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6.20 In
its covering email to successful grant recipients, which included the funding
agreement as an attachment, Environment advised of the changes in the
project budget profiles, and more generally, recommended that recipients should
consider seeking legal advice before signing the funding agreement.
125
Nonetheless, stakeholders providing feedback to the ANAO, and the ANAO’s
file review of 64 Round 1 funded projects, indicated that the change in the
funding profile was problematic for many but not all
126
grant recipients. For example,
respondents to the ANAO’s survey of grant recipients stated: The
uneven distribution of funds across the years, particularly the excessive amounts
in year three made it difficult to resource the program from an organisation
perspective as very large in‐kind support was required for these years
to supplement the dedicated officer delivering the program.
The split of funding over the 2‐3 year period made it difficult to fund some of
our larger projects early, and give them enough time to occur. Over 60 per cent
of our funding was provided in the last two payments, which made delivery a
challenge given climatic conditions for planting.
6.21 While
funding recipients have a responsibility to carefully consider the terms
and conditions proposed within funding agreements, there was scope for
Environment to have provided clearer guidance to Round 1 applicants about
the funding period and proposed budget of funding agreements. For example,
the grant guidelines and associated documents could have more clearly
indicated that 2011–12 was to be ‘year one’ of the project, to allow applicants
to plan their projects accordingly. Similarly, the guidelines and application
form could have outlined matters for applicants to consider when developing
their proposed project budget such as the overall program funding
and the department’s preference for budget profiles that broadly matched
the program’s funding.
127
125 As previously noted, recipients had only been given 10 days to sign and return the funding agreement. 126 One survey respondent reported that the funding profile changes had not had any significant impact,
another reported that they had negotiated a variation to their funding profile, and a third respondent reported that the change had allowed them more planning time, which ultimately benefited the
project’s delivery. 127 The guidelines for subsequent rounds provided greater clarity in relation to the potential for the
department to refine the scope andor the funding profile for projects.
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Variations to funding agreements
6.22 The
funding agreement provided for any variations to be made in writing,
and to be signed by each party. The agreement also provided for the project
plan and budget to be varied, and a provision for grant recipients to make
small reallocations of their funding between items as set out in the project
budget, without the consent of Environment.
128
6.23 Environment
established a template Deed of Variation and some procedural
guidance for its staff when considering, agreeing to and executing funding
agreement variations. A number of grant recipients, particularly those funded
under Round 1, sought variations to their funding agreements to help manage
a range of issues, including the changed funding profile and the condensed
delivery period. Ultimately, the decision to recommend a variation was
at the discretion of the relevant grant manager. In the interests of equity for
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