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indicators under the assessment of merit criterion one, the assessment of the
primary merit criterion was inconsistent with the policy proposal for the
programs. Specifically, the policy proposal identified that the programs were
designed to deliver ‘transitional, targeted assistance for manufacturing
companies’ that ‘will assist in achieving the objective of the carbon price by
helping these businesses to reduce their energy consumption in the short‐term
while remaining competitive in Australia’. The combination of the indicator
scores resulted in a score which reflected a mixture of short‐ and long‐term
benefits.
4.18 However,
as discussed in paragraph 4.5, indicator two was replaced, in assessing
applications against merit criterion one, by grant funds per tonne of carbon
abated, which is a relative cost‐effectiveness measure. In other grant programs
audited by ANAO where the cost per unit is an important consideration
in the award of funding, agencies have included a separate value for
moneycost effectiveness merit criterion.
114
This approach provides greater clarity
to applicants as to how the merit of their application will be assessed, and
promotes a clear line of sight between the program objective and the key policy
criterion or criteria.
4.19 The
department used the cost‐effectiveness indicator to assess applications
against merit criterion one from the start of the programs, but did not
communicate this to applicants until the fifth version of the customer guidelines
December 2012. In this version of the customer guidelines, rather than
identifying the cost‐effectiveness indicator as the second indicator used in the
assessment of applications, the department identified this indicator as a factor
that was taken into account. In June 2014, the department advised ANAO
that: We
took the view early in the program not to reference dollars per tonne in the customer
documentation as we felt that this might drive applicants to artificially
adjust their projects to achieve a “competitive” dollar per tonne figure.
We were also cautious about managing customer messaging around what
a competitive figure looked like. This is because there could be significant
variation depending on the nature of the emissions reduction measure.
However, due to customer feedback on this issue we included a clear
114 See for example ANAO Audit Report No. 25 2013–14, Management of the Building Better Regional Cities Program, and ANAO Audit Report No. 17 2012–13, Design and Implementation of the Energy
Efficiency Information Grants Program.
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reference to dollars per tonne in the customer guide published on
12 December 2012 and merit criteria fact sheet published on 16 October 2012.
4.20 In
light of the approach taken to assess applications using different activity
boundaries as discussed in paragraph 4.10 IA placed more emphasis on
grant funds per tonne of carbon abated when assessing applications against merit
criterion one. In this context, the decision not to publish the second indicator
used in assessing applications at the start of the programs reduced the
transparency of the assessment process, particularly for those applicants who
submitted an application prior to December 2012.
Implementation of the scoring methodology for merit criterion one
4.21 The
department implemented the scoring methodology for merit criterion
one using two rating scales. These rating scales, and the assessment procedures
used by the department, evolved over the life of the programs. In this
context, ANAO examined the implementation of the scoring methodology in
respect to the two indicators used in assessing applications against this criterion,
including the rating scales and the relative weightings that resulted from
changes made to those rating scales during the life of the programs.
Predicted reduction in carbon emissions intensity
4.22 A
maximum of 42 points was available for the predicted percentage reduction
in carbon emissions intensity and, as shown in Table 4.2, there were two
versions of the rating scale that the department applied to allocate a score for
this indicator. The rating scale most frequently used by departmental assessors
was the scale that was applied from June 2012 to July 2013. This scale was
used to score over 80 per cent of applications.
