Award of Funding under the Community Sport Infrastructure Program
Entities audited: Australian Sports Commission
Introduction
5.1
The Community Sport Infrastructure Grant Program (CSIG/the program) was a competitive grants process, established in 2018 to ensure more Australians have access to quality sporting facilities, with an aim of fostering greater community participation in sport and physical activity. The CSIG was originally funded for $29.7 million, but secured additional funding from the December 2018 Mid-Year Economic and Fiscal Outlook (MYEFO) and the 2019-20 Budget, which raised the total funding to $102.5 million.
5.2
The program was administered by the Australian Sports Commission (Sport Australia). The entity is overseen by a Board of Commissioners appointed by the Minister for Sport (the Minister). Sport Australia’s website states that it is ‘the Australian Government agency responsible for supporting and investing in sport and physical activity at all levels’. Sport Australia is a corporate Commonwealth entity, and therefore is not subject to the Commonwealth Grant Rules and Guidelines (CGRGs) but is subject to other legislative frameworks such as the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and its own enabling legislation, the Australian Sports Commission Act 1989 (ASC Act).
5.3
Sport Australia accepted applications for the CSIG from 2 August 2018 to 14 September 2018. During this time, the agency received 2056 project proposals seeking more than $396.6 million in funding.
5.4
The published program guidelines outlined that all eligible applications would be assessed and scored against three weighted merit criteria, with funding to be awarded on a competitive basis by the Minister. The three weighted merit criteria were:
The extent to which the project would address and increase community participation in sports activities;
The extent to which the project would address community need, including considerations such as co-funding arrangements and existing facilities in the area; and
The extent to which the project had demonstrated sound project design and planning, and whether the applicant was capable of completing the project.
5.5
The guidelines also enabled Sport Australia to provide three streams of funding, which was dependent on the amount of funding sought.
5.6
The agency provided $100 million in total for 684 projects. The grants were provided in three rounds, completed in December 2018, February 2019 and April 2019.
Overview of performance audit findings
5.7
The audit concluded that, while the CSIG guidelines were ‘well structured and included clear assessment criteria with transparent weightings’, funding decisions were not ‘informed by an appropriate assessment process and sound advice’.
5.8
The ANAO found a number of limitations in program design, including: a failure to conduct appropriate analysis of the likely demand for funding and relevant mitigation strategies; a lack of planning in relation to risk management in the assessment process; and inconsistent conflict of interest management.
5.9
Applications were assessed in relation to eligibility requirements, and scored against the selection criteria contained in the guidelines. The ANAO identified that Sport Australia had assessed the applications and recommended funding within the context of the three funding streams, assigning different minimum assessment scores for funding depending on the stream. This was found to be inconsistent with the program guidelines and the intention of the streams. The ANAO explained that the Minister’s Office however had conducted its own assessment process independent of Sport Australia. The ANAO stated:
In parallel, the Minister’s Office had commenced its own assessment process to identify which applications should be awarded funding. The Minister’s Office drew upon considerations other than those identified in the program guidelines, such as the location of projects, and also applied considerations that were inconsistent with the published guidelines. It was this assessment process that predominantly informed the Minister’s funding decisions, rather than Sport Australia’s process. This resulted in the assessment advice to the Minister being inconsistent with the approved program guidelines.
5.10
Further, the ANAO asserted that funding decisions were not supported by clear advice due to an inconsistent approach taken by Sport Australia in advising the Minister.
5.11
The audit found that in Round 1, Sport Australia did not provide the recommendations of the assessment panel, and instead recommended applications identified by the Minister for Sport’s Office which were stated to be ‘those that would be approved by the Minister’. The ANAO found that 91, or 41 per cent of the applications recommended for funding, were not among the 486 projects recommended by the Sport Australia board.
5.12
In Round 2, Sport Australia did not provide its own recommendations, and instead was separately told by the Minister for Sport’s Office which projects would be approved. This resulted in 162 applications, or 70 per cent of approved projects, being funded which Sport Australia had intended not to recommend.
5.13
In Round 3, Sport Australia provided a written briefing identifying projects recommended for approval, but included a further list of projects that the Minister intended on funding, comprising 73 per cent of which were not recommended for funding by the agency.
5.14
The audit made three recommendations directed to Sport Australia:
Recommendation 1: Sport Australia ‘identify strategies to manage the expected level of demand for the amount of funding that is being made available’ when creating grants programs utilising a competitive application process;
Recommendation 2: Sport Australia clarify its conflict of interest policy to require that employees involved in the design and administration of grants programs to declare any conflicts; and
Recommendation 3: Sport Australia improve its record-keeping practices ‘by concisely recording the reasons for the assessment scores that are awarded (in addition to recording the scores)’.
5.15
The ANAO also recommended that the Australian Government:
…amend the CGRGs to require that the advising, decision-making and reporting requirements applying to situations where a minister approves grant funding be extended to apply to corporate Commonwealth entities in situations where a minister, rather than a corporate entity, is the decision-maker. This would mean that there would be a single framework in place for all circumstances where a minister decides upon the award of grant funding.
5.16
All three of the recommendations directed to Sport Australia were agreed to. The Department of Finance (Finance) responded that it had noted the above recommendation, as it was a matter for consideration by Government.
5.17
In their submission to the Committee, Finance advised that the Prime Minister had announced that the Government was acting on the ANAO’s recommendation, with a view to implementation by the end of 2020. Finance have drafted an amendment to the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), which replicates the relevant mandatory requirements of the CGRGs and will apply when a Minister is the decision-maker for a grant administered by a corporate Commonwealth entity.
Conduct of the audit
5.18
The ANAO’s decision to undertake the audit followed a request from a Member of Parliament, who requested for the ANAO to examine the circumstances surrounding a project that received funding in the CSIG Program. This particular project had been announced by an election candidate for the Federal seat of Mayo during the second round of the CSIG Program.
5.19
The ANAO stated that the ‘key rationale’ underpinning the decision to audit the CSIG Program was that ‘Sport Australia (as a corporate Commonwealth entity) is not subject to the [CGRGs] when administering its grants programs’.
5.20
The objective of the audit was to ‘assess whether the award of funding under the CSIG program was informed by an appropriate assessment process and sound advice’. The audit scope included CSIG program design, the assessment of program applications, and the processes involved in awarding grants. The scope did not extend to aspects relating to later stages of the grants process, including the administration of funding agreements with successful applicants.
5.21
The ANAO adopted the following criteria in undertaking the audit:
Was the program well-designed?
Were applications assessed in accordance with the program guidelines?
Were the funding decisions informed by clear advice and consistent with the program guidelines?
5.22
The audit methodology included: examination of entity records, including email records, electronic and hard documentation and grants management system data; identifying and extracting data for visualising application demographics, application assessment results, funding decisions taken; and interviews of relevant entity staff and evidence.
5.23
The audit was conducted in accordance with ANAO auditing standards, and utilised five ANAO officers at a cost of $615 000.
Application assessment process
Consistency with Guidelines
5.24
Sport Australia developed the CSIG program guidelines in accordance with the Grant Management Framework. The Office for Sport within the Department of Health and the Minister for Sport had contributed to the development of the guidelines.
5.25
The guidelines provided that there would be a tiered review process before finalising the list of successful projects. Sport Australia would conduct eligibility and merit assessments and make recommendations to the Industry Assessment Panel (panel). The panel’s role was to review these recommendations and finalise a list of recommendations for the Sport Australia Board. Applications would be considered by the Board and sent to the Minster for approval as the program delegate.
5.26
The audit stated that the guidelines were well structured, providing an appropriate overview of the program, its objectives, and clearly identified program funding priorities. Identifying areas for improvement, the audit highlighted that guidelines were not updated when additional program funding was made available in December 2018 or in April 2019. The ANAO also suggested that eligibility criteria could have been clearer for applicants.
5.27
The audit concluded that while records of the assessment process were largely adequate, they could have been improved by including a concise reason in support of the merit score that was awarded. This finding was reflected in recommendation three.
Assessment by Sport Australia
5.28
Both eligibility and merit assessment was undertaken by Sport Australia assessors. Whilst a number of assessors were involved with the development of the guidelines and assessment methodology, no formal training was provided to the core assessors, or assessors brought in later who had no experience with the guidelines.
5.29
Planned assessment processes were not followed by Sport Australia. Sport Australia stated this was due to the high number of applications received, and the tight timeframes set. This resulted in 94 per cent of eligibility assessments being undertaken by one assessor, rather than the planned approach of two assessors. In respect of merit assessment, no applications were considered by the planned three assessors, with 47 per cent of merit assessments undertaken by a single assessor. Planned moderation activities also failed to take place. Where merit scores varied by more than thirty points, an average of scores was used instead.
5.30
The eligibility of applications was considered at three separate points in the assessment process. Ultimately 113 applications were considered ineligible, with 36 applications deemed ineligible at the second and third consideration points. The audit posits that this reflects the need for greater clarity in relation to eligibility criteria, and the amount of assessments required to be completed within the short timeframe.
5.31
Each eligible application was assessed against three merit criteria. The audit agreed that Sport Australia’s assessment process clearly identified the value for money of each eligible application against the three published criteria.
5.32
The first criteria related to community participation in sport and comprised half of the total assessment score. There were three elements that needed to be demonstrated. The audit found that whilst 59 per cent of applications scored strongly in two of the three domains, 45 per cent of those projects did not obtain funding approval.
5.33
The second criteria related to demonstrating community need for the program. The audit found that only 55 per cent of the applications assessed as ‘good’ or ‘excellent’ were approved for funding.
5.34
The third criteria related to the applicants’ capacity to deliver the project. The audit found that local government organisations scored higher than sporting organisations in this respect. Seventy-six per cent of projects approved for funding scored ‘good’ or ‘excellent’ in this criteria.
5.35
On 20 March 2019, the Minister for Sport’s Office instructed Sport Australia to conduct additional assessment work on nine applicants who were invited to amend their previously submitted applications or submit applications following the advertised closing date. This was contrary to advice within the program guidelines. The audit states that Sport Australia had concerns about this instruction, and raised these with the Minister for Sport’s Office. The audit found that eight of the nine proposals did not demonstrate ‘high merit’ against the merit criteria yet were all approved for funding in the third round.
Ranking applications
5.36
Sport Australia ranked applications according to the three streams:
Stream 1: Projects seeking under $50 000;
Stream 2: Projects seeking from $50 001 to $200 000; and
Stream 3: Projects seeking an amount between $201 000 and $500 000.
5.37
This approach was proposed in order to ensure that the total pool of funding could service a minimum of 400 applications.
5.38
Within each stream Sport Australia recommended that the assessment panel approve the highest ranking applications, except for occasions where this approach would have resulted in the one organisation being approved for multiple applications (in situations where the organisation had applied for funding in relation to multiple projects).
5.39
The audit highlighted that ranking applications by stream, and applying unpublished criteria (limiting any successful organisation to a maximum of one grant) was not consistent with the program guidelines, or Sport Australia’s Grant Management Framework.
Assessment by the Minister’s Office
5.40
On 26 September 2018, following receipt of a spreadsheet with details regarding Sport Australia’s assessments of applications, the Office of the Minister for Sport conducted a separate parallel grants assessment process to Sport Australia. The audit stated that the Minister for Sport’s Office considered additional analysis including the location of projects.
5.41
On 20 November 2018, the Minister for Sport’s Office proposed that ‘applications located in a marginal or targeted electorate be successful at a significantly higher rate than the remaining applications’. The audit reported that ‘applications that the Minister for Sport’s Office was proposing be successful were not those assessed as having demonstrated the greatest merit in terms of the published program guidelines’.
5.42
The audit concluded that in all three funding streams, spreadsheets exchanged between Sport Australia and the Minister for Sport’s Office included an assessment score from the Sport Australia assessment process. Despite this ‘the award of funding was not directed to the highest scoring but not yet funded applications’.
Decision-making process regarding funding
5.43
The program guidelines outlined that applications would be assessed by an industry panel comprised of representatives from the Department of Health, Sport Australia, the sporting industry at large, and the Sport Australia Board. Following this assessment, ‘[e]ligible applications that are assessed by the industry panel as meeting or exceeding the selection criteria will proceed to Sport Australia Board for endorsement’. The guidelines also specified that the ‘Minister for Sport will provide final approval’.
5.44
The audit found that ‘funding decisions for each of the three rounds were not informed by clear advice and were not consistent with the program guidelines’. In addition, the approach to making funding recommendations and decisions differed for each of the three funding rounds.
Decision-making authority
5.45
An important step in planning a governance framework for a grant program is identifying who will have responsibility for deciding which applicants will be awarded a grant and establishing that this responsibility is underpinned by the relevant legal authority. In this instance, as a corporate Commonwealth entity, Sport Australia was not bound by the CGRGs. Nonetheless, as previously discussed, Sport Australia has developed a Grant Management Framework that is based on the seven key principles for grants administration outlined in the CGRGs.
5.46
Other than the legislative requirements that apply where a Minister approves proposed expenditure contained in the PGPA Act, the decision-making and reporting requirements of the CGRGs did not apply to the Minister in relation to the CSIG. This includes the requirement for written advice to be given to the Minister from the relevant agency and reporting of the approval of grants recommended be rejected by the agency to the Minister for Finance. This led to the ANAO recommending that:
The Australian Government amend the CGRGs to require that the advising, decision-making and reporting requirements applying to situations where a minister approves grant funding be extended to apply to corporate Commonwealth entities in situations where a minister, rather than the corporate entity, is the decision-maker. This would mean that there would be a single framework in place for all circumstances where a minister decides upon the award of grant funding.
5.47
In response to the ANAO’s recommendation, the Department of Finance advised that the Australian Government was acting to address this matter, and would aim to implement the changes suggested by the end of 2020. The Department of Finance advised that the Public Governance, Performance and Accountability Rule 2014 would be amended to duplicate ‘relevant mandatory requirements of the CGRGs and will apply when a Minister is the decision-maker for a grant administered by a corporate Commonwealth entity’. This rule was signed on 17 July 2020, tabled in the Senate the next sitting day 24 August 2020 and, at the time of this report, is due to commence on 1 December 2020.
Legal basis for decision-making
5.48
The Committee did not consider the legal basis for decision making in detail at public hearings for this inquiry. However, the ANAO outlined that a shortcoming of the CSIG program was that while guidelines stated that the Minister for Sport would approve funding, there was no record of the Minister being informed of the legal basis for this power. Further, as at the time of the ANAO’s report, it was still not clear what this legal basis was.
5.49
If the Minister was to approve grants, the ANAO also outlined that legal advice may have been required regarding the directions power under Section 11 of the Australian Sports Commission Act 1989 (which Sports Australia advised was not sought). This power enables the Minister to “give written directions to the Commission with respect to the policies and practices to be followed by the Commission in the performance of its functions, and the exercise of its powers”. Regardless, no section 11 directions were given to Sport Australia in 2018–19 and thus the ANAO could find no evidence of legal authority to substantiate the Minister’s role as the approver.
5.50
There has also been broader public commentary on the possible Constitutional limitations of the Commonwealth in awarding sporting grants. Given this, and the significant uncertainty regarding the legal basis for the Minister’s role in approving grants, the Committee recommends that Sport Australia seek legal advice on the authority, duty and role of the Minister and ASC and amend its guidelines for all current and future grant programs as necessary, and report back to the JCPAA in six months.
5.51
Recommendation 6 of this report outlines that Sport Australia should seek legal advice and amend its guidelines in relation to current and future grants programs to clarify the authority, duty and role of the Minister for Sport and the Australian Sports Commission.
Advice and recommendations
5.52
As outlined, Sport Australia largely used the published program guidelines to assess applications and rank them according to merit. The assessment panel subsequently reviewed these assessments and recommended 426 applications for funding based, ‘in large part’, on which applications were the ‘most meritorious’. In accordance with the program guidelines, the recommendations were forwarded to the Sport Australia Board for endorsement. Board endorsement was obtained for the 426 applications on 17 November 2018.
5.53
The ANAO report stated that it was the intention of Sport Australia to submit the board-endorsed list and funding recommendations to the Minister for Sport soon after. The brief was put ‘on hold’ following advice from the Minister’s Office that additional funding was likely to be made available for the program through the Mid-Year Economic Financial Outlook process.
5.54
Before the issue of additional funding was resolved, the ANAO found that the Minister’s Office had provided a list of ‘approved’ applications for funding to Sport Australia. As a result, the initial brief was amended and included a revised list of 221 projects that ‘was informed by the list that had been provided to Sport Australia by the Minister’s Office’. The list of recommended projects endorsed by the Sport Australia Board in accordance with the published guidelines was not provided to the Minister for Sport.
5.55
The Minister approved the brief on 11 December 2018, and the final list of 224 projects to be funded (in round one) was finalised on 21 December 2018. The ANAO found that these funding decisions resulted from the Minister for Sports’ Office consideration of factors not contained within the assessment criteria.
5.56
Like round one, the round two funding decisions were not informed by recommendations from the assessment panel and the Sport Australia Board. Following the announcement in January 2019 of a second round of funding as part of the 2018 MYEFO process, Sport Australia prepared a second brief recommending applications based on the assessment and ranking process undertaken by Sport Australia. This brief was withdrawn before it was received by the Minister’s Office.
5.57
The next day (29 January 2019), the Minister’s Office provided Sport Australia with a list of 236 projects it had identified for round two funding. As a result, Sport Australia revised the recommendations in the ministerial brief with consideration of the projects identified by the Minister’s Office.
5.58
Despite this, the Minister’s Office requested that the list attached to the brief be changed to the projects first identified by the Office on 29 January 2019, less four projects. An amended brief, containing advice on projects that ‘carry risk’ and the list of 232 projects, was approved by the Minister on 4 February 2019.
5.59
A third round of funding was announced as part of the 2019 Budget process. Sport Australia adopted a different approach to the provision of advice in round three.
5.60
The ministerial brief dated 3 April 2019 contained its own recommendations for 245 projects to be funded based on the original assessments undertaken by Sport Australia and endorsed by the Board. The ANAO found that when the signed brief was returned on 11 April 2019, Sport Australia’s list of recommended applications had not been approved. Instead, a replacement list of 228 grants was approved, ‘73 per cent of which had not been recommended by Sport Australia’.
5.61
In regard to the advice provided to the Minister, the ANAO found that ‘appropriate advice on the assessed overall merits of each eligible application was provided by Sport Australia to the Minister’ as the draft funding spreadsheet presented for consideration to the assessment panel was provided to the Minister’s Office at their request. The assessment scores on this sheet indicated the extent to which Sport Australia’s assessment team considered each eligible application had met the published criteria. At the time, this draft spreadsheet had not been finalised by the assessment panel or endorsed by the Board.
5.62
The ANAO suggested that information on applications under assessment being provided to the Minister’s Office before the assessment process was completed, is not best practice:
The ANAO has previously identified that it is prudent for the approver (and their office, where relevant) to remain at arm’s length from the assessment process as this separation avoids the potential for perceptions to arise that the approver has influenced the funding recommendations subsequently put forward for the approver’s consideration. There are also risks relating to the possible funding of ineligible applications.
5.63
The ANAO also found that appropriate advice and recommendations had not been provided to the Minister for the first two funding rounds:
Clear funding recommendations that were consistent with the program guidelines were not provided for the first two funding rounds because Sport Australia’s briefings for those two rounds did not reflect the results of its assessment work.
5.64
In addition, contrary to the program guidelines, neither the assessment panel nor the Sport Australia Board recommended projects for funding in the second and third rounds.
Funding decisions
5.65
The ANAO considered that decisions on the applications awarded funding were underpinned by the results of what it described as a ‘parallel assessment process conducted by the Minister’s Office’. It was this assessment process, rather than Sport Australia’s process ‘largely in accordance with the published guidelines’ and the relative merits of each application, that informed funding decisions.
5.66
The ANAO reported that ‘evidence of distribution bias in the award of grant funding’ was identified:
Applications from projects located in [‘marginal’ or ‘targeted’] electorates were more successful in being awarded funding than if funding was allocated on the basis of merit assessed against the published program guidelines.
5.67
The ANAO also found that decision-making processes, including reasons for funding particular applications over others, was ‘not clearly documented’. As Sport Australia is not subject to the CGRGs, however, there is no legal requirement for these reasons to be documented. In addition, although Sport Australia’s Grant Management Framework requires that reasons be documented, the Minister is not required to comply with that framework. The ANAO advocated that this lack of documentation:
…adversely affects transparency. For example, it meant that, when informing unsuccessful applicants that they had not been awarded a grant, Sport Australia was unable to communicate the full and actual reasons for the rejection of their application, or otherwise provide those applicants with advice on the reasons for their application being unsuccessful.
Managing conflicts of interest within Sport Australia
5.68
Sport Australia utilised a conflict of interest management framework comprising of two main policies: the Code of Conduct, which included a non-disclosure requirement for employees in relation to ASC business unless required or authorised to do so; and the Conflict of Interest Policy and related guidelines, which included ‘a requirement for declarations of interest to be made and updated’, addressing both conflicts of role and conflicts of personal interest.
5.69
The ANAO identified that the conflict of interest management framework required employees to declare a conflict in situations where the officer considered that they have a conflict.
5.70
Employees involved in the CSIG were subject to a more stringent process, where officers undertaking assessments of individual applications were required to declare any potential conflicts prior to beginning work. If a conflict of interest was identified, the officer was reassigned to another application.
5.71
The ANAO found that conflicts of interest ‘were appropriately managed for the assessment team, but not more broadly within Sport Australia’.
5.72
The ANAO identified that:
there was an undeclared and unmanaged conflict of interest involving a senior Sport Australia employee with responsibilities for the CSIG program and their relationship with an organisation linked to applicants and of the CSIG program (and ongoing engagement with that organisation.
5.73
The ANAO found that this conflict of interest was reported to Sport Australia but that the agency did not require the officer to declare the conflict of interest or otherwise manage it. The ANAO further stated that:
There is a risk that the sport linked to this organisation was provided with a competitive advantage compared to other sports and potential applications by that Sport Australia employee.
5.74
Sport Australia, however, took the view that the sport involved was highly organised regarding identifying and applying for funding opportunities.
5.75
Recommendation 2 of the ANAO’s report suggested that Sport Australia ‘require declarations to be made as to whether or not employees involved in the design and oversight of funding programs have a conflict of interest’, which was accepted. Sport Australia advised that it had updated its conflict of interest policy and Grant Management Framework:
to reflect the requirement for all employees involved in the design or oversight of any funding programs, or the assessment of funding applications, to declare whether or not they have any conflict of interest, including potential conflicts or those reasonably able to be perceived.
5.76
The ANAO’s report did not examine conflict of interest issues in relation to the Minister’s office and this Committee makes no finding on those matters.
Communication with stakeholders
5.77
The audit report found that timely advice on funding decisions was not provided to applicants. The grant guidelines specified that announcements of funded applications would be made from 1 November 2018 with projects expected to be completed by 30 June 2019. The program guidelines were not updated following the allocation of two more rounds of funding. This meant that some applicants were not advised that they were unsuccessful until 26 April 2019 (seven months after applications had closed).
5.78
Like the funding decisions, announcements about successfully funded projects differed between rounds. For the first two rounds, the Minister’s Office instructed Sport Australia not to contact the successful applicants until after public announcements had been made by the Minister and local member.
5.79
Non-Government Members of the House of Representatives received the same information seven days after other parliamentarians for round one and 14 days after for round two. For round two, on the day hard copy letters were provided to non-government members (19 February 2019), Coalition candidates were provided the same information electronically for successful projects within the electorate they were contesting. The manner in which funding announcements were made meant that applicants waited much longer to find out whether their projects had been successful than was necessary.
5.80
This approach to funding announcements by the Minister and parliamentarians in rounds one and two contributed towards the delays experienced by applicants in receiving their grant funding. Not all parliamentarians notified the Minister’s Office that they had contacted applicants and not all notifications were passed onto Sport Australia. This created a substantial additional workload for Sport Australia in responding to applicant complaints about ‘not [having] heard anything’ from Sport Australia as expected.
5.81
In round three, the ANAO found the process for notifying applicants was significantly improved compared to the first two rounds. The Minister’s Office requested that Sport Australia not make public the list of successful projects for round three, pending the Minister’s own announcements. Sport Australia was permitted, however, to contact successful applicants but requested that they not make their projects public without permission.
5.82
Recommendation 5 of this report addresses improvements to the timely announcement and communication to stakeholders of grant opportunities and outcomes of grant programs.
Role of Parliamentarians
5.83
During the public hearings, a number of questions were raised regarding the role of Parliamentarians in providing feedback and input to lead agencies on prospective grant applications. Of primary interest was the issue of whether processes could be formalised or better standardised and structured in relation to the contribution or input of Parliamentarians to Government Grants programs.
5.84
The Auditor-General stated:
[W]e see in grants guidelines occasionally, if not regularly, that information from local MPs is part of the information base that goes to decision-making … The key point that we would make is that if it's in the process it should be in the process, and information that's fed in should, like all other information fed into the decision-making process, be clearly and transparently fed in, so that all applicants can be treated equitably.
5.85
Examples were provided of Australian Government grant programs where Parliamentarians played a role in prioritising grant funding applicants, including the Anzac Centenary Local Grants Program and the Stronger Communities Programme. However, as the ANAO had not audited either of these programs, it was unable to comment on whether the mechanisms in the program guidelines were applied and effective.
5.86
The Committee believes further consideration should be given to establishing a formalised process enabling feedback to be provided by Parliamentarians on the needs of their communities.
Committee comment
5.87
It is the Committee’s view that grant funding should be assessed against the stated eligibility criteria of a particular program, and that guidelines developed should reflect the objectives of the program. Funding decisions should be merit-based and undertaken transparently and in accordance with the directions set out by the PGPA Act, its associated Rule and guidance issued by Finance.
5.88
Appropriately documenting administrative decisions is a key element of probity and transparency, which is particularly applicable in grants administration. Documentation also assists with transparency in any subsequent review of decisions. The Committee is of the view that stronger requirements in relation to documentation, particularly in relation to decision-making, is warranted to ensure Commonwealth entities maintain transparency and accountability.
5.89
The Committee welcomes changes in response to Recommendation 4 of the ANAO report to extend the requirements contained in the grants framework to corporate Commonwealth entities. The broadened framework will address many of the issues found in the ANAO’s audit, and provide greater transparency and probity regarding the awarding of grant funding for Government agencies.
5.90
The ANAO’s identification of the inconsistent approach taken between rounds is concerning, particularly in relation to communication of decisions to grant applicants. This could potentially cause issues for grant applicants, such as being unable to begin work on projects until announcements were made. Administration of the CSIG would have also been further improved by more timely and consistent communication with grant applicants and MPs regarding the outcome of their applications.
5.91
The Committee acknowledges the question raised by the Auditor-General regarding the legal basis for decision making and recommends that Sports Australia seek legal advice to clarify the authority, duty and roles of the Minister for Sport and the Australia Sports Commission and report back to the Committee the basis on which office holders in those roles can make decisions in future grants programs.
5.92
The Committee acknowledges the many concerns raised regarding the administration of the CSIG program, including those raised by the Auditor-General in the ANAO Report, and publicly through subsequent media commentary and public debate.
5.93
The Committee acknowledges that the Senate Select Committee on Administration of Sports Grants was established to inquire into inquire into and report on the administration and award of funding under the CSIG Program.
5.94
The JCPAA’s inquiry, however, was broadly confined to the matters raised by the ANAO and in evidence, rather than in addressing issues identified in other forums. During the inquiry process, the Committee focussed primarily of aspects which raised thematic and systemic issues for grants administration.
5.95
It is the Committee’s view that there are aspects of the administration of this Program that did not satisfy public and community expectations. The Committee anticipates that its recommendations made in this Report in response to the three grant programs that were the subject of this inquiry, will, if adopted by the Government, also address issues raised by the ANAO in relation to the CSIG program.
5.96
The ANAO’s commentary regarding the role of MPs in grants administration raises a number of important questions. The Committee did not have sufficient evidence to form a view on this however considers that further consideration should be given to establishing structured processes whereby parliamentarians can provide feedback on the needs of, and advocate for, their communities.
Recommendations
5.97
The Committee recommends that Sport Australia review its guidelines in relation to all current and future grants programs to clarify:
The authority, duty and role of the Minister for Sport; and
The authority, duty and role of the Australian Sports Commission Board in relation to decision-making, and that Sport Australia report back to the Committee in six months.
Ms Lucy Wicks MP
Chair
2 December 2020