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Funding decisions
5.18 The
program guidelines stated that the program delegate was responsible
for taking decisions on whether to approve funding for each grant application
made under the programs subject to:
accepting that the application was eligible;
referring
the application to IA for merit assessment;
receiving an IA funding recommendation
136
; and
confirming
that funding was available.
5.19 Following
receipt of a recommendation, the program delegate took decisions
on applications until the programs were closed by the Government in
October 2013. To assist the approver, the procedures manual for the programs
allocated responsibility to officers in the department’s committee secretariat
and program management areas to prepare decision sheets ‘based on
the IA recommendations and the availability of funds’. These sheets were then
provided to the delegate for review and, if satisfied, approval for the commitment
of program funds was given.
5.20 The
delegate accepted all of the funding recommendations made by the IA
committees.
137
As a result, the recommendations made by the IA
committees formed the basis for the approver’s reasonable inquiries that each
grant proposal recommended was a proper use of resources. The two key
factors referred to in the program delegate’s decision as forming the basis for
reasonable inquiries were that the:
merit
assessment process had been conducted in accordance with the agreed
framework; and
the applicant was competitive against the relevant merit criteria
established for the program.
136 Applications for grants of 10 million or more, that had been merit assessed by IA and recommended for funding, were also required to be referred to the Cabinet of the Australian Government for
consideration prior to final approval by the program delegate. 137 In July 2014, the approver advised the ANAO that, when making funding decisions, she took into
consideration: the recommendations made by IA and, where relevant, the Cabinet of the Australian Government that is for grants of 10 million or more on the merits of each application; the program
budget; and that FMA Regulation 10 approval was in place.
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119
5.21 However, these statements were not supported by the IA committee assessment
process. In particular, the IA committee assessments did not result in an
agreed score against each of the merit criteria, as discussed in paragraphs 5.6
to 5.8. Further, as was noted in paragraph 5.14, the recommendations provided
to the delegate by IA committees did not document:
the process that was used in forming recommendations;
expected
project outcomes
138
; or
a
clear statement that the recommendation was based on an original or reframed
application.
Feedback to unsuccessful applicants
5.22 The provision of feedback to applicants has been emphasised by the Joint
Committee of Public Accounts and Audit as an important element of
grant administration practice.
139
In the context of an open, non‐competitive program,
the provision of specific feedback was critical in assisting applicants to
apply for future grants, under the programs, where applicants choose to submit
a revised application.
5.23 The most common reason recorded for not recommending an application
was that the IA committees considered that the applicant had not demonstrated
that the total carbon savings over the life of the project, and in some
cases the reduction in carbon emissions intensity, would be commensurate
with the level of investment. Specifically, of the 211
applications that were not recommended by the IA committees, this reason was
the only reason cited for an application not being successful in 146 cases 69
per cent of unsuccessful applications and a contributing reason for another 53
cases 25 per cent of unsuccessful applications. The department advised ANAO
that ʹcommensurate with investmentʹ reflects the IA committeeʹs views
138 As was noted in paragraph 2.74, the department has advised that it recorded the agreed details’ of projects in a spreadsheet during meetings and that this was provided to the delegate when
considering whether applications should be funded. ANAO noted, however, that minutes supporting delegate decisions make no reference to the spreadsheet or project outcomes. In this respect,
ANAO identified that the agreed carbon emissions intensity levels recorded in the department’s spreadsheet did not align with those in funding agreements in 106 instances. The total value of these
grants was 83 795 542.
139 Joint Committee of Public Accounts and Audit, Report 423: Review of Auditor-General’s Reports Numbers 39 2009–10 to 15 2010–11, Canberra, 4 July 2011, p. viii.
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