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payments exceeding 15 per cent of their project’s total budget and the set
limit.
144
These payments ranged from 16 to 30 per cent of the project’s total budget,
and resulted in payments above the threshold of up to 37 250. Evidence
was not retained by the department to indicate why some grant recipients
received a higher up‐front payment.
6.52 While
the department did not set limits for the remaining funding rounds,
the ANAO noted that, in the sample reviewed, the up‐front payment was
generally lower than Round 1 payments, with initial payments in the range
of five to seven per cent of the total granted funding. An additional payment
linked to the department’s acceptance of the project MERI plan was also
provided shortly after the initial payment for later rounds.
Progress payments
6.53 In
general, progress payments were required to be made once Environment
had accepted relevant reports from the grant recipient. The ANAO
examined whether all milestones as set out in the funding agreements had
been met, including evidence to indicate that the department had reviewed
and accepted relevant reports, prior to payments being made for one
set of mid‐year and annual payments for Round 1.
6.54 In
relation to the mid‐year payments, the milestone requirements had generally
been met prior to payment being authorised.
145
In relation to the annual
payments, the ANAO’s analysis indicated that in 20 of the 64 sampled cases
around 31 per cent payments had been authorised despite not all milestones
being met. These milestones were mostly in relation to the recipients’
in‐kind contributions not being made in accordance with the agreed budget
plan. In the NATI round and Round 2, payments had not been made prior
to relevant milestones being completed.
6.55 Under
the funding agreements, Environment can withhold payments in
cases of under‐performance, or because the project is behind schedule and the
grant recipient has not expended previous milestone payments. However, in
the projects reviewed by the ANAO, where an underspend had occurred, it
144 The department decided that grant recipients that had a short-term contract projects up to two years and whose total project funding was 80 000 or less would receive 100 per cent of their total funding
in the initial payment and, for this reason, were excluded from this analysis. 145 In one case in the sample reviewed, there was insufficient evidence to demonstrate that the mid-year
report had been accepted by the department.
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100
was more common for the department to continue to authorise the milestone
payment, after seeking an explanation from the grant recipient and agreeing to
the action to be undertaken to remedy the budgeting issues. Environment
informed the ANAO that it had determined that there was a higher risk to the
success of the project in withholding payments, than to allow leniency in
authorising the milestone payment. However, the department also
acknowledged that in many of these instances records were lacking detail on
the decision made.
Compliance monitoring
6.56 Environment
completed a range of compliance planning activities in the
early stages of Biodiversity Fund program implementation, for example: the
preparation of a Biodiversity Fund Fraud Control Plan Fraud Control Plan that
included a detailed compliance strategy and a fraud risk assessment; and draft
guidelines for project site visits. These documents were not, however, completed
