This article was published on 17 December 2014
Callaghan Innovation has suspended a research and development (R&D) Growth Grant awarded to Trends Publishing International Ltd (Trends) following an audit of its funding claims.
Trends received approval for a three-year Growth Grant on 31 March 2014 following a detailed eligibility assessment process. The company had received $332,966.60 before the grant was put on hold.
All Growth Grant recipients are regularly monitored by Callaghan Innovation. Concerns about the legitimacy of some of Trends’ claims against the approved R&D funding led to an internal investigation, followed by an independent audit. The matter has also been referred to the Serious Fraud Office.
Growth Grants are a non-discretionary R&D incentive programme which provides 20 per cent public co-funding for qualifying firms’ eligible R&D expenditure. To qualify businesses must:
- Have spent at least $300,000 on eligible R&D in each of the last two years
- Have spent at least 1.5 per cent of their revenue on R&D occurring in NZ over the last two years
- Be domiciled in New Zealand and maintain or increase their spending on R&D over the course of the funding.
Have met financial and due diligence requirements
- Have provided a sufficiently detailed R&D plan, including an estimate of R&D expenditures over the next three years.
There are clawback provisions should a change occur that reduces the benefit to New Zealand.
Breaches to the terms of Growth Grant funding agreements can incur remedial action including contract termination and the requirement to repay funds paid plus interest.
Suspension of a grant allows a company time to respond to notification of breaches before a decision is made on terminating the grant.