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desired outcomes of the program, the guidelines for the remaining rounds did
not outline this funding option. In the interests of transparency and equity,
there would have been merit in the department including a reference to the
possibility of discretionary grants in all round guidelines and the basis on
which these grants would be considered and approved.
5.25 All
four of the discretionary grants awarded under the Biodiversity Fund
program were appropriately approved for funding by the Minister and had
funding agreements in place. However, the grant for the Tasmanian Forest Landscape
Restoration Project was awarded at a time when a competitive funding
round—that was seeking applications for projects in support of the implementation
of the Tasmanian Forests Agreement—was open. The issues raised
by stakeholders with the ANAO in relation to the transparency and equity
of this matter illustrate the need for careful management of discretionary
granting processes, particularly in those circumstances where funding
is sought for projects that are similar in nature to those where funding is
also available through a competitive process.
5.26 In
the case of the discretionary grant for the Bush Blitz II project, Environment
is both provider of the funding and the day‐to‐day project manager.
The involvement of the proposed grant recipient in the advice to the Minister
recommending funding of the project was unusual and presents a number
of risks for Environment, particularly in relation to actual or perceived conflicts
of interest, which could have been better managed. ‐
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6. Establishment and Management of Funding Agreements
This chapter examines Environment’s development and ongoing management of
Biodiversity Fund program funding agreements.
Introduction
6.1 Funding
agreements or grant agreements are used to formalise the provision
of funding to a grant recipient. The agreements specify the terms and conditions
of the grant, including the expected deliverables from the grant recipient.
A well drafted and carefully considered funding agreement, tailored to
the specific granting activities, contributes to the achievement of the objectives of
the program.
6.2 The
ANAO examined Environment’s processes for the development and execution
of funding agreements, and management of funded projects including reporting
requirements, milestone payments, agreement variations and compliance
activities.
Developing and executing funding agreements
6.3 In
total, 334 projects were funded under the Biodiversity Fund program’s competitive
funding rounds—313 through Round 1, 18 through Round 2, and three
through the Northern Australia Targeted Investment NATI round.
119
The ANAO
reviewed Environment’s approach to developing and executing these funding
agreements, including the use of template agreements, negotiating and executing
the agreements, issues raised by stakeholders regarding the timing and budget
profiles in Round 1 agreements, and variations to funding agreements.
Funding agreement templates
6.4 For
Round 1 approved projects, Environment developed a short form and long
form funding agreement template. The short form funding agreement was for
projects with a value of up to 80 000 and where the term of the agreement
119 While five projects were approved for funding in the Investing in Tasmania’s Native Forests round, ultimately none proceeded due to the 2013 Federal Election and a subsequent decision by the
incoming Government not to proceed with the funding for projects without a funding agreement in place at the time. This is discussed further in this chapter from paragraphs 6.9 to 6.10.
