‘Unsuitable’ projects approved for community safety grants after ministerial visits, auditor general says

The Coalition used its $187m safer communities grants program to fund at least 10 projects that had been deemed "unsuitable" by the department after the project applicants were visited in person by Peter Dutton's assistant minister, Jason Wood.

An auditor general's report into the program released on Monday also revealed that decisions to award grants against the recommendations of the department had been influenced by the lobbying of MPs and senators. It raised concerns about applicants having direct access to decision-makers.

The audit, which found the program favoured Coalition-held seats in the lead-up to the last election, is critical of how grants were awarded with more than half delivered without a "clear basis for the decision".

Over five rounds of the program - which fell under the responsibility of Dutton as then home affairs minister - 225 applications were awarded funding worth $47.9m against the recommendations of the department.

Of these, 23 projects worth a combined $7m were "assessed as either ineligible or unsuitable".

According to the audit, nine "unsuitable" applications were approved for a combined $3m of grant funding in round four of the program, which was opened just before the 2019 election, with five of these decisions being "informed by a visit by the minister during the assessment process".

"However, the records did not explain how the information obtained during the visit had impacted upon how well each application was considered to have performed against the published merit criteria," the audit stated.

The ministerial visits by Wood, the assistant home affairs minister, happened after applications for the round had already closed ahead of the 2019 election.

Another five of these "unsuitable" projects were awarded funding after representations were made from MPs and senators, despite the records not explaining "how the representation had impacted upon how well each application was considered to have performed against the published merit criteria".

All of the projects funded after Wood's visits were assessed as unsuitable against the published merit criteria, scoring between 33 and 53 out of 100, and "each failing the published threshold of scoring at least 50 per cent against one or more of the individual criteria".

In another round, seven projects were successful on the basis of a ministerial visit, with five previously assessed as "unsuitable" and another deemed ineligible.

The unsuitable ranking meant that the merit scores received by the projects "were not high enough for it to either be recommended for funding or included on the list of candidates for the reserve list".

One of those projects was approved on the basis of both a ministerial visit and a letter from the local MP in support of it.

Commenting on the manner in which grants were awarded, the audit highlights the "importance of transparent and equitable access to grant funding opportunities".

It compares the process used in the program to the problem that would arise if tenderers were able to "engage directly with the decision-maker" for government procurement.

"Applicants for grant funding invest time, effort, and resources in preparing and submitting their applications," the audit states.

"The CGRGs (Commonwealth Grants Rules and Guidelines) do not specifically address the transparency and equity issues that arise when applicants seek to engage with decision-makers prior to decisions being taken on which candidates will receive grant funding.

"As the risks that arise in these circumstances are similar to those that would arise in a procurement if some tenderers were able to engage directly with the decision-maker, there would be benefits in the CGRGs explicitly addressing whether applicants should be able to interact with decision-makers prior to grant funding decisions being taken.

"And if so, how risks to the principles of equity, transparency and probity are to be managed."

The projects funded on the back of ministerial visits by Wood were in addition to two projects awarded grants by Dutton during the Braddon byelection in 2016, which were announced prior to an application being made and against the recommendations of the department.

The audit raises concern about the impact of ministerial visits on the decision-making process, saying that how they influenced grant decisions was not made clear.

"The records of decisions did not set out how information collected during ministerial visits to certain applicants and representations from parliamentarians was being relied upon to inform an assessment against the grant opportunity guidelines."

The auditor general points to the obligations under the Public Governance, Performance and Accountability Act regarding the approval of expenditure by ministers, saying that they are required to "undertake reasonable inquiries to satisfy themselves that the proposed expenditure would be an efficient, effective, economical and ethical use of public resources".

Ministers are required "to record the terms of the approval" under the act, and are also obliged under the commonwealth grants rules to "record in writing the basis for the approval relative to the grant opportunity guidelines and the key principle of achieving value with relevant money".

In parliament on Tuesday, Labor asked the now home affairs minister, Karen Andrews, to explain why the Holland Park Mosque, which had applied for a grant "after being subject to a number of Islamophobic attacks" had missed out on funding.

The mosque was vandalised with swastikas and references to the Christchurch shooter as a "saint".

In response, Andrews said that the government "had always acted in the best interests of our communities" but acknowledged there had been some ministerial "intervention".

"There were a range of programs that were assessed by the department and, yes, there was some intervention from ministers responsible to support key programs in a number of seats.

"So those opposite can get all precious and work themselves up about how grant funding was in fact allocated, but there were instances where ministers did take specific responsibility to make sure that programs could be supported in various communities."

Wood was contacted for comment.