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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.
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subsequently a series of project reports to the department for review and
acceptance. Environment has used these plans and reports to: establish project
outputs and reporting requirements; monitor the progress of project activities;
identify and resolve delivery issues; and as the basis for making grant
payments. The ANAO reviewed the department’s administrative
arrangements for managing funding agreements, and its management of
project planning, reporting requirements, and milestone payments as set out in
the funding agreements.
Administrative arrangements
6.27 Environment
has allocated the management of all funding agreements to
grant management teams within the Biodiversity Conservation Division BCD.
129
Each individual grant manager is assigned a number of Biodiversity Fund
program and other program grants to administer.
130
Such an approach has
the advantage of allowing grant managers to build their knowledge of projects
and recipients over time, which helps to facilitate appropriate oversight
and compliance monitoring. It also provides grant recipients with a common
point of contact to approach regarding project challenges or issues. In general,
