National grants spending under the microscope

The audit of Commonwealth grants spending tracks money spent over the four financial years to June 2025.

The Australian National Audit Office (ANAO) review assesses spending recorded on the GrantConnect system, which federal agencies are required to use.

The purpose of the audit is “to provide transparency of, and insights on, government grants expenses and Commonwealth entities’ self-reporting of grants on GrantConnect, for the past four years from 2021–22 to 2024–25”.

Commonwealth grants spending comprises about 30 per cent of the total estimated $125 billion annual distribution of grants in Australia, a SmartyGrants analysis suggests.

The total annual value of federal grants distributed at last count (2023–24) was $38.5 billion, although the figure varied considerably during the covid-19 pandemic.

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Performance reports lack impact

The national auditor has found that many federal entities are not clearly demonstrating the impact of their work.

The finding comes from an analysis of the performance statements of 21 Commonwealth entities in 2024–25, covering about 85 per cent of government spending, or $858 billion.

In a report published last month, the Australian National Audit Office (ANAO) – which is led by Dr Caralee McLiesh – found that while organisations largely met the requirements of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), their performance statements often failed to show whether their intended outcomes were achieved.

“Many entities continue to primarily report what was done rather than showing what was achieved,” the report states.

The report said the need for better outcomes reporting came at a crucial point for government agencies.

“The coming years will continue to be challenging for the public sector as it continues to be asked to do more, with less, for more people, in an increasingly complex and risky environment. It is important that entities can be assessed not just on what they spend, but on the difference they make. Ensuring that entities align their performance with long-term outcomes that matter most to the community and decision-makers is crucial.”

The report suggested better performance statements should help others understand “the results achieved, the impact the entity is having and the progress it is making”.

The report acknowledged that the “nature and complexity” of many government programs can make aspects of performance hard to measure and that those measures would need expertise and time to develop.

For example, measuring efficiency and value for money, and whether key activities were delivering “intended results and producing meaningful change”, was difficult, it said.

The ANAO’s study suggested organisations could take steps to improve published information, “even when perfect measurement is not possible” by employing “a mix of measures and supplementing quantitative measures with qualitative information, such as case studies, and insightful narrative and analysis”.

The ANAO recommended including performance statements in annual reports and suggested the Commonwealth Performance Framework guidance could be improved.

It said the framework’s guidance could suggest that reports include details of purposes and key activities, appropriate performance measures and targets, and “clear, comprehensive and insightful narrative and analysis”.

Read the full ANAO report

Defence spending under the gun

The federal audit office is finalising its report into a key defence grants program.

The ANAO is expected to next month report its findings on the Skilling Australia’s Defence Industry grants program.

The study will assess whether the program has met Commonwealth rules and guidelines, including whether funding was well designed and backed by good administrative arrangements, whether applications were properly assessed, whether funding decisions were well-informed, and whether evaluations were properly performed.

Possible probe of emergency accommodation program

The ANAO has flagged a possible audit of the Safe Places emergency accommodation program.

The Safe Places capital works program funds the building, renovation and purchase of emergency accommodation for women and children experiencing family and domestic violence.

To date, the federal government has committed more than $170 million over seven years in a national program to reduce family violence. The government has aimed to improve access for women and children who are affected by disabilities, from First Nations groups, or from CALD backgrounds.