Federal figures reveal how grants funding flows

Recently the Australian National Audit Office (ANAO) published its first analysis of more than 100,000 separate grants worth $60.2 billion over three and a half years.

The funds were reported via the federal funding clearinghouse GrantConnect, which centralised mandatory reporting on the platform from December 2017. The ANAO’s study is the first report resulting from the requirement.

Commonwealth grantmakers have posted 108,206 grants on the GrantConnect site, representing 3% of all federal expenses in that time.

The audit has raised eyebrows with its revelations that in the 3.5 years since the tracking began:

• 42% of grants (by value) worth about $25 billion were awarded through a closed, non-competitive process, while 20% were distributed in an open competitive process
• In 2018–2019, a federal election year, the value of closed non-competitive grants spiked, and such grants comprised 61% of grants by value
• 27% of regional development grants worth $624 million were issued to postcodes in major cities, while just 8% went to remote or very remote areas
• The biggest splurge in grants spending coincided with the last federal election
• Selected recipients received hundreds of millions in grants, with the highest single grant worth $488 million.

Those issues drew criticism, particularly from the Labor Opposition, via reports in the ABC, The Guardian and The Australian, and follow a series of damning reports by the ANAO about other grant programs.

The latest report does not critique GrantConnect or issue recommendations. Instead, the report’s stated aim is “transparency” and insight about government grants spending, grantmaking activity, administration, expenses and recipients.

The report is a treasure trove for those seeking to understand who wins grants and how much they’ve won from the government. It’s also a valuable tool for anyone wanting to identify and avoid inconsistencies and discrepancies in their own grants programs.

Some of the figures prove hard to nail down, with the total grant spend varying by up to $1.5 billion a year depending on the counting method.

For example, the figures reveal that in the GrantsConnect reporting period the Commonwealth allocated $14.7 billion in grant funds in the 2020–21 financial year, dropping significantly from a high of $22.6 billion in 2018–19 (just before the last election) and nearly $2 billion lower than in 2019–20 when $16.5 billion was distributed.

On the other hand, expenses for grants, which are drawn from the Commonwealth’s consolidated financial statements (CFS) and other published reports, showed grants spending rising from $15.4 billion in 2017–18 to $16.9 billion in 2018–19, and $18.1 billion in 2019–20.

That’s a $5.7 billion difference between the GrantConnect and CFS figures for 2018–19 year, which the ANAO explained was partly a result of how grants were defined and different methods of aggregating spending. Not all Commonwealth entities are required to report using GrantConnect, which could also help explain the variation, and it seems likely that the figures will be more closely reconciled as more agencies are required to report via GrantConnect.

So far, 33 Commonwealth bodies are required to report to GrantConnect, but that number looks set to increase, with all agencies in which a minister is the final arbiter now required to use the portal following ANAO recommendations.

There are currently 187 Commonwealth bodies affected by the policy framework for grants administration under the Public Governance, Performance and Accountability (PGPA )Act and the Commonwealth Grants Rules and Guidelines (CGRGs).

Other significant trends highlighted by the study included these:

• Ad hoc or one-off grants were the most numerous over the total reporting period, comprising 24% of all grants. By value, they peaked at 43% of all grants in 2020–21.
• $3.7 billion in covid-19 grants were issued between March 2020 and June 2021, with the top three recipient groups being local government; ageing; and health, wellbeing and medical research
• 19% of the total value of grants were a result of variations worth $11.3 billion
• 12% of open, competitive grants were approved before their closing date
• There were 7705 grants where selection criteria changed partway through the process
• There is an annual spike in the value of grants approved each March, while approvals for one-off/ad hoc grants rise dramatically each May as departments rush to spend funds before the end of the financial year.

The ANAO also revealed the biggest winners from grants, with figures showing:

• The areas allocated the most grants by value were:
  • ageing ($11.9 billion or 20%)
  • health, wellbeing and medical research ($10.4 billion or 18%)
  • Indigenous ($8.6 billion or 14%)
• The most grants by number went to ageing, children and youth, and disaster relief
• The Health Department dominated grants spending, with four programs listed in the top 10 programs, awarding $24.7 billion in the reporting period
• Other top government spenders included the Department of Infrastructure, Transport, Regional Development and Communications ($7.7 billion); the Department of Education, Skills and Employment ($4.7 billion); the Department of Social Services ($4.3 billion) and the Department of Prime Minister and Cabinet ($2.7 billion)
• Private sector organisations take the lion’s share of grants, attracting 58 per cent of funds; in comparison, not-for-profits received 35% of grants by value
• The biggest single grant was for $488 million to the Great Barrier Reef Foundation, which was subject to an ANAO audit
• The biggest grant variation was for a grant to Ku Children’s Services, which won a closed non-competitive grant worth $468.1 million, up from an initial value of $93.8 million
• Melbourne University was the top grant recipient, receiving more than $1 billion in grants from 1009 successful applications across 19 categories. Universities overall made up half the top 10.

For readers wanting to look at the figures in more depth, GrantConnect allows users to download detailed data on up to 50,000 records at a time, with the ability to search by selection process, value, currency, agency, date, category and more. The data reveals key information about recipients and how much they were paid along with the associated ABN, program name, activity and key dates.

The release of the latest ANAO report comes soon after the federal grants watchdog flagged a move to watch for unethical behaviour and better record keeping.

The audit office has issued a series of critical reports into grants program since 2019, including:

• the Commuter Car Parks program within the Urban Congestion Fund
• the Community Sport Infrastructure program
• the Regional Jobs and Investment Packages
• the Australian Research Council’s National Competitive Grants program
• the $443 million grant to the Great Barrier Reef Foundation.

Its investigation into the Safer Communities program is continuing, with the report expected to be tabled in February 2022.