Background of the review
Government grants are among a number of options available to the Australian Government in administering Commonwealth programs. Commonwealth departments and agencies commonly use grants as a means to enact policy and carry out program functions by providing money to external parties to fund projects.
The Commonwealth Grants Rules and Guidelines 2017 (CGRGs) provide a description of the use of grants:
Grants are widely used to achieve government policy outcomes which support our Nation’s jobs, growth and innovation. The Australian Government provides grants to a wide number of stakeholders for the benefit of all Australians. Each year billions of dollars’ worth of grants benefit the public including through:
increased social services;
expanded opportunities for businesses;
Accordingly, grants administration comprises a significant portion of the Australian Government’s operations and expenditure within departments and agencies.
The ANAO regularly conducts audits on specific grants programs and grants administration in general. The Joint Committee of Public Accounts and Audit (the Committee) of the 44th Parliament inquired into the administration of government grants in relation to other entities and grant programs.
About the inquiry
Objectives and scope
On 27 November 2019, the Committee resolved to undertake the inquiry into Auditor-General’s Report 5 of 2019-20: Australian Research Council’s Administration of the National Competitive Grants Program (Report 5) and Auditor-General’s Report 12 of 2019-20: Award of Funding under the Regional Jobs and Investment Packages (Report 12).
On 12 February 2020, the Committee further resolved to include Auditor-General’s Report 23: Award of Funding under the Community Sport Infrastructure Program (Report 23) in its inquiry (which had been tabled after the original establishment of the inquiry).
These Auditor-General’s reports were selected for review in order to examine the administration of government grants, focusing on aspects such as corporate governance, program delivery, and adherence to Commonwealth guidelines.
In a small number of cases, names and responsibilities of agencies reviewed have changed following machinery of government changes. This report refers to the agencies as they were at the time of audit. As far as possible, the Committee has addressed recommendations to the current arrangements of agencies.
On 2 December 2019, the Committee issued a media release announcing the inquiry, inviting submissions to be received by 30 January 2020. The Committee also invited submissions from the agencies included in the reports considered. The inquiry received 12 submissions, which are listed at Appendix A.
A public hearing was held on 7 February 2020, which examined Reports 5 and 12. A second public hearing was held on 28 February 2020, which further examined Report 12. A third public hearing was held on 3 July 2020, which examined Report 23. A list of witnesses and organisations that appeared at public hearings is at Appendix B.
Chapter 2 examines the Australian Government’s grants administration framework, and discusses the legislative framework, reporting mechanisms, and issues identified by stakeholders currently impacting on the framework.
Chapter 3 discusses Auditor-General’s Report 5, which examines the Australian Research Council’s management of the National Competitive Grants Program.
Chapter 4 discusses Auditor-General’s Report 12, which examines the management of the Regional Jobs and Investment Packages grants program, jointly administered by the Department of Infrastructure, Transport, Cities and Regional Development and the Department of Industry, Innovation and Science.
Chapter 5 discusses Auditor-General’s Report 23, which examines the management of the Community Sports Infrastructure Grants Program, managed by the Australian Sports Commission.
Responses to Auditor-General’s Reports
Recommendations made by the ANAO in Report No. 5, 12 and 23 (2019-20) were broadly agreed to by respective agencies and departments.
The Australian Research Council agreed to all three of the ANAO’s recommendations in Report 5 and was pleased that the ANAO found that the administration of the National Competitive Grants was effective.
The Department of Infrastructure, Transport, Cities and Regional Development agreed to all three of the ANAO’s recommendations in Report 12 and, in their response to the ANAO, advised that they had commissioned a further review of the Regional Jobs and Infrastructure Program, which included recommendations regarding achieving greater assurance of the Business Grant Hub’s merit assessments and better managing the department’s recommendations process.
Sport Australia agreed to the three recommendations directed to their administration of the Community Sport Infrastructure Program in Report 23, with the Department of Finance noting the fourth recommendation relating to the Australian Government’s grants administration framework, because it was a policy decision for the Government. The Department of Finance has since advised that the Prime Minister had announced that the Australian Government would be acting on the ANAO’s recommendation, with a view to implementation by the end of the year. This is now reflected in the Public Governance, Performance and Accountability Amendment (Grant Rules for Corporate Commonwealth Entities) Rules 2020.