Grants watch: Major audits, investigations and reviews

Posted on 21 Mar 2022

By Matthew Schulz, journalist, Our Community

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Recent developments related to grants investigations and findings, regularly updated.


UPDATE: Monday, March 21

No let-up on grants scrutiny as poll looms

The spotlight remains firmly fixed on grants management in the lead-up to the 2022 federal poll as politicians aim to shore up votes with election promises.

This month, Coalition finance spokesman Simon Birmingham took aim at the Labor Party for alleged pork barrelling, after Nine Newspapers reported that up to $750 million in grants promised by Labor would target marginal seats. Labor transport spokeswoman Catherine King defended the allocations by saying the Department of Infrastructure would be tasked with reviewing the spending.

Community safety grants criticised

The Coalition’s claims come on the heels of criticism of yet another federal grants program. A February audit by the Australian National Audit Office (ANAO) found the $184 million Safer Communities Fund was only “partly effective and partly consistent” with Commonwealth grant rules and guidelines.

The audit found applications “were not assessed fully in accordance with the guidelines”. It also found that “funding decisions were not appropriately informed by departmental briefings and, for the majority of decisions, the basis for the decisions was not clearly recorded”.

Projects in Coalition-held marginal electorates won a higher proportion of grants, the audit found, while ALP-held seats won fewer grants.

Similar findings have been made in relation to a series of other federal grants programs, and the fallout continues.

The ABC reported that a regional soccer club which was furious to have missed out on a $460,000 grant through a Sports Australia grants program, despite being ranked among the top 20 applicants, has now won funding from the Victorian government to fix its muddy pitch.

Grants Hubs report is overdue

Grants watchers will be keenly interested in the results of the ANAO audit into the operation of the federal government’s Grants Hubs program, with the report repeatedly delayed.

Originally due to be handed down in August 2021, and then delayed until November, the audit is now expected this March, with the investigation assessing the “design and implementation” of the Streamlining Government Grants Administration (SGGA) Program, which is aimed at improving the effectiveness and efficiency of grants administration.

The hubs are operated by the Department of Social Services and the Department of Industry, Science, Energy and Resources.

Defence grants ‘inadequate’

An ABC investigation using freedom of information laws has highlighted failings in grants administration in the Defence Department.

The June 2020 Grants Management in Defence report by the department’s audit branch covered grants worth nearly $200 million between 2017 and 2019.

While the previously confidential report just released to the ABC found no serious wrongdoing, the internal investigation did find that grant managers did not adequately understand expected standards, and there was a “perceived absence of any accountability for their actions”.

The audit revealed that a new grant management framework had been rolled out in the department to ensure grant rules were followed.

Australian research grants face inquiry

A federal parliamentary inquiry into the handling of Australian Research Council (ARC) grants is due to report later in March.

This follows a move by Greens senator Mehreen Faruqi to change the Australian Research Council Act 2001 to remove ministerial discretion in the approval of ARC grants.

There have been 85 submissions to the Senate committee, which held a public hearing on March 9. Several of the country’s top universities told the committee they believed the veto power should be scrapped or curtailed.

On Christmas Eve 2021, then acting Education Minister Stuart Robert sparked controversy when he vetoed six projects that had been earmarked for funding.

Professor Gabrielle Appleby of the UNSW Law School, writing for the academic news site The Conversation, has examined the current state of affairs and proposed new statutory reporting requirements and oversight of funding arrangements.

UPDATE: Monday, February 14

Safer Communities Fund gets mixed report card

The Australian National Audit Office (ANAO) has completed an audit of the Safer Communities Fund to examine “whether the award of funding under the Safer Communities Fund was effective and consistent with the Commonwealth Grant Rules and Guidelines”.

The ANAO launched the investigation following a request by Shadow Home Affairs Minister Kristina Keneally to the Auditor-General to examine claims that Home Affairs Minister Peter Dutton personally handpicked grants under the Safer Communities program.

The ANAO probe examined whether the program had appropriate guides, that applications were assessed in accordance with those guidelines and that funding decisions were appropriately informed and documented.

According to the audit report, key findings included:

  • The award of funding was partly effective and partly consistent the Commonwealth Grant Rules and Guidelines.
  • Largely appropriate grant opportunity guidelines were in place.
  • Applications were not assessed fully in accordance with the guidelines.
  • Funding decisions were not appropriately informed by departmental briefings and, for the majority of decisions, the basis for the decisions was not clearly recorded.

The Auditor-General made five recommendations, with four for the Department of Home Affairs and one for to Department of Industry, Science, Energy and Resources.

The recommendations addressed program design, the assessment of applications and advice to decision makers. All five recommendations were agreed to.

Read the ANAO’s full report: Award of Funding under the Safer Communities Fund | Australian National Audit Office

UPDATE: 8 February, 2022

NSW communities grants scheme 'lacked integrity': Auditor General

The NSW Auditor General has issued a scathing report into the handling of a grants scheme in which 96% of funds were given to coalition-held state seats.

The study revealed:

  • $252 million was allocated to 24 councils
  • 96% was allocated to council projects in coalition-held state seats
  • 36% of the funding ($90 million) was allocated to a single council
  • $8 million was granted for projects identified before the program guidelines were finalised.

The report issued this month found: “The assessment and approval process for Round 2 of the Stronger Communities Fund lacked integrity. The government decided to prioritise funds for councils that had worked constructively with the government through the 2016 merger process.

“However, this information was not included in the program guidelines. The program guidelines were not published and did not contain details of selection and assessment processes.

"Councils and projects were instead identified by the former Premier, Deputy Premier and Minister for Local Government and communicated to OLG [the former Office of Local Government] with little or no information about the basis for the council or project selection. There was no merit assessment of identified projects. This process resulted in 96 per cent of funds allocated to coalition state seats.”

The investigation also looked into the $100 million Regional Cultural Fund administered by Create NSW, which found the arts minister hadn't followed the recommendations of an independent panel in a fifth of the applications. The reasons why were not documented by Create NSW.

The Auditor-General made the following recommendations:

"The Department of Premier and Cabinet should develop a model for grant administration that must be used for all grant programs administered in NSW that:

  • is based on ethical principles such as impartiality, equity and transparency
  • ensures assessments and decisions can be made against clear eligibility criteria
  • ensures accountability for decisions and actions of all those who are involved in the program
  • includes minimum mandatory administration and documentation standards
  • requires any ministerial override of recommendations to be documented."

It also suggested that “the Department of Planning and Environment should ensure that guidelines prepared for all grant programs are published and include a governance framework that includes accountabilities and key assessment steps”.

A response from the NSW Department of Premier and Cabinet noted that Premier Dominic Perrottet had commissioned a separate review of all state grants programs. That report is due in April and is expected to result in updates to the state's Good Practice Guide to Grants Administration.

Access the full NSW Auditor-General's report

UPDATE: 15 December 2021

Funds flow to Coalition seats, study reveals

Analysis by The Age and The Sydney Morning Herald of more than 19,000 federal grants worth $2.8 billion has raised questions about the equity of grants distributions.

The data investigation tracked how grants were allocated by electorate using data from a larger report by the Australian National Audit Office (ANAO). That study tracked more than $60 billion worth of grants since 2017 published via GrantConnect.

The Nine Publishing report covered about 20% of the grants, and tracked money given to each electorate to be allocated by MPs, and where government ministers were able to decide on the allocations.

The study claimed that Coalition-held seats received more than $1.9 billion over three years while Labor electorates got just under $530 million.

Read more of the Nine Publishing coverage and commentary here.

Meanwhile, the Australia Institute produced a similar analysis of grants spending by electorate, drawing on data from 2013 and examining the figures program by program.

Somewhat different programs were covered by the research, but that study also found that "funding has clearly favoured marginal seats at the expense of safe Labor seats and, in some cases, safe Coalition seats".

Its analysis found that marginal Coalition seats received national grants worth $184 per person, while safe Labor seats received just $39 per person.

Read the Grants with Minsterial Discretion study here.

13 December 2021

Inquiry prompts community grants review

The Victorian Government is conducting an internal review of two grants programs that were subject to investigations by the Independent Broad-based Anti-corruption Commission (IBAC).

The Age and The Australian reported an independent audit had been commissioned into the Victorian Responsible Grambling Foundation grants program.

It is understood KPMG will conduct that investigation, while PwC Australia is set to separately examine grants to the Somali Australian Council of Victoria.

Government officials said the investigations were commissioned in November, soon after IBAC launched an investigation into allegations of "serious corrupt conduct involving MPs and others" in relation to claims of political interference in the use of public monies, including grants.

The investigation primarily focused on the alleged illegal payment of electoral officers for party-political work, but also examined claims that grant funds intended for community associations were improperly used.

UPDATE: 17 November 2021

NSW to review grants practices in the wake of corruption probe

NSW Premier Dominic Perrottet has announced a review into that state’s grants programs, following his predecessor Gladys Berejiklian’s appearance before a corruption inquiry.

Ms Berejiklian resigned ahead of her being questioned about a $5.5 million grant to a shooting club in Wagga Wagga, which allegedly benefited her then secret partner, MP Daryl Maguire.

NSW Premier Dominic Perrottet

Mr Perrottet said the review will examine grants procedures and systems across the state, with a report due in April 2022.

“I am committed to making sure grant programs are fair, robust, and follow best practices when those dollars are put to work in the community,” he said in a statement this month.

“From sports facilities to welfare services, COVID support packages, and small business assistance, grants are critical to so many people and play a vital role in enhancing quality of life and our economy.”

The review will be led by the Department of Premier and Cabinet, alongside the state’s productivity commissioner, and will examine whether grants programs:

  • achieve value for money
  • are robust in planning and design
  • following principles of transparency, accountability and probity.

According to the Premier, the review will consider other jurisdictions, past recommendations from NSW authorities, best-practice risk assessments and frameworks, and the existing regulatory environment.

The review will also update the state’s Good Practice Guide to Grants Administration.

In the meantime, a cross-party parliamentary committee chaired by Greens MLC David Shoebridge continues its own investigation into the “integrity, efficacy and value for money of NSW Government grant programs”.

Mr Shoebridge’s Public Accountability Committee lodged its first report in March 2021 and is expected to table its final report by February 2022.

Review of grants administration in NSW (terms of reference)

Public accountability committee inquiry into NSW grants


14 October 2021

NSW premier falls to grants probe

Grants continue to take the centre stage in national controversies, with former NSW premier Gladys Berejiklian resigning amid an investigation by the state's anti-corruption body into her involvement in a $5.5 million grant to a clay target shooting club in Wagga Wagga.

In a recent commentary published by the Centre for Public Integrity, board member Geoffrey Watson SC said the Independent Commission Against Corruption (ICAC) was justified in going public with an investigation into the "questionable allocation of public money through grants". He said ICAC's call would have been "free of any political considerations".

"Sports rorts, car park rorts – it is becoming a sadly familiar theme. What is under investigation is whether public money was taken from where it should have been allocated and reallocated as a favour to a politician. If that happened it is a disgrace. We have seen too much of this going on, and [it] needs to be exposed for what it is."

Days later, Victorian watchdog, the Independent Broad-based Anti-corruption Commission (IBAC), launched its own investigation into allegations of "serious corrupt conduct involving MPs and others" in relation to political interference in the use of public monies, including grants.

While this investigation focuses on the alleged illegal payment of electoral officers for party-political work, it will also examine claims that grant funds intended for community associations were improperly used.

The handling of grants looks certain to remain on the front pages for some time to come, with Grants Management Intelligence reporting last month that Australia’s top federal grants watchdog will keep a keen nose out for unethical behaviour in future investigations, in the wake of a spate of grants controversies.


29 September 2021

National auditor flags focus on ethics

Australia’s top federal grants watchdog will keep a keen nose out for unethical behaviour in future investigations, in the wake of a spate of grants controversies.

Grantmakers in all jurisdictions would be wise to heed the warning shot from the nation’s leading auditor.

Federal Auditor General Grant Hehir, of the Australian National Audit Office (ANAO), said that over the next four years his office would “design and implement an appropriate audit framework against which to test ethics”.

This follows a series of high-profile critiques of grants funding in the past two years, including ANAO investigations into:

  • the Safer Communities program, providing crime prevention funds
  • the Commuter Car Parks program within the Urban Congestion Fund
  • the Community Sport Infrastructure program
  • the Regional Jobs and Investment Packages
  • the Australian Research Council’s National Competitive Grants program
  • the $443 million grant to the Great Barrier Reef Foundation.

Writing in the ANAO’s latest annual report, the Auditor-General said, “The importance of ethics in the use of resources has been highlighted in several audits, particularly relating to procurement and grants administration.

“I believe that greater scrutiny in this area will help ensure that the public sector continues to look beyond technical compliance and focuses on operating in line with community expectations of integrity and honesty.”


August 19, 2021

Think tank seeks changes to system

The Australian grants system needs major reform, according to the Centre for Public Integrity.

Its call for systemic change is based on research showing that every grant program audited by the Australian National Audit Office (ANAO) since 2019 has been flawed, with problems ranging from minor errors to "serious maladministration", in programs that have distributed $5.5 billion in public funds.

The centre says grants oversight changes should start with these reforms:

  • Grant approval criteria, including merit selection criteria and program guidelines, should be set out in primary legislation
  • Departments should be required to lodge documents to Parliament relating to tenders, selection and delivery
  • A joint standing committee should be established to oversee grant administration and report to the Parliament.

Read the Centre for Public Integrity's briefing paper


July 15, 2021

Auditors lash administration of commuter parking grants

The Australian National Audit Office (ANAO) has made a scathing assessment of the Federal Department of Infrastructure's handling of grants designed to build more commuter car parks.

The findings drew widespread media coverage (ABC, SMH, Guardian) about how funds in the $660 million program were handled, with the report criticising the transparency of the program, political bias, poor assessment, a failure to show the projects would be value for money, and poor delivery.

The ANAO concluded that "the department’s approach to identifying and selecting commuter car park projects for funding commitment was not appropriate".

"It was not designed to be open or transparent. The department did not engage with state governments and councils, which increased the risk that selected projects would not deliver the desired outcomes at the expected cost to the Australian Government.

"Departmental advice did not contain an assessment against the investment principles or policy objectives and it was not demonstrated that projects were selected on merit.

"The distribution of projects selected reflected the geographic and political profile of those given the opportunity by the government to identify candidates for funding consideration."

The Auditor-General made six recommendations around program design, record keeping, assessment of proposals, and milestones, which the department has accepted.

The ANAO also delivered key messages for all government instrumentalities as a result of the audit, affecting both program design (especially consultation) and record keeping. This includes consulting with project partners, including other levels of government, before making decisions (and public announcements) on project selection or funding. And, the ANAO highlighted the importance of record keeping in creating better transparency, accountability and informed decision-making.

Read the full ANAO report

May 10, 2021

National auditor tests programs

The Australian National Audit Office (ANAO) will review the Safer Communities Fund to examine "whether the award of funding under the Safer Communities Fund was effective and consistent with the Commonwealth Grant Rules and Guidelines".

The ANAO confirmed mid-last month that it had launched the investigation following a request by Shadow Home Affairs Minister Kristina Keneally to the Auditor-General to examine claims that Home Affairs Minister Peter Dutton personally handpicked grants under the Safer Communities program. Ms Keneally welcomed the decision to proceed with a probe.

The ANAO probe will examine whether the program had appropriate guides, that applications were assessed in accordance with those guidelines and that funding decisions were appropriately informed and documented.

The office is expected to seek submissions to the audit until November and to report in February next year.

Huge reef grant gets mixed report in audit

The Great Barrier Reef Foundation has a long way to go to reach its target of raising $357 million - including $157 million in cash - to protect the threatened natural treasure, the ANAO has found in a report released this month.

The auditor was called in to examine a controversial non-competitive $443.3 million grant to the foundation in 2018 by the then Turnbull Government

So far, the foundation has raised $53.6 million towards the target, including $684,000 in cash.

The audit found the foundation's work had been "partially effective" and made seven recommendations addressing bank deeds, fundraising, subcontracting the delivery of reef protection projects and administration costs.

Government grant systems under the microscope

In other work by the ANAO:

  • The office will lodge a report in August about the performance of the Australian Grants Information System, GrantsHub, including the design and implementation of the Streamlining Government Grants Administration (SGGA) Program
  • The audit office expects to report in September about the operation of the GrantConnect system administered by the Department of Finance

The ANAO has also flagged potential investigations into:

  • The Community Health and Hospitals Program
  • The Drought Communities Program
  • The Indigenous Advancement Strategy
  • The 20 Million Tree Program
  • The Building Better Regions Fund

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