- Introduction
Background to the inquiry
1.1Under section 8(1) of the legislation establishing the Joint Committee of Public Accounts and Audit (JCPAA), the Public Accounts and Audit Committee Act 1951, one of the duties of the Committee is to ‘examine all reports of the Auditor-General (including reports of the results of performance audits) that are tabled in each House of the Parliament’. The Committee is empowered to ‘report to both Houses of the Parliament, with any comment it thinks fit, on any items or matters in those reports, or any circumstances connected with them, that the Committee thinks should be drawn to the attention of the Parliament’.
1.2On 8 September 2022, the Committee resolved to conduct an inquiry into Commonwealth grants administration with a view to strengthening the integrity and administration of grants. The Committee determined that the inquiry would have particular regard to:
- The status of recommendations included in the JCPAA’s Report 484 The Administration of Government Grants
- Any matters contained in or connected with the following Auditor-General's Reports:
- No. 47 (2020-21) Administration of Commuter Car Park Projects within the Urban Congestion Fund
- No. 16 (2021-22) Awarding of Funding under the Safer Communities Program
- No. 21 (2021-22) Operation of Grants Hubs
- No. 1 (2022-23) Award of Funding under the Building Better Regions Fund
- Equity, decision-making and matters relating to the allocation of funding under the following grant programs:
- Urban Congestion Fund
- Regional Growth Fund
- Modern Manufacturing Initiative
- Possible changes to the Commonwealth Grants Rules and Guidelines.
Conduct of the inquiry
1.3The inquiry received 24 submissions and 25 supplementary submissions (18 of which contained responses to questions provided in writing by the Committee or taken on notice at public hearings). Four public hearings for the inquiry were conducted in Canberra.
1.4The list of submissions and supplementary submissions is at Attachment A. The public hearings are listed at Attachment B.
Areas of focus in the inquiry and report structure
1.5Rather than produce a very lengthy report with Chapters dedicated to each ANAO Audit Report and grant program considered documenting every instance of maladministration identified, and every submission received, the Committee instead has elected to publish a shorter and more accessible report and focussed on the key thematic issues identified in support of the Committee’s conclusions and recommendations.
1.6This approach should in no way be taken as an acceptance of what has been identified through this inquiry or that the Committee has not considered all of the evidence received. Concerns range from sloppy administration to flawed program design and deliberate concealment resulting in egregious misuse of public money. While many such instances may technically be legal they must still be considered unacceptable. The full detail of the inquiry remains publicly available via the submissions and Hansards of public hearings.
1.7The structure of this report is therefore based on the key thematic areas of focus for the Committee through the inquiry. There are two analysis chapters.
1.8Chapter 2 analyses issues relating to the adherence to the Commonwealth Grants Rules and Guidelines (CGRGs) under the following headings:
Competitive versus non-competitive processes. Discusses that the majority of the Commonwealth grants schemes are not currently administered using the CGRG-preferred competitive processes.
Election commitments. Analyses the funding of election commitments through the grants processes and the applicability of the current legislative provisions, rules and guidelines.
Requirements for officials and decision-makers. Discusses the clarity and robustness of the advice to and from decision-makers around merit assessments and grant awards. Also raises the issues around record-keeping and the appropriate level of detail that should be provided that explain the decisions taken by ministers. Raises concerns regarding the pooling of applications by entities when presenting merit assessments.
The use of unspecified ‘other factors’ in grants assessments. Discusses the frequent use of ‘other factors’ by ministerial panels when making a final determination on an award that applicants will not typically have had a chance to address or respond to.
Funding not subject to the grants rules. Analyses ‘grants-like’ schemes that fall outside of the CGRGs but that may benefit from adopting the principles of these guidelines. This includes funding by Corporate Commonwealth entities and awards to States and Territories under Commonwealth partnerships.
1.9Chapter 3 assesses the grants hubs, including their operation and the efficiencies/benefits that they provide in centralising grants expertise and capability.