PM&C boss defends sports rorts investigation, rejects ANAO findings

By Shannon Jenkins

February 17, 2020

Philip Gaetjens
Philip Gaetjens. (AAP Image/Lukas Coch)

The head of the Australian Public Service has spoken out to justify his investigation into the former sports minister Bridget McKenzie’s handling of a Commonwealth sports grants scheme.

In his submission to the Senate inquiry into the grants program, Department of the Prime Minister and Cabinet secretary Phil Gaetjens argued that McKenzie had “acted within the remit of the guidelines”, but there were “significant shortcomings” in regards to her decisionmaking role, and the administration of the assessment process by Sport Australia.

“Key among these were the lack of transparency for applicants around the other factors being considered, and the disconnect between the assessment process run by Sport Australia and the assessment and decisionmaking process in the minister’s office. This lack of transparency, coupled with the significant divergences between projects recommended by Sport Australia and those approved by the minister have given rise to concerns about the funding decision making,” he wrote.

“The discrepancy between the number of applications recommended by Sport Australia and the final list of approved applications clearly shows the minister’s office undertook a separate and non-transparent process in addition to the assessment by Sport Australia.”

He said his findings were based on information provided to him including a spreadsheet colour-coded by electorate and party from November 2018, the tables of recommendations as assessed by Sport Australia, and McKenzie’s final approvals.

The top mandarin said McKenzie had told him that her final approvals were “intended to ensure a fair spread of grants according to state, region, party, funding stream and sport, in addition to the criteria assessed by Sport Australia”. Further, he argued there was “persuasive data” that showed McKenzie’s decisions to approve grants were not based on marginal and targeted electorates, in direct contrast to the recent findings of national auditor-general Grant Hehir.

The persuasive data, according to Gaetjens, was the “significant period of time” between the November spreadsheet and the dates of the final approval processes — December 11-21 2018, February 5 2019, and April 3 2019.

“Secondly, 30% of the applications listed as ‘successful’ in the adviser’s spreadsheet were not approved for funding in any of the three grant rounds,” he added.

“So, on the evidence available to me, there is a material divergence between actual outcomes of all funded projects and the approach identified in the adviser’s spreadsheet. This does not accord with the ANAO report … I did not find evidence that the separate funding approval process conducted in the Minister’s office was unduly influenced by reference to ‘marginal’ or ‘targeted’ electorates.

“In terms of the comparison between those applications recommended by Sport Australia over the three funding rounds and those approved by the minister, 180 ‘marginal’ and ‘targeted’ projects were recommended by Sport Australia, and 229 were ultimately approved by the minister, representing a 27% increase. This is smaller than the percentage increase of projects recommended (325) to projects funded (451) in non-marginal or non-targeted seats which was 39%.”

The secretary argued the spreadsheet had been developed by one of McKenzie’s staff members, “to support an increase in funding for the program”, but McKenzie had never seen the spreadsheet.

“Her chief of staff also told the Department of the Prime Minister and Cabinet that the adviser had categorically stated she had not shown the spreadsheet to the minister,” he stated.

He noted that while he disagreed with “the suggestion that political considerations were the primary determining factor in the minister’s decisions to approve the grants”, he had, however, found that McKenzie had breached standards by failing to declare her memberships of two organisations when awarding funding to one of those organisations: the Wangaratta Clay Target Club. This was the factor which has resulted in McKenzie losing her job.

Gaetjens was tasked with investigating the minister’s handling of the scheme last month. The outcome of the report — which has not been released despite calls from Labor, the Greens, and the crossbench — has been widely criticised for letting the government “off a political hook”.

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