ANAO, Audit Report No. 25 (2015–16) Delivery and Evaluation of Grant Programmes
Conclusion
Each audited department had in place a sound overarching framework through grant agreements to oversight the delivery of projects awarded grant funding. But it was common for there to be inadequacies in the administration of those agreements. This included delays in obtaining progress and other reports from funding recipients, as well as some reports not being obtained at all.
Delays in the delivery of projects were common across the three programmes. This situation resulted in the programme completion date being significantly delayed for two of the programmes. Nevertheless, reflecting that it was common for grant funding to be paid in advance of need, all funding had been paid by the nominated programme completion date even in respect to yet to be completed projects.
Of the three audited entities, only the Department of Industry, Innovation and Science planned and delivered timely and comprehensive programme evaluation work.
Recommendations
Audit Report No. 25 (2015-16)
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Paragraph 2.13
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Response from audited entities: Agreed (with the Department of Infrastructure and Regional Development agreeing with qualification)
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Recommendation No. 2
Paragraph 2.40
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To properly manage taxpayer’s funds, the ANAO recommends that, for project-based grants, entities clearly link payments to the cash flow required in order for the project to progress.
Response from audited entities: Agreed (with the Department of Industry, Innovation and Science partially agreeing)
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Recommendation No. 3
Paragraph 3.15
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To benefit fully from programme evaluation activities, the ANAO recommends that entities administering grant funding develop implementation plans to follow through on evaluation findings and recommendations.
Response from audited entities: Agreed
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Recommendation No. 4
Paragraph 3.28
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The ANAO recommends that, when designing and implementing grant programmes that fund capacity building and/or demonstration projects, entities implement strategies that aim to influence the behaviour of entities other than the grant recipients, and measure the impact.
Response from audited entities: Agreed (with the Department of Social Services noting this recommendation)
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ANAO, Audit Report No. 4 (2016–17) Award of Funding under the 20 Million Trees Programme
Conclusion
The Department of the Environment and Energy appropriately designed the 20 Million Trees Programme to align with the objectives established for the programme by government, taking into account election commitments and the required focus on community engagement through the award of programme grants. The higher cost of planting trees under granting arrangements, as opposed to tendered large-scale plantings also to be delivered under the programme, was identified early by the department and clearly communicated to government. The department also provided early advice to government that the programme’s target of 20 million trees would not be achieved within the funding initially allocated ($50 million) and that additional funding would be required. In addition, the department put in place a framework in which to deliver key programme elements, such as published programme guidelines and a suite of planning and guidance materials.
The effectiveness of the award of funding under the programme was, however, undermined by widespread weaknesses in administrative practices. In particular: published assessment processes were not followed; conflicts of interest were not appropriately recorded and managed; eligibility assessments were not conducted in a transparent or timely manner; assessment practices were not efficient; and key issues relating to the conduct of the assessment and selection process were not sufficiently drawn to the former Minister of the Environment’s attention to inform funding decisions.
Over recent years, the ANAO has identified weaknesses in the department’s processes for assessing grant applications for eligibility and merit. In three recent audits, the ANAO made recommendations to the department to strengthen these processes, such as recommending that the department: design clear eligibility criteria; establish clear eligibility requirements in grant guidelines; assess all eligibility criteria in all grants rounds conducted; retain sufficient documentation to evidence eligibility and merit assessments; and implement appropriate probity arrangements. The findings of this audit indicate that limited progress has been made by the department to respond to earlier ANAO findings.
Recommendations
Audit Report No. 4 (2016-17)
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Paragraph 3.24
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Department of the Environment and Energy’s response: Agreed
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Recommendation No. 2
Paragraph 4.23
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The Department of the Environment and Energy should draw to the attention of decision-makers important issues relating to the assessment and selection process for grants programmes and ensure that accurate information is provided in briefings for decision-makers.
Department of the Environment and Energy’s response: Agreed
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ANAO, Audit Report No. 12 (2016–17) The Design of, and Award of Funding under, the Living Safe Together Grants Programme
Conclusion
Programme design was undertaken in a timely manner and was reasonably effective. This included published guidelines that outlined a robust assessment process and included well-designed merit criteria. But the processes through which applications were selected and subsequently awarded funding were flawed in significant respects. Of note was that AGD departed in some important respects from the assessment approach set out in the programme guidelines. Only 21 of the 42 recommended and approved applications should have been successful (totalling funding of $1 million of the $1.9 million awarded) had AGD only recommended eligible applications that had been scored as satisfactorily meeting the published merit criteria.
At the time he was asked to approve funding, the Attorney-General was advised that, upon completion of their projects, it was expected that funding recipients would register on the Directory of CVE Intervention Services (CVE Directory). The CVE Directory was to be used to connect at-risk individuals with appropriate services. However, a key shortcoming in the programme guidelines was that AGD had not made clear enough to applicants that a key purpose of awarding grants was to have funding recipients register for the CVE Directory. Thirteen funding recipients have indicated to AGD that they will participate in the Directory, but two have advised they will not and the intentions of a further 26 recipients are not yet known.
Whilst some progress has been made, there remains considerable scope for improvement in AGD’s administration of grant programmes. This is reflected by the continuing deficiencies in AGD’s approach to assessing the eligibility and merit of grant applications, as well as in the advice to decision-makers about those applications that should be funded and those that should be rejected.
Recommendation
Audit Report No. 12 (2016-17)
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Paragraph 5.39
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Attorney-General’s Department response: Agreed
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ANAO, Audit Report No. 35 (2016–17) Indigenous Advancement Strategy
Conclusion
While the Department of the Prime Minister and Cabinet’s design work was focused on achieving the Indigenous Advancement Strategy’s policy objectives, the department did not effectively implement the Strategy.
The Australian Government’s identified priority areas are reflected in the Strategy’s program structure which is designed to be broad and flexible. The department considered the potential risks and benefits associated with the reforms. Planning and design for the Strategy was conducted in a seven week timeframe, which limited the department’s ability to fully implement key processes and frameworks, such as consultation, risk management and advice to Ministers, as intended.
The implementation of the Strategy occurred in a short timeframe and this affected the department’s ability to establish transitional arrangements and structures that focused on prioritising the needs of Indigenous communities.
The department’s grants administration processes fell short of the standard required to effectively manage a billion dollars of Commonwealth resources. The basis by which projects were recommended to the Minister was not clear and, as a result, limited assurance is available that the projects funded support the department’s desired outcomes. Further, the department did not:
assess applications in a manner that was consistent with the guidelines and the department’s public statements;
meet some of its obligations under the Commonwealth Grants Rules and Guidelines;
keep records of key decisions; or
establish performance targets for all funded projects.
The performance framework and measures established for the Strategy do not provide sufficient information to make assessments about program performance and progress towards achievement of the program outcomes. The monitoring systems inhibit the department’s ability to effectively verify, analyse or report on program performance. The department has commenced some evaluations of individual projects delivered under the Strategy but has not planned its evaluation approach after 2016–17.
Recommendations
Audit Report No. 35 (2016-17)
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Paragraph 3.29
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Department of the Prime Minister and Cabinet’s response: Agreed
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Recommendation No. 2
Paragraph 4.28
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For future Indigenous Advancement Strategy funding rounds, the Department of the Prime Minister and Cabinet:
a. publishes adequate documentation that clearly outlines the assessment process and the department’s priorities and decision-making criteria; and
b. consistently implements the process.
Department of the Prime Minister and Cabinet’s response: Agreed
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Recommendation No. 3
Paragraph 4.49
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The Department of the Prime Minister and Cabinet, in providing sound advice to the Minister for Indigenous Affairs about the Indigenous Advancement Strategy:
a. clearly and accurately outlines the basis for funding recommendations; and
b. documents the outcomes of the decision-making process.
Department of the Prime Minister and Cabinet’s response: Agreed
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Recommendation No. 4
Paragraph 5.21
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The Department of the Prime Minister and Cabinet identify the outcomes and results to be achieved through the Indigenous Advancement Strategy and analyse performance information to measure progress against these outcomes.
Department of the Prime Minister and Cabinet’s response: Agreed
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