The The Program Program Design

ANAO Report No.11 2014–15 The Award of Grants under the Clean Technology Program 49 Value with public money and additionality

2.17 As

noted in ANAO’s Grants Administration Better Practice Guide, value with public money should be considered at two levels:  in the context of grant allocation, the extent to which a population of projects maximises the achievement of specified objectives within the available funding; and  in the context of selecting individual projects for funding, selected applications should be eligible, have met the selection criteria, involve reasonable cost and have a risk profile that is acceptable to the Commonwealth. 58

2.18 With

regard to the value of individual projects, there were four merit criteria for the programs, but none specifically addressed the reasonableness of project costs as shown in Table 2.1. However, the assessment of applications against merit criterion one included consideration of the grant funds per tonne of carbon abated. This indicator provided a measure of the fiscal cost of abatement 59 and was used as a basis for identifying and promoting changes to projects that the department considered were ‘unlikely to represent value for money’. 60 In June 2014, the department advised ANAO that the cost of abatement measure was ‘simply a tool that allowed us to compare and consistently score total carbon savings over the life of the project’. Despite this advice:  the department’s customer guidelines released in August 2013 near the time of program closure stated that ‘total carbon savings in the context of value for money grant dollars for each tonne of carbon abated’ was a factor considered in the assessment of merit criterion one; and  both IA committee chairs advised ANAO that value for money was considered during committee deliberations.

2.19 Value

with public money is also promoted by considering the extent to which the funding being sought by an applicant will result in an outcome that 58 ANAO Grants Administration Better Practice Guide, op. cit., p. vi. 59 The fiscal cost of abatement is a measure of the abatement leverage achieved by a dollar of government resources. It is based on the budget impact of the policy per tonne of carbon abated and does not take into account the costs and savings incurred by households, businesses, non- government organisations and other levels of governments. 60 Reframing of projects is discussed in paragraphs 3.10 to 3.34. ANAO Report No.11 2014–15 The Award of Grants under the Clean Technology Program