Current issues in accounting and internal audit of grant activities in higher education institutions

Abstract

The relevance of the study is driven by the need to enhance transparency, efficiency, and accountability in the use of grant funds by higher education institutions amid the transition toward digital financial management. Grant activities have become a key source of financing for educational and research initiatives; however, the current system of accounting and internal audit does not fully comply with international standards and donor program requirements, which necessitates its improvement. The purpose of the article is to clarify the theoretical and practical foundations of organizing accounting and internal auditing of grant activities in higher education institutions and to substantiate the directions for their improvement in line with the principles of digitalization, accountability, and international financial management standards. Methods. The research is based on a systemic approach using comparative, regulatory-analytical, and structural-functional analysis methods. The provisions of international standards INTOSAI, IFAC, the EU Annotated Grant Agreement and Indicative Audit Programme were summarized to develop a unified grant accounting methodology and a risk-oriented internal audit program harmonized with donor requirements and integrated into digital reporting processes (e-Reporting/Funding & Tenders Portal). An analytical review of the current practice of grant accounting in Ukrainian higher education institutions was also conducted. Results. The key methodological features of reflecting grant operations in university accounting were identified, and the functional role of internal audit in ensuring transparency and reliability of grant project financial reporting was determined. The main barriers hindering effective grant implementation were analyzed, including organizational fragmentation between financial, research, and audit units, shortage of qualified personnel, and insufficient digital integration of accounting processes. The directions for improving grant accounting and audit systems were substantiated-specifically, the introduction of integrated information management systems, harmonization of national regulations with INTOSAI and IFAC standards, and the development of professional competencies of accountants and auditors in digital financial management. Conclusion.The formation of a unified system of financial accountability and digital audit of grant activities in universities is a prerequisite for strengthening donor trust, increasing the efficiency of fund utilization, and ensuring the sustainable development of higher education in the context of digital transformation.