Most funding from key Indigenous Advancement Strategy programs allocated on a non-competitive basis, audit finds

By Shannon Jenkins

Tuesday September 29, 2020

Ken Wyatt
Minister for Indigenous Australians Ken Wyatt (AAP Image/Mick Tsikas)

The National Indigenous Australians Agency’s administration of two key Indigenous Advancement Strategy programs has been “largely effective”, but improvements in achieving value for money and communication are needed, the Australian National Audit Office has found.

ANAO’s latest audit report assessed the effectiveness of the Department of the Prime Minister and Cabinet’s and NIAA’s handling of the Children and Schooling and the Safety and Wellbeing grant programs.

Both programs aim to improve outcomes for Indigenous Australians, and received budgets of $305.04 million and $279.88 million respectively in 2019–20.

Past ANAO performance audits, parliamentary inquiries and departmental reviews have identified shortcomings in the administration of the Indigenous Advancement Strategy (IAS), ANAO noted. One report stated the “grant’s administration processes fell short of the standard required to effectively manage a billion dollars of commonwealth resources”.

The latest audit found NIAA’s administration of the two IAS programs has been “largely effective” but highlighted a range of issues that need to be addressed.

Achievement of value for money not demonstrated

The audit found that while the IAS Grant Guidelines are compliant with the Commonwealth Grants Rules and Guidelines (CGRGs) for both of the programs, they aren’t in line with Department of Finance rules.

“NIAA’s communication about the programs’ funding availability is not transparent, which is inconsistent with Department of Finance guidance,” the report said.

Further, assessments “are not consistent with the principles underlying the CGRGs to achieve value with relevant money”. The report noted that between July 2016 and June 2019, 90% of the Children and Schooling program funding and 95% of the Safety and Wellbeing program funding was allocated on a non-competitive basis, which goes against the principles of the CGRGs and with NIAA’s guidance.

“The CGRGs specify that using a non-competitive approach to allocate grant funding may be appropriate, in particular when the number of service providers is very limited and these providers have a well-established record of delivering the grant activities,” it said.

“However, the CGRGs also state that competitive, merit-based processes can achieve better outcomes and value with relevant money and should be used to allocate grants (unless otherwise agreed).”

Meanwhile, 80% of the Children and Schooling program funding and 87% of the Safety and Wellbeing program funding was reallocated to the same providers after assessment.

ANAO said PM&C’s reasons for recommending a non-competitive direct approach included that the provider was experienced, had relationships with key stakeholders, was interested in continuing service provision, was low risk, and was the “only known provider able to deliver the activities at the time”.

Read more: A case study in creative funding arrangements: how the Indigenous Advancement Strategy grant program can be used to hand out money in a needlessly convoluted and opaque way

However, a number of changes made since 2019 have allowed the management of grants to be “largely consistent” with the guidelines, and “have the potential to improve the effectiveness of NIAA’s management of grants”, ANAO said. These include a new grant risk management framework and revised key performance indicators.

Despite the improvements, ANAO found that “NIAA does not sufficiently validate self-reported provider data”, record-keeping practices have remained poor, and there have been issues with performance assessment and management.

“Performance information for the two programs is not fully appropriate and comprehensive information generated from processes to collect lessons learnt is not yet sufficiently integrated to effectively inform administration of the two programs,” it said.

In regards to governance arrangements, two key governance boards (Executive and Program Management) didn’t meet as often as planned during 2018 and 2019, but they have “provided strategic and operational direction” to the two programs. ANAO noted that mandatory grants administration training was still in the pilot stage in April 2020.

The report made a number of recommendations to NIAA regarding reporting, value for money, compliance and performance measures. NIAA has welcomed the findings.

“We will continue to work with communities to address their priorities. We will also continue working with service providers to minimise their administrative burden in line with the CGRGs and focus on achieving government policy objectives for Aboriginal and Torres Strait Islander peoples,” it said.

“The agency has agreed to all of the report’s recommendations, noting that at the time of the audit a number of actions to address these were in place, had already been taken or were underway to make improvements consistent with the recommendations.”

Read more: Development of a whole-of-government Indigenous Evaluation Strategy is underway


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