$1 billion in regional grants, but do they do anything?

By David Donaldson

May 3, 2019

Regional areas across Australia face challenges keeping their economies afloat as the country becomes increasingly urbanised.

Pumping money into rural communities to shore up local communities — and, ahem, votes — is popular with some, but whether it has long-term benefits is another question.

Since 2011, Regional Development Victoria has administered over $1 billion in grants to boost regional areas, but it is unclear whether they have made any difference, says Auditor General Andrew Greaves.

“RDV still cannot reliably determine whether their grants have improved economic or social outcomes directly or indirectly, or whether any benefits have been sustained beyond the immediate injection of funds into a community,” argues a report released by the Victorian Auditor General’s Office on Thursday.

One of the problems is a lack of evaluation. The agency has previously engaged consultants to evaluate its grants, but they were unable to complete the job due to inconsistencies between objectives and implementation, a lack of targets and measures, poor data quality, and challenges attributing change in social and economic indicators to the grant programs.

Regional Development Victoria also cannot prove it has managed the Regional Jobs and Infrastructure Fund’s administration costs in line with state guidance, says VAGO, and cannot support its claim that it complies with the Treasury and Finance guideline that agencies keep administration costs below 5%.

But VAGO notes progress has been made on previous audits, “which was necessary given the serious issues identified in our two prior audits”.

To do so, Regional Development Victoria has “improved its organisational culture, increased its focus on program monitoring and better promoted the fund to intended applicants”, says the auditor.

However, problems continue, including that RDV struggles to assess grants promptly, in part because it has not adopted a risk‑based approach to grant assessment, and the Regional Jobs and Infrastructure Fund’s evaluation framework has incomplete measures and targets and lacks a full program logic model and data plan.

The Department of Jobs, Precincts and Regions — of which RDV is a statutory authority — accepted all seven of the auditor’s recommendations.

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