In The Establishment and Management of Funding Agreements

‐ ‐ ANAO Report No.10 2014–15 Administration of the Biodiversity Fund Program 91 Variations to funding agreements

6.22 The

funding agreement provided for any variations to be made in writing, and to be signed by each party. The agreement also provided for the project plan and budget to be varied, and a provision for grant recipients to make small reallocations of their funding between items as set out in the project budget, without the consent of Environment. 128

6.23 Environment

established a template Deed of Variation and some procedural guidance for its staff when considering, agreeing to and executing funding agreement variations. A number of grant recipients, particularly those funded under Round 1, sought variations to their funding agreements to help manage a range of issues, including the changed funding profile and the condensed delivery period. Ultimately, the decision to recommend a variation was at the discretion of the relevant grant manager. In the interests of equity for grant recipients, there was scope for Environment to have established common criteria, against which variations related to re‐profiling of Round 1 project budgets would be considered.

6.24 In

practice, amendments to project plans andor budgets have been primarily used to reflect project changes. The ANAO’s sample review identified that amendments to project plans and budgets often occurred as a result of the mid‐year or annual report review process, where the department andor the recipient identified that the project was not proceeding as originally planned. For example, seeding could not be carried out at the originally planned time due to adverse weather conditions, and needed to be rescheduled to the following season.

6.25 Overall,

amending the project plans andor budgets to account for changes to projects that do not fundamentally alter the scope of the project andor its deliverables or the overall funding level is an effective approach to reduce the administrative burden for both the grant recipient and the department rather than the formal funding agreement variation process. Management of funding agreements 6.26 A key feature of each Biodiversity Fund program funding agreement is the requirement for recipients to submit a detailed project plan and 128 Funding recipients could re-allocate funds from one expenditure item under their project budget to another, up to a maximum of 10 per cent or 50 000 of that year’s budget.