Troubled grants hubs are set for a revamp

The ANAO made three recommendations for improvements:

• better methods for reporting on performance
• a new plan for the operation of grants hubs
• the creation of a whole-of-government grants administration and payments dataset.

The Finance Department has rolled out a new “benefits measurement plan” to better keep track of the system and is now working on a “second pass” business case to be pitched to the government after June 2025, a decade after the program was first established.

In a recent statement to the Joint Committee of Public Accounts and Audit (JCPAA), Finance Department secretary Jenny Wilkinson said the government had completed the first of the recommendations with a “benefits measurement plan to measure and report on performance of the grants administration system” and the Finance Department would now “explore modernisation of Commonwealth grants administration through a Second Pass Business Case”.

The new business case would look at “pathways for a common technology approach, improvements to whole-of-government grants datasets, and a future plan for the operation of the grants hubs,” she said.

The developments follow a March 2022 ANAO probe that found that the grants hubs, which were supposed to be one-stop shops for the dozen largest federal granting entities, were “not effective”.

The hubs were central to the Streamlining Government Grants Administration (SGGA) Program introduced in 2015 “to deliver simpler, more consistent and efficient grants administration across government”.

The push for efficiency comes on the back of the federal government’s spending of an estimated $35 billion each year on grants, and about $350 million on the cost of administration and technology.

The government spent nearly $107 million establishing the new system, which was supposed to deliver $400 million in savings and efficiencies, yet largely failed to achieve those objectives.

The scathing ANAO audit found there was “insufficient evidence to demonstrate the … program improved the effective and efficient delivery of grants administration”. It found that “core deliverables were not achieved”, the design and governance of the program was ineffective, and its poor design and operation stifled intended benefits, such as better outcomes for grant applicants and recipients, a reduction in red tape, and efficiencies for government.