Breach of Contract – Government Agency


The issue

A Government agency had begun providing a £multi-million grant to a company for it to distribute to research and development organisations.

The Breach of Contract

Forensic Accounting Services were appointed to verify the uses to which the company was putting the grant funds.

What we did

We firstly reviewed the contractual terms under which grant was provided to the company and the requirements placed on it for distributing those funds. Forensic Accounting Services then analysed the company’s accounting records for the period during which it had been receiving the funding and made detailed analyses of the expenditure in them. We obtained supporting documentation for several relevant categories of expenditure and interviewed the directors to obtain explanations about the uses to which the grant funds had been put. That enabled us to produce a report which explained that the directors had misunderstood the terms of reference under which the grant funds had been awarded and that some funds had not been distributed in accordance with the contractual requirements.

The outcome

The terms of reference were amended to avoid any ambiguities and misunderstandings and the agency was able to regularise the situation so that funds were only distributed as intended.

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