Almost half of federal grants programs worth $118 billion are lacking: auditor
Posted on 24 Jul 2024
By Matthew Schulz, journalist, SmartyGrants
Australia’s top grants watchdog has released a detailed dossier of audits from the past four years with an urgent call to grantmakers to follow proper grants processes.
The Australian National Audit Office (ANAO) recently published Audit Lessons Insights: Grants Administration on its website following a series of damning reports on problematic programs.
The guidance seeks to share the lessons of ANAO audits with grantmakers and those overseeing grants programs. The federal government and its agencies distribute a huge volume of grants, handing out more than $118.1 billion between December 2017 and June 2024.
The ANAO found that none of the 16 grants programs it audited in the four financial years from 2020 to 2024 were “fully effective”. Instead, it found that:
- 19% were not effective
- 25% were partly effective
- 56% were largely effective.
Among the cases it highlighted – some of them worth billions of dollars – were:
- Wildlife and Habitat Bushfire Recovery Programs
- Award of Funding under the Building Better Regions Fund
- Community Health and Hospitals Program
- Children and Schooling Program and Safety Wellbeing Program
- Community Health and Hospitals Program
- Regional Jobs and Investment Packages
- Supporting Reliable Energy Infrastructure Program
- Children and Schooling Program and Safety and Wellbeing Program.
The ANAO said it had issued 57 recommendations for those programs alone, with the highest incidence of problems affecting grant assessments, design and planning, advice to decision makers, performance measurement, monitoring and assurance, and grant guidelines.
In all there are eight main lessons for grants administrators.
These include a recommendation that grants should be competitive “unless otherwise agreed”, a powerful pushback against the $45.5 billion in non-competitive grants awarded over the assessment period.
The publication draws heavily on the existing Commonwealth Grants Rules and Guidelines (CGRG) 2017, which grantmakers and their masters are supposed to use when administering grants.
In the case of the $220 million Regional Jobs and Investment Package audited in 2019, the ANAO found that grants assessment was not carried out to the standard outlined by the federal grants administration framework.
It found that the program lacked appropriate checks and controls for eligibility and merit assessment, records of eligibility checking were incomplete, and applications contained inconsistencies, lacked scrutiny and in many cases were incorrectly scored.
The ANAO says good grants administration comprises:
- robust planning and design
- collaboration and partnership
- proportionality
- an outcomes orientation
- the achievement of value for money
- governance and accountability
- probity and transparency.
The publication outlines best practices for each criterion and gives examples of failures identified in its audits.
SmartyGrants executive director Kathy Richardson welcomed the report.
“This is a terrific initiative from the Audit Office that highlights that many grantmakers still have a long way to go in complying with public expectations and standards.
“Grantmaking is often described as ‘part art, part science’ but there’s no great mystery to how to do grantmaking well – when subject matter expertise is combined with good planning and solid processes, grants can help government achieve policy goals while safeguarding precious taxpayer funds.
“Guidelines like the CGRGs, the NSW Grants Administration Guide, and our own Grantmaking Toolkit exist to help grantmakers put good grantmaking principles into action.”
"Our Outcomes Engine also aims to raise the bar when it comes to evaluation excellence and consistency."
The latest study builds on previous studies including:
- a damning federal parliamentary report on Commonwealth grants administration, tabled in June 2023
- a 2021 report on Commonwealth entities reporting on GrantConnect
- a 2020 report about managing conflicts of interest in procurement and grants programs.