As Access to Funding

 ANAO Report No.11 2014–15 The Award of Grants under the Clean Technology Program 81

3.22 For

the applications that were reframed, the departmental assessment report included:  variations to project scope, such as removing elements of a project that were considered to be ineligible expenditure or not considered to provide ‘value for money’ in terms of carbon abatement, as discussed in paragraph 3.16;  alternative scores calculated using various interpretations of the evidence provided in support of carbon savings, such as a reduction in the expected production levels; and  a revised grant amount. Amending the cost of carbon abated

3.23 Consistent

with the department’s advice that its culture is to ‘assist businesses to access our programs where possible’, the department worked with the applicant to reframe the scope of projects that were ‘unlikely to be supported’ in their original form. 96 This approach blurred the line between departmental officials assessing applications for the purpose of informing committee recommendations and officials acting as advocates for projects. 97

3.24 One

of the ways in which the prospect of obtaining funding for an application was improved was by reducing the fiscal cost of abatement, which was referred to, in the assessment of applications, as grant funds per tonne of carbon abated. However, the decision to reframe an application was subjective as the scoring framework did not contain a benchmark or upper limit on grant funds per tonne of carbon abated. In August 2012 six months into the programs, the department advised its assessors that: With input from the committee we are starting to gather a pool of knowledge about how this criterion is being addressed by applicants. The current data would suggest that an estimated per tonne calculation that exceeds 80 is unlikely to represent value for money as savings of this magnitude are not commensurate with the level of investment. 96 Reframing was also evident in decisions made by IA committees to remove components of projects considered to be uncompetitive. 97 In this regard, the AusIndustry Customer Service Charter at the time of program launch noted that AusIndustry would provide customers ‘with guidance to enable them to submit a competitive application or to receive their full entitlement’, but that AusIndustry could not ‘help a customer write their application, though we can suggest what aspects of an application might be improved’ or ‘act as an advocate or referee for a project to a committee or third party’. ANAO Report No.11 2014–15 The Award of Grants under the Clean Technology Program 82

3.25 In

the August 2012 guidance, departmental assessors were also advised to consider how the ‘competitiveness’ of the proposal could be improved through the removal of project costs from the application, with acceptance by the applicant, as follows: Where the figure is in this order, [Customer Service Managers] CSMs should critically review the project budget to see if the applicant has included costs that are not linked directly to generating carbon or energy emissions savings. The applicant should be advised to remove these costs and submit a revised budget, otherwise the application is unlikely to be competitive. It is important that the assessment includes your analysis of the various components of the application and the interactions the CSM has had with the applicant in these circumstances. Following discussion, if the estimated per tonne calculation still exceeds 80 and the applicant wishes to proceed, the CSM should give careful consideration as to whether the application should be recommended for support. The assessment will need to document the rationale behind the decision.

3.26 Further

guidance was issued to assessors in December 2012 noting that for ‘uncompetitive applications’ departmental assessors should:  remove activities that do not directly contribute to energy and carbon savings or do not represent value for money;  if still uncompetitive, look to see how far it is away from similar projects approved; and  include in the assessment that the company would be prepared to accept a reduced grant amount.

3.27 Eligible

activities could be an essential component of the project, but separable in circumstances where grant funds per tonne of carbon abated was considered, by the department, to be uncompetitive. This approach was reflected in guidance to assessors in March 2013, which noted: Applicants can improve the competitiveness of their project by removing any eligible activities that do not directly contribute to significant carbon savings. For example site preparation activities which are for the dominant purpose of supporting implementation of the emissions reduction measure can be eligible activities. However, such activities do not directly contribute to carbon and energy savings.