Federal grant money often awarded in closed process, auditor-general finds

By Jackson Graham

October 20, 2021

(Lane Erickson/Adobe)

A majority of federal grants by value in the past three years were decided through a closed, non-competitive process, according to an auditor-general report. 

The Australian National Audit Office report also found that more than a quarter of regional-development grant funding was delivered to postcodes in major cities, although the government argues this wasn’t necessarily where money was spent. 

The GrantConnect report information released on Tuesday looked at 108,206 federal grants awarded between 2018 and June this year with a total value of $60.2 billion. 

It found a closed, non-competitive process used in 42% of applications by value, with the method primarily used in 2017-18 and increasing in 2018-19 before then becoming less frequent in the past two years. 

The method assesses applications for a grant against selection criteria rather than against other applicants’ submissions.

The government’s grant rules and guidelines state that “competitive, merit-based processes should be used to allocate grants based upon clearly defined criteria, unless specifically agreed otherwise by a minister, accountable authority or delegate”. 

Source: Auditor-general report

“Where a method other than a competitive merit-based selection process is planned to be used, officials should document why a different approach will be used,” the guidelines say.

The report found 27% of the total regional development grant spending went to Australian postcodes classified as ‘major cities’, while 60% went to inner and outer regional areas and 8% went to postcodes considered remote or very remote. 

Finance minister Simon Birmingham said in a statement to The Mandarin that grants were critical “to support Australians and deliver essential services to local communities”. 

“Many grant applicants are organisations with a statewide or national presence and therefore they may lodge grant applications using a capital city address,” he said.  

“This does not necessarily reflect where the work and community benefit will occur.

Meanwhile, the biggest value of awards went to applications for ‘ageing’ and also ‘health, wellbeing and medical research’, closely followed by applications for ‘Indigenous’ funding. 

The Department of Health, the Department of Infrastructure, Transport, Regional Development and Communications and the Department of Education, Skills and Employment administered the biggest value of grants. 

Grant recipients that were Australian publicly listed companies received the highest value in total grants, closely followed by ‘other incorporated entities’, Australian private companies and local governments. 

The audit office in June slammed the government for its administration of a $660 million national car park fund, finding the federal Infrastructure department’s approach to selecting projects for funding ‘was not designed to be open or transparent’.

The office noted that 70% of the projects were announced during the 2019 federal election caretaker period, with 27 car park sites selected the day before the government entered caretaker mode.

In a 2020 report, the office found the federal government used grants from a sports infrastructure program to target key electorates in the months leading up to the 2019 election.


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