Difficult to see sports grants as transparent or accountable: Audit Office

Senator Bridget McKenzie had "final approval" over the grants. Picture: Sitthixay Ditthavong
Senator Bridget McKenzie had "final approval" over the grants. Picture: Sitthixay Ditthavong

The Audit Office has stepped up its criticism of the Coalition's sports grants program, saying it was difficult to see how the program could be described as transparent or accountable.

Audit executive Brian Boyd said there were "a number of unusual" aspects to the grants, including the parallel process in Senator McKenzie's office, which had made funding decisions before Sport Australia had even finished the ranking process.

It was not clear how her office made decisions, with no clear connection to the funding criteria, and the decisions "self-evidently" not based on Sport Australia's assessments. The only representations made to the minister had been from Coalition parliamentarians and candidates, but even then it wasn't clear how those representations had been assessed.

The inconsistencies and contradictions had been very difficult to unpack, Mr Boyd said, referring to one top-ranked project that had been on early lists for approval but had been dropped without explanation about December 7. When interviewed, Senator McKenzie's staff had recalled the project but could not explain why it had been dropped.

"Ordinarily you'd expect that a project that scored 98 out of 100, unless the assessment is fundamentally flawed, is a pretty good candidate to receive funding," Mr Boyd said.

"It's very difficult to see in those circumstances how you can say it's been accountable and transparent. When you've got unpublished criteria being applied with no records of how they were applied."

Auditor-general Grant Hehir. Picture: Dion Georgopoulos

Auditor-general Grant Hehir. Picture: Dion Georgopoulos

The Audit Office also questioned the last-minute changes to the final funding round, which were made on April 11 in the hours before and after the government went into caretaker mode, with a back and forth between the officers of Senator McKenzie and Mr Morrison over the final list.

Senator McKenzie has recently revealed she was unaware of the April 11 changes, thinking the brief she had signed on April 4 was the final one.

Mr Boyd said it was a "challenge" to understand how projects could have been added once a brief was signed and how they could be funded without ministerial approval if Senator McKenzie had not been involved.

Auditor-general Grant Hehir said officers implementing ministerial decisions should be clear the decision had actually come from the minister.

Ordinarily you'd expect that a project that scored 98 out of 100, unless the assessment is fundamentally flawed, is a pretty good candidate to receive funding.

Audit executive Brian Boyd

"Relying on an email from an adviser doesn't necessarily give you assurance that the decision was taken by the relevant decision maker," he said.

"The point is that only the decision maker should make the decision."

The audit officials told Friday's inquiry they still hadn't seen any legal basis for Senator McKenzie to have made grants decisions, given Sport Australia was a standalone entity, deliberately at arm's length from government.

Senator McKenzie has said she was the decision-maker in the $100 million program that gave grants to 680 sports groups, a claim repeated by Mr Morrison.

Sport Australia described Senator McKenzie as "the final approver" at Friday's hearing, saying Sport Australia had executed her decisions, signing grant agreements with sports groups.

Luke McCann, from Sport Australia, said he wasn't a lawyer but, "our advice is that we are entitled to allow the minister to be involved in the administration of grants".

"But are you the decision-maker?" Labor MP Julian Hill persisted.

Mr McCann answered: "As part of the operation of our Act, we've agreed to have the minister as part of the approval process. We retain the power ... to enact those agreements and actually fund those organisations."

Mr Hill asked him: "At what point does it just make a mockery of the act and your role? What's the point in being a corporate commonwealth entity and having this responsibility if you just sit there waiting as a rubber stamp waiting for the minister to tell you what to do?"

Mr Boyd said Senator McKenzie was clear in her own mind that she was the decision-maker, telling Sport Australia which grants to approve.

"We had this discussion with Sport Australia in the course of the audit when they postulated that maybe they were in the decision-making role because they signed the funding agreements.

"The question we posed was if the minister's decisions ... were only an input, were only advice, why is it that without fail the only grant agreements that proceeded were the applications approved by the minister?" he said.

"That's particularly significant for us when you look at instances where Sport Australia was saying the applications are late so we shouldn't accept them, these have scored too low ...

"The question we had for Sport Australia at the time and I would still have for Sport Australia is why did you enter into grant agreements for applications that you assessed as having very little merit under the published program guidelines if you were actually making those decisions?"

He pointed to one grant that had been successful despite Sport Australia scoring it just 38 out of 100.

READ MORE:

Mr Hehir said if Senator McKenzie was the decision-maker, there must be some legal authority for her to make decisions. He had seen none and could find no underlying rationale.

If Sport Australia was the decision-maker "we would have seen evidence of the Sport Australia board making their decisions", he said, but there was none.

"If what Sport Australia is saying is the minister wasn't the decision maker but Sport Australia was, then that opens up another series of questions about the appropriateness of the processes they undertook," he said.

Mr McCann said Sport Australia had liaised with Senator McKenzie's office about projects, and "provided recommendations that we understood the minister was supportive of", a process Labor's Mr Hill said was "pathetic".

Acting chief executive of the Sports Commission, Rob Dalton, told Mr Hill all of the applications were eligible and all were excellent. The commission's ranking were only "part of the process" with other factors also taken into account, he said.

The Sport Australia officials said they had not been included in the 136 emails between the offices of Senator McKenzie and Mr Morrison over grants, a series of emails Mr Hill described as a "secret ecosystem hidden from view".

He asked the agency to provide all communications on the grants, including text messages and messages or communications on other platforms such as Whatsapp and encrypted systems, and to direct staff not to delete any.

The agency agreed.

This story Difficult to see sports grants as transparent or accountable: Audit Office first appeared on The Canberra Times.

Comments