“Potential applicants and other stakeholders reasonably expect that program funding decisions will be made in a manner and on a basis consistent with the published program guidelines,” it said.
“Our work suggests that where this has not always been the case,there have been issues with the design of and adherence with the published grant opportunity guidelines.”
Loading
The auditor-general also said the committee should look at ways to make grants comply with the government’s own regulations,noting issues with money going to low-value projects or decision-makers failing to keep proper records.
“The low use of open and competitive grant selection processes compared with other less competitive mechanisms is both inconsistent with the principle of ‘achieving value with relevant money’ and at odds with the Australian government’s preferred approach,” it said.
“Transparency and accountability over funding decisions not being achieved due to shortcomings in the advice provided to decision-makers,poor record-keeping and inconsistent approaches to reporting[instances of recommendations being overturned] to the finance minister.”
In a separate submission,constitutional law expert Anne Twomey said the committee needed to consider recommending possible penalties for public servants and MPs for “serious breaches” of mandatory grant rules or breaching legal obligations around the provision of grants.
Loading
Twomey said there remained significant legal doubt over the way grants are approved at the federal level,noting the High Court had consistently held that spending on grants must be supported by legislation. In many cases,individual programs were not backed by law.
“The consequence is that much of the expenditure under grants schemes is unlawful or at least of doubtful legal validity. This needs to stop,” she wrote.
“Governments should not be unlawfully spending public money. The principle of the rule of law means that the law,including the Constitution,binds the government in relation to the expenditure of money.”
Twomey said cabinet confidentiality was being misused to avoid proper scrutiny of decisions while ministers were using wide discretions to approve grants that eroded the role of published merit-based assessment processes.
Cut through the noise of federal politics with news,views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weeklyInside Politics newsletter here.