting documentation and that funds were used exclusively for the approved project.
5. Compliance reporting — We issue an audit report or certification in the format required by the specific funding scheme, addressing all required assertions and representations.

All grant audit engagements are performed in accordance with HKSAE 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, issued by the Hong Kong Institute of Certified Public Accountants. This is the professional standard that governs non-financial-statement assurance work in Hong Kong, and it sets the benchmark for the quality and rigour of our grant audit procedures.

Key Requirements for Grant Recipients

To ensure a smooth audit process, grant recipients should maintain:

• A separate bank account or dedicated ledger for grant funds
• Detailed records of all project-related expenditure with supporting invoices and receipts
• Timesheets and payroll records for staff costs allocated to the project
• Contracts and agreements with third-party vendors or service providers
• Project progress reports and deliverables as specified in the funding agreement
• Records of any variations or amendments approved by the funding body

Why Choose Deep Blue CPA for Your Grant Audit?

• Specialist expertise — We have in-depth knowledge of Hong Kong government funding schemes, their rules, and audit requirements.
• Proven track record — We have successfully completed hundreds of grant audits across multiple funding schemes.
• Efficient process — Our streamlined approach minimises disruption to your operations while ensuring thorough compliance verification.
• Timely delivery — We understand that grant claim deadlines are critical and deliver reports promptly.
• AFRC registered — Our audit reports are issued by practising certified public accountants registered with the Accounting and Financial Reporting Council (AFRC), Registration No. M0307. Verify on AFRC register →

Related Services

In addition to government grant audits, our firm offers a full suite of audit and assurance services that may be relevant to grant-funded organisations:

• External Audit (Statutory Audit) — Mandatory audit of financial statements under the Hong Kong Companies Ordinance (Cap. 622). Many grant recipients also require a statutory audit alongside their grant audit.
• School Audit — Specialised audit services for schools, kindergartens, and educational institutions, covering EDB requirements and government fund utilisation.
• Internal Control Review — For listed companies and SMEs seeking to strengthen internal control systems in line with HKEX CG Code requirements.
• Bookkeeping — Proper financial record-keeping is the foundation of a smooth grant audit. We help maintain clean, audit-ready books throughout your project.

Frequently Asked Questions

When is a government grant audit required?

Most government funding schemes require an independent audit certification for each claim tranche and at the conclusion of the project. The specific requirements are set out in your funding agreement. Some grants also require an annual audit if the project spans multiple years.

What documents do I need to prepare for a grant audit?

You should prepare all documents supporting the claimed expenditure, including invoices, payment receipts, contracts, timesheets, delivery notes, and project progress reports. We provide a detailed checklist at the start of each engagement.

Can I claim the audit fee as part of the grant?

Many government funding schemes allow the audit fee to be included as an eligible project expense. Check your funding agreement or ask us to advise on eligibility.

How long does a grant audit take?

Most grant audits are completed within 2 to 4 weeks from receipt of all required documents. We can expedite the process for urgent claims.

What audit standard applies to government grant audits?

Grant audit engagements in Hong Kong are performed under HKSAE 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information. This is the professional standard issued by the HKICPA for non-financial-statement assurance work, governing how we plan, perform, and report on grant expenditure verification.