Almost half of federal grants programs worth $118 billion are lacking: auditor

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.