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Conclusion
4.39 It
was originally expected that the programs would only fund projects that
would deliver a significant reduction in carbon emissions intensity. However,
more than 100 projects with low carbon emissions intensity reductions
were awarded funding of 47.6 million.
122
This situation was the result
of the high weighting adopted for the merit criterion relating to reductions
in carbon emissions intensity merit criterion one not being supported
by other aspects of the design and implementation of the assessment
process. Specifically a significant proportion of the score against this
criterion did not relate to reductions in carbon emissions intensity, but an assessment
of the grant funds per tonne of carbon abated. The inclusion of this indicator
had a significant effect in that, had the merit criterion one score solely related
to each application’s assessed performance in reducing carbon emissions
intensity:
57 successful applications may not have been awarded funding, at a
saving of 30.6 million or an average of 536 400 for each application;
and
126 unsuccessful applications may have been awarded funding at a cost
of 61.3 million or an average of 486 800 for each application.
4.40 A
more robust and transparent approach in the context of the grants administration
framework would have involved:
developing a consistent, evidence‐based approach to assessing
applications and publicising that approach in the program guidelines;
specifying
a minimum score that an application must achieve against the
first merit criterion in order to be approved for funding. This approach
guards against applications scoring very highly against less important
criteria being awarded funding notwithstanding a poor score against
the most important criterion; and
including the value for moneycost‐effectiveness of projects as a
separate merit criterion.
122 In this respect, there were 57 successful applications that had a predicted percentage reduction of less than 10 per cent and another 131 successful applications that had a predicted percentage
reduction of between 10 and 20 per cent. See paragraph 4.35
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4.41 A
further shortcoming related to the reframing of applications to improve
their assessed merit irrespective as to whether there was any change in
the underlying project proposed to be funded, in part, by the programs. Specifically,
if an application was considered to be ‘uncompetitive’, the program
management area of the department advised assessors to remove project
costs in the first instance and to then consider reducing the amount of grant
funding sought. Another approach was to change the way in which the estimated
reduction in emissions intensity was calculated so as to increase the percentage
reduction used for assessment purposes. These approaches assisted the
department to increase the amount of funding awarded under the programs,
but do not sit comfortably in the context of a program that was publicised
as awarding funding through a competitive, merits‐based process.
Recommendation No.3
4.42 In
the administration of competitive, merit‐based grants programs, ANAO
recommends that the Department of Industry design, publicise and implement
merit assessment scoring approaches that promote a clear alignment
between the published program objective, the merit criteria, the weighting
for those criteria and any scoring indicators.
Department of Industry’s response:
4.43 Agreed.
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5. Advice to the Program Delegate and Funding Decisions
This chapter outlines the advice provided to the decision maker by the department and
Innovation Australia, as well as the funding decisions that have been taken.
Introduction
5.1 The
program delegate was responsible for making all funding decisions under
the programs. Consistent with the delegate’s broader responsibilities under
the Australian Government’s financial management legislation, the delegate
also needed to satisfy the requirements of an ‘approver’ for the purposes
of the FMA Regulations.
123
In this context, ANAO examined the final merit
assessment, recommendation and decision of the 814 applications that were
considered by the delegate.
124
Innovation Australia committee assessment
5.2 In
April 2012, the program management area of the department advised
IA committee members that: The
purpose of the carbon scoring tool is to ensure that AusIndustry Customer Service
Managers take a uniform approach to scoring against this criterion. Committee
members may wish to score on some other basis. For
Merit Criterion 1, Committee Members are asked to give applicants a score out
of 70. We are assuming that your score will reflect your level of confidence in
the values for the indicators provided in the application and your consideration
of the competitiveness of the values of those indicators and their relative
importance in overall performance against this criterion.
5.3 In
September 2014, the department advised ANAO that the process for the
CTIC and CTFFIC’s consideration of applications included:
123 Up until 30 June 2014, this obligation was provided for under FMA Regulation 9. From 1 July 2014, this obligation was provided for under section 15 of the PGPA Act, which requires accountable
authorities to govern Commonwealth entities in a way that, amongst other things, promotes the proper use and management of public resources and the financial stability of the entity, and section 23 of the
PGPA Act, which provides the power for accountable authorities to enter into arrangements. 124 Of the 849 applications that were assessed against the merit criteria, 35 were not considered by the
program delegate due to the closure of the programs.
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