Commonwealth auditor flags detailed dive into grants reporting

The federal government distributed $38.5 billion in grants in the 2023–24 financial year.

The last ANAO review of Commonwealth grants reporting resulted in the first comprehensive report aimed at boosting transparency and insights.

The review examined the 108,206 grant awards published on the GrantConnect website, the mandatory clearinghouse for federal grants. It revealed:

• 42% of grants (by value) were awarded through a non-competitive process
• 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 a federal election
• an annual spike in grants approvals between March and May as departments rushed to spend funds before the end of the financial year
• the highest single grant was $488 million.

At the time of the earlier report, just 33 federal bodies were required to report to GrantConnect. That number is expected to rise significantly with 187 bodies affected by new policy affecting grant reporting.

Multiple programs may come under the microscope

Other potential ANAO audits listed in the draft work program are:

• grants administered by the Education Department, with an examination of the effectiveness of “a selection” of grant programs
• the Safe Places Emergency Accommodation program, which has committed more than $170 million to provide emergency accommodation for women and children experiencing domestic violence
• the design and implementation of the $118 million Modernised Multicultural Grants Program
• effectiveness of the Business Grants Hub, which distributed $1.95 billion in 2023–24
• the Priority Community Infrastructure and Investing in our Communities programs
• the award of funding under the Future Drought Fund, which allocates $100 million a year to support drought resilience

The ANAO is expected to publish its formal workplan after reviewing the feedback on its proposals.

Scrutiny of $1 billion disaster fund

The ANAO is expected to release its report into Australia’s $1 billion Disaster Ready Fund later this month.

Established in November 2022, the fund was the result of a government commitment to creating a dedicated fund for disaster resilience and risk reduction, and to helping the country manage the physical, social and economic impacts of disasters caused by climate change and other natural hazards.

Since July 2023, the fund has funnelled up to $200 million each financial year into projects across all states and territories. Funding has been allocated to all levels of government, but “lead agencies” acted as the main applicants.

The first round of funding distributed money to 187 projects in a “closed competitive” round, limited to state and territory governments.

Defence spending in the ANAO’s sights

The ANAO is also midway through an audit of the nation’s defence industry grants program. A report was report expected to be released in June, but the auditor this month announced it would continue taking submissions until September.

The program allocated $170 million over four years starting in 2024 to bolster small and medium-sized businesses working in the defence sector.

The audit will examine whether:

• funding rounds were well designed and administered
• grant guidelines were informed by sound advice
• monitoring, reporting and evaluation processes were done well.

More information

• New grants rules aim to stop rorts
• Inquiry sought into $1.35b Labor-linked grants
• Troubled grants hubs are set for a revamp