Audit Finds $443M Government Grant Process ‘Insufficient’

Australian charity leaders say the $443 million government grant to the Great Barrier Reef Foundation is a slap in the face for every charity applying for government funding, after an audit report found the government applied insufficient scrutiny to the grant proposal.

The Australian National Audit Office report criticised the environment department for key shortcomings in their decision to approve grant funding, including a lack of clear targets for the charity, and a failure to properly assess whether the proposal showed value for money.

The audit also said the department did not introduce competition into the grant giving process and that “reasons for not employing a competitive, merit-based selection process to identify the partner were not documented”.

It took the department only three days to decide that the Great Barrier Reef Foundation (GBRF) was the preferred partner.

New tabled performance audit report: Award of a $443.3 Million Grant to the Great Barrier Reef Foundation (@envirogov) https://t.co/5ZCp5pe80X pic.twitter.com/vPIHnBnjpR

— Audit Office (ANAO) (@ANAO_Australia) January 16, 2019

Community Council for Australia CEO David Crosbie told Pro Bono News this scenario contrasted with the often long and demanding process Australian charities seeking government funding had to go through.

“If $440 million can be allocated to an unsuspecting charity within three days, why is every other grant giving process made so onerous for charities?” Crosbie said.

“The grant to the Great Barrier Reef Foundation is a slap in the face for every charity that suffers through the usual tedious complexity of applying for a government grant.”

Crosbie said at best, the grant to the GBRF did not comply with the fundamental requirements of government grant giving.

“This process highlights that there are effectively no limits if a government minister decides they need to quickly give a favoured organisation a whole lot of money. This is not good government policy or good government practice,” he said.

Australian Conservation Foundation CEO Kelly O’Shanassy agreed with Crosbie, and said while the environment department had some shortcomings, the government was also to blame for only giving officials just 11 days to make a decision.

“That doesn’t sound like a very good process to me,” O’Shanassy told Pro Bono News.

“To actually approach a charity that didn’t ask for the money and say ‘we want to give you a half a billion dollars’ is a slap in the face of many charities in Australia, including environmental groups because funding for their work has been slashed.”

The $443 million grant originally came under scrutiny during Senate Estimates in May last year, after it emerged there had been no tender or application process for the grant.

In August, a Senate inquiry investigated why the foundation, which had just six members at the time, was awarded the funding in the first place, and whether it had the means to undertake the government’s 2050 reef plan.

The audit report recommended the environment department develop overarching Reef Trust proposal guidelines to improve transparency and access to funding for future grants.

It also said the department should include clear assessment criteria for any grant proposals that were being considered through non-competitive processes.

O’Shanassy said these recommendations were welcomed, but noted an overarching issue was the level of political interference in the grant-making process.

“The short-term framing that politicians often have on long-term environmental issues is skewing decisions and really not letting the government department do their job because they have to report to the relevant minister,” she said.

“They are really trapped in that political cycle. So we need greater independent scrutiny of government decisions and I think that’s another key learning.”

Despite the criticism contained in the audit report, Environment Minister Melissa Price welcomed ANAO’s findings that all minister decisions were informed by department advice.

“None of the findings or recommendations affect the conclusion that the partnership is an effective way to boost the health of the reef,” Price said.

The GBRF responded to the report in a statement – refuting ANAO’s claim that the total administration costs of the partnership could be up to $86 million, as they said that figure wrongly assumed all subcontractors would be granted a 10 per cent budget for administration.

Remember when the minister claimed only 5% of the gift to the reef foundation could be spent on administration? Today the ANAO revealed the true figure: $86 million on administration!#reefgate #anao #auspol #greatbarrierreef #gbr pic.twitter.com/OuOnWmxlsX

— Tony Burke (@Tony_Burke) January 16, 2019

The foundation’s managing director Anna Marsden said the GBRF was focused on fulfilling the obligations of the partnership by protecting the reef and putting taxpayer funds to good use.

“Work progressing under the Reef Trust Partnership with the Australian government complements our existing projects and our 18 year track record of bringing together the best minds and technologies to help solve the challenges facing the Great Barrier Reef,” Marsden said.