On Selection of Discretionary Grants

ANAO Report No.10 2014–15 Administration of the Biodiversity Fund Program 82 Minister’s obligations as approver for the grant, as required by the FMA Act. The brief was co‐signed by the First Assistant Secretary of the department’s Biodiversity Conservation Division BCD, which was to be the grant administrator, and the then Director of National Parks, the proposed grant recipient—a most unusual arrangement.

5.21 The

Minister approved the grant on 7 May 2013 and the funding agreement between the department and the then Director of National Parks was signed on 5 August 2013. Managing project risks

5.22 Notwithstanding

the potential environmental benefits of the project, there are a number of risks in relation to arrangements such as the Bush Blitz II Project, specifically where one division of the Department of the Environment Parks Australia is seeking, then managing government granted funds on behalf of the Director of National Parks under a program that is being administered by another departmental division BCD.

5.23 First,

there is a risk to the objectivity of the advice given by the department to the Minister when the recipient of the grant is part of, or closely associated with, the department. A further risk relates to a perceived or actual conflict of interest in the department’s administration of these two functions, with the potential for the risk to be realised where there was a need for compliance or remedial action to be taken by Biodiversity Fund program project staff. There is also the related issue of the funds being provided for a purpose that could be seen to be encompassed by the normal functions of the Director of National Parks, for which annual funding over 41 million in 2013–14 is provided. 118 Overall, the range of risks presented by the funding of the Bush Blitz II project warranted more careful consideration by the department. Conclusion

5.24 While

the grant guidelines for Round 1 of the Biodiversity Fund program had foreshadowed the possibility of discretionary grants where a competitive approach would not be effective or feasible in delivering the 118 Environment Protection and Biodiversity Conservation Act 1999, Section 514B. The budget for the Director of National Parks is outlined in the Department of the Environment Portfolio Budget Statements 2013–14, p. 20.