Whitehall is planning a review into how business grants are awarded to combat fraudulent claims.
The review is set to look at the way grants funding is awarded and the rising instances of “grant fraud”, which some estimate to be worth in excess of £2bn.
The Department for Business, Energy and Industrial Strategy (BEIS) has begun to court accountancy firms, such as KPMG, to carry out the probe, according to The Sunday Times.
There are currently hundreds of grants at the disposal of small and growing businesses in the UK.
However, there have been accusations that grants are being double awarded to some applicants, with very little oversight of how government money is being spent.
Andrea Reynolds, founder of financing platform Swoop Funding, presented a report on the effect of grant fraud to former Prime Minister David Cameron in 2014.
The ex-KPMG accountant found, from figures collated from the National Audit Office (NAO), the government was losing £2bn a year in grant fraud and a further £4bn on administration costs.
Speaking to The Sunday Times last month, she said: “There were these enormous paper trails, but no evidence of what was working.”