Additional comment on the Community Sport Infrastructure Grants (CSIG) program are required, supplementing the Committee’s report.
Quite simply, the administration of this program has been nothing short of a scandal. Hundreds of millions of dollars of taxpayer funds, funnelled to Liberal Party marginal seats in a dodgy process run out of the Minister’s Office with the direct involvement of the Prime Minister’s Office.
Months of attempted cover-ups, ducking and weaving, refusal to act then eventually the Minister resigned.
A year on there is still no clarity on who applied, who missed out and no apology to the hundreds of sporting community clubs across Australia who should have received funding but did not – dudded by the Morrison Liberal Government’s rorts.
Auditor-General Report No.23 2019-20 investigated the Award of Funding under the Community Sport Infrastructure Program.
The CSIG program was audited after the Liberal candidate for Mayo, Georgina Downer, presented a Liberal Party branded novelty cheque to a recipient, rather than the sitting MP, Rebekha Sharkie, being notified of the opportunity to announce the grant.
This occurred throughout the program, with not only Government MPs but also Coalition candidates routinely being given notice of successful applicants in their electorate ahead of non-Government MPS.
This provided a clear political advantage, with Coalition MPs and candidates able to deliver the news to successful applicants and announce the grants before sitting non-Government MPs were even aware of recipients in the electorates.
The Auditor-General found that the minister’s funding decisions “were based on the results of a parallel assessment process conducted by the Minister’s Office” which “drew upon considerations other than the assessment criteria, such as project locations including Coalition ‘marginal’ electorates and ‘targeted’ electorates”.
In simple terms, the government ignored the merit assessment and recommendations of the independent agency responsible for administering the program and instead used the grants pork-barrel marginal and target seats ahead of the 2019 election.
On 5 February 2020 the Senate established the Senate Select Committee on Administration of Sports Grants to further investigate the matter and, on 12 February 2020, the Joint Committee of Public Accounts and Audit also agreed to inquire into matters contained and associated with the Auditor-General's Report No. 23.
The Auditor-General found that the Minister’s office ignored Sport Australia’s assessments and recommendations from the start.
In Round 1, the Minister’s office told Sport Australia which applications would be approved by the Minister and 41 per cent of the projects were not on the list of 426 endorsed by the Sport Australia board.
In Round 2, 70 per cent of projects approved by the Minister were not on the list Sport Australia planned to recommend.
In Round 3, 73 per cent of projects approved by the Minister had not been recommended by Sport Australia, noting that when the signed brief was returned to Sport Australia on 11 April 2019 “Sport Australia’s list of recommended applications had not been approved” and instead “the Minister approved a replacement list.”
During Senate Estimates in March this year, it was revealed that changes to the list of grants were made between 4 April 2019, when the then Minister signed the brief, and 11 April, when the signed brief was finally provided to Sport Australia.
We note that Senator McKenzie released a statement on 5 March 2020, in which she said she did not make any changes or annotations to this brief or its attachments after 4 April 2019, but is yet to agree to appear before the Senate Select committee to clarify how these changes could have occurred without her knowledge or approval.
The Auditor-General found there was “evidence of distribution bias in the award of grant funding” and that the awarding of grants “reflected the approach documented by the Minister’s Office of focusing on ‘marginal’ electorates held by the Coalition as well as those electorates held by other parties or independent members that were to be ‘targeted’ by the Coalition at the 2019 Election”.
For example, the report noted that nine of the ten electorates that received the greatest amount of funding were either marginal electorate or an electorate the Minister’s Office had identified as being ‘targeted’ by the Coalition.
Similarly, nine of the ten electorates that received the least funding were held by Labor.
The Auditor-General found projects located in Safe and Fairly Safe Coalition-held electorates received 14 per cent less funding than if funding had been awarded on the basis of assessed merit.
This was also the case for projects located in electorates held by minor parties or independent members not being targeted by the Coalition.
Coalition-held marginal electorates received nine per cent more funding than they would have if funding had been awarded on the basis of Sport Australia’s merit assessments.
The 17 Coalition ‘targeted’ electorates held by Labor, minor parties or independents received 79 grants to the value of $13.0 million compared with 54 grants to the value of $9.2 million that would have been awarded had funding been awarded based on merit assessments.
Nearly three quarters of the recipient projects with the lowest merit assessment scores were in Coalition-held or ‘target’ electorates.
Despite these clear findings, the Government has continued to claim it did not use the program to pork-barrel seats it needed to win at the 2019 Election.
Instead, the Prime Minister has relied on a report from his former Chief of Staff, now Secretary of the Department of Prime Minister and Cabinet, Philip Gaetjens, who claimed in a submission to the Senate Select Committee on Administration of Sports Grants that the evidence he has been able to review “does not support the suggestion that political considerations were the primary determining factor in the Minister’s decisions to approve the grants”.
However, Mr Gaetjens himself has told the Select Committee that he did not have access to all of the information considered by the Auditor-General in his performance audit.
Another key finding of the Auditor-General was that “there was no legal authority evident to the ANAO under which the Minister was able to be the approver of CSIG program grants to be paid from the money of Sport Australia”.
Numerous legal experts have supported this position in their evidence to the Senate Select Committee on Administration of Sports Grants.
The Government claims it has legal advice that supports the legal authority of the then Minister to be the decision maker but is not prepared to table that advice in the Parliament.
Additionally, legal advice provided to Sport Australia on the issue of the Minister’s legal authority is among key evidence not provided to the Senate Select Committee on Administration of Sports Grants.
Sport Australia had agreed (27 February 2020) to provide that advice to the Senate Select Committee on Administration of Sports Grants and later confirmed (13 May) that it would provide the advice, while also requesting that the Committee consider it in confidence.
Current Minister for Sport, Senator Richard Colbeck, subsequently (16 July) made a public interest immunity claim over that legal advice.
Public interest immunity claims on the basis of privacy have also been used by the Government as the basis for redacting key information in documents central to the program, including a spread sheet used by the Minister’s office that identified applications in marginal and target electorates.
The redaction of information including applicant, basic project details and Sport Australia merit assessment score has hindered further investigations into the Government’s handling of the CSIG program.
The Government continues to claims it did nothing wrong in relation to the awarding of CSIG grants but at the same time continues to avoid transparency in relation to this matter.
Auditor-General Report No.23 (2019-20) made four recommendations.
Sport Australia agreed immediately to three recommendations relating to its processes.
The Department of Finance initially noted the report’s recommendation to amend the Commonwealth Grant Rules and Guidelines (CGRGs) to ensure they apply to corporate Commonwealth entities in the situation where a Minister, rather than the entity, is the ultimate decision maker, and said it would be considered by Government.
On August 24, 2020, more than seven months later, the Government tabled the Public Governance, Performance and Accountability Amendment (Grant Rules for Corporate Commonwealth Entities) Rules 2020, which seeks to address this recommendation.
There is much more still to be revealed about this scandal that the Government is still trying to hide.
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Julian Hill MP
Deputy Chair
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Hon Dr Andrew Leigh MP
Committee Member
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Pat Conroy MP
Committee Member
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Senator Jess Walsh
Committee Member
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Senator Kimberley Kitching
Committee Member
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Tim Watts MP
Committee Member
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