Defence failed to comply with grants guidelines and rules: internal audit

By Jackson Graham

February 9, 2022

Defence minister Peter Dutton.
Defence minister Peter Dutton. (AAP Image/Mick Tsikas)

Australia’s Defence Department has been failing to comply with federal grants guidelines and rules, an internal audit shows. 

The audit, first reported by the ABC, found breaches of the Commonwealth Grants Rules and Guidelines in all seven grants it examined in a report finalised in June 2020. 

“The root cause of this appears to be grant managers not understanding the expected standards and/or a perceived absence of any accountability for their actions or lack thereof,” the audit says. 

The total value of the seven grants audited was more than $1.7 million, and included ad-hoc grants and grants requiring ministerial approval. 

The report notes that conflict-of-interest records and documenting risks for the recipient and the department were not included in the process or given to the auditor. 

Approval documents, including ministerial briefs, were also either not provided to the auditor or were insufficient for meeting the federal rules and guidelines, the audit says. 

Reporting on GrantConnect, the Australian government’s grants-information system, was found to be non-compliant with the 21-day publication requirement. 

“Four of the seven approved grants have not been published on GrantConnect, whilst the remaining three were published more than 40 days later than required,” the audit found. 

The department commissioned PwC to review the management of defence grants in 2019, leading to a new grants-management framework. 

The auditors also found in their audit that this framework had the potential to address the issues identified.

“To complement evaluation activities proposed within the framework, the audit recommends that grants-management areas be required to undertake an annual self-assessment of their compliance against the grants-management framework and report any non-compliance,” the auditors wrote. 

“This control would assist in removing any perceived absence of accountability and would help inform future audits.”

The audit notes the breaches were in general administration and it did not uncover serious wrongdoing. 


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