Utilization Certificate: Format, Who Signs and a CA Checklist
A utilization certificate (UC) is a signed statement that money received for a specific purpose, such as a government grant, was actually spent on that purpose. For central government grants-in-aid it is issued in Form GFR 12-A under Rule 238(1) of the General Financial Rules 2017, and the form itself is signed by the grantee's Chief Finance Officer and Head of the Organisation. A CA usually enters the picture when the grantor, lender or the sanction letter asks for an independent certificate.
Facts checked: 26 September 2026 against the GFR 12-A form published by the Department of Science and Technology and the ICAI CSR handbooks. Always confirm the current format with the grantor, because ministries add annexures.
What is a utilization certificate?
A UC ties three things together: the amount sanctioned or received, the amount spent, and the purpose the money was given for. It also shows the closing balance and interest earned. It is a statement about end-use, not about profit, size or solvency.
Grantors typically ask for it before releasing the next instalment or before closing a project. Lenders ask for a similar end-use certificate for term loans. CORAA's fund utilization certificate template covers the CA-issued version for loans, grants and subsidies.
What must a utilization certificate contain?
The GFR 12-A form (see Rule 238(1)) is the clearest public reference. Its structure is below. Other grantors may use their own format, so treat this as the baseline.
| Element | What GFR 12-A asks for |
|---|---|
| Period and grant type | Year covered; recurring or non-recurring; grant-in-aid, salaries or creation of capital assets |
| Scheme name | Name of the scheme under which money was sanctioned |
| Opening position | Cash in hand or bank, unadjusted advances, total |
| Receipts and spending table | Unspent balance of earlier grants, interest earned, interest deposited back to the Government, grant received this year (sanction number, date, amount), total funds available, expenditure incurred, closing balance |
| Component-wise use | Split between general grant-in-aid, salary and capital assets |
| Closing position | Cash in hand or bank, unadjusted advances, total |
| Certification checks | Accounts maintained and audited and figures tally with the financial statements; internal controls exist; no transactions in violation of rules or scheme guidelines; responsibilities assigned; benefits reached the intended beneficiaries; spending in the authorised proportions; outcomes annexed; PFMS upload reference |
| Signatures | Chief Finance Officer (Head of Finance) and Head of the Organisation, with date and place |
Who can sign a utilization certificate?
It depends on who asked for it.
- Government grants-in-aid (GFR 12-A): the printed form carries signature blocks for the grantee's Chief Finance Officer and Head of the Organisation. It does not carry a CA block.
- Where the sanction letter or grantor asks for a CA: some grantors require the UC and the receipt and payment statement on a CA's letterhead, countersigned by the organisation's authorised signatory. That is the grantor's condition, not a rule of the GFR form. Read the sanction letter.
- CSR: under Rule 4(5) of the Companies (CSR Policy) Rules 2014, the company's Board must satisfy itself that funds were used as approved, and the CFO or the person responsible for financial management certifies this. A CA is not named in that rule for the certificate. A practising CA, CS or cost accountant does verify the implementing agency's registration Form CSR-1.
- Loans and subsidies: the lender's or scheme's terms decide. Many ask for a CA certificate.
If a CA signs, the certificate falls under ICAI's rules for certificates and should carry a UDIN where ICAI's UDIN requirement applies. Confirm the current ICAI mandate for the type of certificate.
When is a utilization certificate needed?
- Government grants: Rule 238(1) of GFR 2017 requires a grantee getting non-recurring grants to certify actual use in Form GFR 12-A. The time limit is set in the rule and the sanction; check both.
- Next instalment: many sanctions release further money only against the previous UC.
- CSR: implementing agencies report use to the company, and the company reports project-wise in Form CSR-2.
- NGOs and trusts: donors and grant-makers usually specify their own UC and reporting format. For the wider compliance picture see our trust and NGO audit guide.
- FCRA: foreign contribution use is reported through the FCRA annual return Form FC-4, not through a UC. A donor may still ask for a UC.
What should you check before signing a UC?
- Sanction letter. Read the sanctioned purpose, heads, amount, period and conditions.
- Bank trail. Match receipts to the sanction number and date; confirm the funds went to the designated account.
- Spending against heads. Spending on each head should stay within the sanctioned proportion.
- Books. The UC figures must tally with audited or finalised accounts.
- Vouchers. Sample invoices, payment proof and approvals; confirm the payee and date fall inside the period.
- Interest. Interest earned on grant money is reported and, where the terms say so, returned.
- Capital assets. Check the asset register and ownership conditions.
- Unspent balance. State it, and note whether it is refunded or carried forward.
- Related-party spending. Look at payments to the promoters, trustees or their firms.
- Scope. State what you did and what you relied on management for.
What does a filled example look like?
The numbers below are illustrative.
| Item | ₹ |
|---|---|
| Opening balance (unspent grant) | 2,00,000 |
| Grant received during the year (sanction no. 14/2025 dated 10 May 2025) | 30,00,000 |
| Interest earned | 40,000 |
| Total funds available | 32,40,000 |
| Expenditure incurred | 29,10,000 |
| Closing balance | 3,30,000 |
Of the spending, ₹18,00,000 is programme costs, ₹6,10,000 salaries and ₹5,00,000 capital assets. The closing balance is not treated as spent. The certificate states it is carried forward, or refunded with interest if the sanction requires.
What are the common mistakes in a UC?
- Reporting money as spent when only an advance was paid and is unadjusted.
- Leaving interest earned out of the statement.
- Treating the closing balance as utilised.
- Figures that do not tally with the audited accounts.
- Spending outside the sanctioned heads or after the project period.
- Using an old format when the grantor has issued a new one.
- Signing with no scope wording and no UDIN.
How is a UC different from a turnover or net-worth certificate?
| Certificate | What it states | Basis |
|---|---|---|
| Utilization certificate | Money received was spent on the sanctioned purpose | Sanction terms, bank, vouchers |
| Turnover certificate | Revenue for a period | Books and returns |
| Net-worth certificate | Assets minus liabilities at a date | Balance sheet or valuation |
A UC is tested against a purpose and a sanction. The other two are measured figures. See our note on net worth under Section 2(57).
Frequently asked questions
Is a chartered accountant required to sign a utilization certificate?
Not under the GFR 12-A form, which is signed by the grantee's CFO and Head of Organisation. A CA is needed only where the grantor, lender or sanction letter asks for one.
Which rule requires the government grants UC?
Rule 238(1) of the General Financial Rules 2017 refers to Form GFR 12-A.
Does a CSR project need a utilization certificate?
CSR rules require the Board to be satisfied, with the CFO certifying use of funds, and project-wise reporting in Form CSR-2. Many companies also ask implementing agencies for a UC under the project agreement, but that is a contract term, not a CSR-rule requirement.
Can a UC show an unspent balance?
Yes. The format has a closing balance line. The sanction terms decide whether it is refunded or carried forward.
Do I need a UDIN for a UC signed by a CA?
In most cases, yes. ICAI's UDIN system covers certificates signed by practising CAs, so check the current ICAI requirement for the specific certificate before signing.
Is a UC the same as an FCRA return?
No. FCRA use is reported in Form FC-4. A UC is a separate statement.
Last reviewed: 26 September 2026. This post is educational and not a substitute for the sanction letter or advice from your professional body.
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