The A Establishment and Management of Funding Agreements

ANAO Report No.10 2014–15 Administration of the Biodiversity Fund Program 100 was more common for the department to continue to authorise the milestone payment, after seeking an explanation from the grant recipient and agreeing to the action to be undertaken to remedy the budgeting issues. Environment informed the ANAO that it had determined that there was a higher risk to the success of the project in withholding payments, than to allow leniency in authorising the milestone payment. However, the department also acknowledged that in many of these instances records were lacking detail on the decision made. Compliance monitoring

6.56 Environment

completed a range of compliance planning activities in the early stages of Biodiversity Fund program implementation, for example: the preparation of a Biodiversity Fund Fraud Control Plan Fraud Control Plan that included a detailed compliance strategy and a fraud risk assessment; and draft guidelines for project site visits. These documents were not, however, completed until August 2012, which was after execution of the funding agreements for the 313 Round 1 approved projects MayJune 2012. The earlier finalisation of planned compliance activities would have better positioned Environment to communicate compliance requirements to grant recipients, for example in the grant guidelines and template funding agreements.

6.57 In

addition to compliance planning, the department developed a draft ‘visit priority calculator’ that enabled case managers to enter project attributes such as the type of organisation, amount of funding, previous history of managing projects, and concerns raised by the grant manager or external complaints. The calculator provided a risk rating for each project to help determine those projects that should be prioritised for site visits. There was, however, no evidence to indicate that the department had systematically used the calculator to risk rate projects andor recipients to inform a program of site visits or other compliance activities. Implementing compliance monitoring arrangements

6.58 As

previously discussed, Environment uses grant recipients’ reports as a key tool to monitor compliance with obligations under the funding agreements. In general, grant monitoring arrangements that are based on self ‐reporting of compliance provide limited assurance for the funding agency. However, the following additional requirements have helped to provide further assurance on the delivery of Biodiversity Fund program projects: